New Collaborative Approaches to IP Protection

EXECUTIVE SUMMARY

MAIN ARGUMENT

The loss of trade secrets is an especially challenging issue for multinational corporations. Corporations that suffer the theft of trade secrets in foreign markets often have few incentives to pursue legal remedies or might have low expectations that their issues will be redressed. Ultimately, they may simply “eat the losses” from IP theft in ways that neither satisfy company goals nor hold IP thieves accountable. To be sure, corporations could do much more to prepare for challenging new environments and defend against trade-secret theft. Additionally, international trade organizations and agreements also serve useful roles in establishing structures and principles by which countries can establish regimes for protecting intellectual property. But these regimes can be ineffective against persistent entities intent on continuing to steal intellectual property, in particular trade secrets. Thus, changing the behavior of bad actors becomes a paramount consideration, one that requires alternative approaches to the problem of IP theft. Viewing the challenge as a collective-action problem faced by multinational corporations and national governments presents new possibilities to address the issue. Considered in this way, the principal challenge is how to develop a model for the meaningful sharing of information between corporations and governments in a multilateral setting.

POLICY IMPLICATIONS

• Corporations and governments need more tools to deter the theft of intellectual property, especially trade secrets.
• A mechanism that provides for information sharing between governments and the private sector on a multilateral basis would complement existing multilateral agreements.
• The Wassenaar Arrangement provides one such model. This model emphasizes standards-based development of a list of bad actors, transparency of operations, voluntary participation, national compliance and enforcement, and threat-focused information sharing.