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Press Release -- October 30th, 2013
Source: Verizon

Intellectual Property Theft – Stealing Ideas

Manufacturers Feel the Brunt

by Stefanie Scott

Stealing can come in many forms particularly when it comes to theft of intellectual property – or IP.

Unlike other crimes, with theft of intellectual property it’s not someone picking your pocket or robbing a bank. It’s the theft of ideas, inventions or formulas – including trade secrets, classified information and technical resources or creations like motion pictures, music and software.

The Verizon 2013 Data Breach Investigations Report (DBIR) released earlier this year found that 20 percent of the breaches included in the study were cyberthreats aimed at stealing intellectual property. In addition, the report found 20 percent of network intrusions involved the manufacturing, transportation and utilities industries.

In the manufacturing industry, theft of intellectual property means a business can lose its “secret ingredient” that sets a product apart from the competition, and dilutes the brand. Often firms don’t know there has been a breach until a knock off product or service surfaces that is surprisingly similar to the company’s prized product.

The Commission on the Theft of American Intellectual Property (The IP Commission) in May released a report that estimated the annual losses as a result of international intellectual property theft amount to as much as $300 million a year in the United States.

“The theft of intellectual property can have a devastating impact on a manufacturer,” said Patricia Iurato, vice president of sales for the manufacturing practice at Verizon Enterprise Solutions. “With intellectual property, a common misconception is that secrets are stolen by a disgruntled or unscrupulous employee. In reality, there is a big threat from outside the organization — and in some cases initiated from halfway around the world — using tactics like malware, phishing and other tricks.”

Besides threat of IP theft, manufacturers also face the risk of cyberespionage, particularly in the areas of product testing and development. For example, teams often work around the clock around the world on product development and testing. Often a team in the United States may make changes to a product and a team in China might run tests. If someone hacked into the system and changed results, products could get produced with flaws.

Another example could be the case of a U.S. car manufacturer that uses machine-to-machine technology to obtain feedback from cars making laps on the test track. If someone hacked into the system, it could lead to cars getting manufactured with flaws or worse – lead to cars careening off the track, Iurato said.

Verizon took a deeper look at data security threats facing firms with large amounts of IP, including manufacturing, technology and professional services. The Industry Threat Landscape report draws on three years’ worth of data from the DBIR and found the attackers were interested in wide range of IP, including customer lists, designs, product roadmaps and code.

The Verizon report recommends best practices to defend against attacks on IP. They include:

  • Use pre-employment screening to help reduce the risks of internal problems later – and don’t give users more privileges than they need.
  • Educate employees about social engineering and the potential danger of clicking on links from unidentified senders.
  • Implement time-of-use rules and “last logon” banners.
  • Consider two-factor authentication, IP “blacklisting” and restricting administrative connections.
  • Monitor and filter outbound network traffic.
  • Enable application and network logs and monitor them. All too often, evidence of events leading to breaches was available but it was not noticed or acted upon.
  • Identify what’s critical and what constitutes normal behavior – and establish mechanisms to sound the alarm if something is not normal.
  • Focus on the obvious — rather than the minutiae. A simple script that counts log file length and alerts administrators to exceptions can be pretty effective and save time, effort and money.

Verizon works closely with its customers to develop strategies to protect data and physical assets and recommends that organizations should operate under the assumption they will suffer a security breach and take steps to prevent it.

Iurato said: “Unfortunately, in this digital age no organization is immune to a data breach. Fortunately, today we have the tools to battle cybercrime – it’s about selecting the right ones and using them in the right way.”

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