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Professor's Book Explores Industrial Espionage in the New World


Professor’s Book Explores
Industrial Espionage in the New World

While reading through memos of the country’s founding fathers for a book on Thomas Jefferson more than a decade ago, Fordham history professor Doron Ben-Atar, Ph.D., was surprised to find correspondence about industrial espionage. More surprising was that these memos were not about how to prevent industrial theft, but about how to accomplish it.

With a book deadline looming, Ben-Atar couldn’t afford to dig deeper into the intriguing memos at the time, but the discovery stayed with him, and years later he researched the topic more thoroughly. The result is the book Trade Secrets: Intellectual Piracy and the Origins of American Industrial Power, to be released in April by Yale University Press.

The book couldn’t be more timely, with the United States government and corporations desperately seeking ways to protect intellectual property—namely from China, an economic powerhouse that is growing at a ferocious rate. What elected officials and CEOs fear is that if China can acquire U.S. intellectual secrets, it will morph from a low-cost manufacturer into a hub of innovation with the potential to rival the United States.

“The irony,” said Ben-Atar, “is that the United States was built on stolen trade secrets. Alexander Hamilton issued a report suggesting that the United States engage in large-scale piracy,” he said of Hamilton’s “Report on Manufactures.”

The document proposed an orchestrated program to pirate the industrial secrets of other countries, according to Ben-Atar. Per Hamilton’s directive, an economic enterprise was created to attract skilled European workers by offering them land and to appropriate machines and technologies from overseas that were not yet available stateside. Hamilton’s assistant treasury secretary, Tench Coxe, was actually sending industrial spies to Europe.

“Almost every branch of American industry was built on imported skill,” said Ben-Atar.

The practice was illegal, but Hamilton, and other public officials including George Washington, deemed the rapid industrialization of the United States too important—which is often the rationale of China and other countries accused of piracy today. To be competitive in a global society, some countries see appropriation of existing technologies as the only way to keep pace.

On the surface, the motivation for industrial theft may seem purely financial, an effort to lift a country’s economic standing and influence through illegal means, but there are also moral issues that too often get overlooked in the zeal to protect trade secrets.

For instance, should intellectual property protections prevent the distribution of life-saving pharmaceutical drugs in countries where patients can’t possibly afford U.S. prices? In one recent case, Bristol-Myers Squibb stopped enforcing its patent on the AIDS drug Zerit, allowing greater access to the drug for patients in Africa. The bottom line, according to Ben-Atar, is that these moral dilemmas must be considered when debating the merits of intellectual property protections.

Ultimately, devoting money to patent and copyright protection is a waste of time, said Ben-Atar. Industrial theft has been happening for centuries and it will continue. The reality, he said, is that a country’s most valuable intellectual asset is not “yesterday’s invention, but tomorrow’s innovation.” In other words, what’s already been invented is fair game, and may well have been poached already. Energy and money would be better spent, according to Ben-Atar, nurturing an open, entrepreneurial society that encourages experimentation, so that Americans can come up with the ideas and inventions that will be worth stealing in the future.

— Suzanne Stevens

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