Industrial espionage is also known as economic espionage and is a serious offense that can lead to severe punishments along with huge sums of fines. Despite the proposed punishments, it is quite common and can enable a competitor to deal massive damage to a company in the commercial market. We have put together a list of five famous industrial espionage that took place in recent times.
1. Gillette – 1997
Back in 1997, a man from Washington, Iowa was incriminated for the charge of wire fraud and theft of trade secrets from Gillette. Steven L. Davis, who was forty-seven years old at that time, stole information about a new shaving system that was developed by the company. Steven was a previous employee of Wright Industries Inc. that had been brought onboard by Gillette to assist in designing the fabricator equipment for the new shaving system.
As per fas.org, ‘In February and March 1997, according to the indictment, DAVIS made disclosures of technical drawings to Gillette’s competitors in the razor market, Warner-Lambert Co., Bic, and American Safety Razor Co. These disclosures were made by fax and by electronic mail. The indictment also charges DAVIS with wire fraud.’ Davis faced a total of 15 years in jail and hundreds of thousands of dollars in fines after pleading guilty.
2. Kodak – ’90s
During the 1990s, Kodak also became the victim of industrial espionage. A former employee of the Eastman Kodak Company was charged with industrial espionage. The employee pleaded guilty to all charges. The employee was Harold Worden, who was fifty-six years of age at that time and stole Kodak property that was worth millions of dollars. He had been an employee for more than 30 years but didn’t return the confidential documentation when he finally left the company in 1992. He faced fifteen months in jail and fines of more than $50,000 after his conviction in 1997.
3. Avery Dennison – Late 1990s
From 1989 to 1997, a Taiwanese businessman by the name of Ten Hong Lee also known as Victor Lee and his company Four Pillars were involved in defrauding and stealing trade secrets from Avery Dennison that was based in Ohio. Avery Dennison was one of the biggest manufacturers of adhesive products in the country.
As per fas.org, ‘Since July of 1989, the defendants have obtained, among things, proprietary and confidential Avery information relating to formulations for self-adhesive products. The indictment also alleges that on September 4, 1997, the defendants met with Victor Lee in a hotel room in Westlake, Ohio for the purpose of obtaining Avery confidential and proprietary information, documents and trade secrets in violation of the Economic Espionage Act of 1996.’
Avery Dennison won $40 million in damages in 1999. This was the first case to be tried under the 1996 Economic Espionage Act in America.
4. IBM Vs. Hitachi – 1980s
In the 1980s, IBM was able to win a court case against Hitachi and two of its employees for industrial espionage. Hitachi was charged with conspiring for stealing of confidential computer information from IBM and sending it to Japan. Hitachi pleaded guilty to the charges along with Mitsubishi Electric Corporation and a total of twenty-two Japanese businessmen, many of whom were senior officials.
As per fas.org, ‘The two employees who pleaded guilty were Kenji Hayashi, a senior engineer, and Isao Ohnishi, a software section manager. Mr. Hayashi was fined $10,000, and Mr. Ohnishi was fined $4,000, and both were placed on probation.’
5. Operation Night Dragon
Back in 2011, Chinese hackers were able to break into the computer systems of five multinational oil and gas companies. They made off with bidding plans along with other critical proprietary information. Dmitri Alperovitch – McAfee’s vice president for threat research – said at that time, ‘That information is tremendously sensitive and would be worth a huge amount of money to competitors.’
A report was compiled on the attack by McFee Inc that called the incident’ Operation Night Dragon’. As per Reuters, ‘The three largest U.S.-based oil companies, Exxon Mobil, Chevron and ConocoPhillips, all declined to comment on whether they had been targeted, citing policies not to speak about their security measures.’
