The protection of intellectual property has become an increasing concern among businesses throughout the world. After all, gaining a technological edge is often the key to gaining the competitive edge in the market place. That is why national governments, the World Trade Organization, and the United Nations have all put effort in to creating laws, regulations, and guidelines to protect intellectual property.
When people think about intellectual property, they tend to think of things such as television shows, music, films, and video games. They are also inclined to believe that most intellectual property theft occurs through bootlegging and Internet piracy. However, there is another type of intellectual property theft that predates our technological age by centuries, yet continues to threaten firms everywhere.
Industrial espionage is the theft, copying or unauthorized reproduction of confidential trade secrets for use by a business competitor. Sometimes it is perpetrated by competing corporations; however, in many instances a national government conducts or facilitates the act. During the 1980s and early 1990s, there was much made in the popular media about the appropriation of American technology by East Asian competitors such as Japan. Today, such accusations are more likely to be leveled against China, and with good reason. The Chinese government and its firms are some of the most active players in global industrial espionage. However, in the past China was much more likely to be the victim of this type of crime, rather than the perpetrator. Indeed, industrial espionage in a tactic that goes back centuries if not millennia.
In the 6th century, the Emperor of the Byzantine Emperor Justinian I dispatched Christian monks to China in order to undermine its monopoly on the production of silk. Years later, the monks returned to the Empire bearing silkworm eggs, Mulberry Bush seeds, and the knowledge to produce silk. This industrial theft was a boon for the West, even though it significantly damaged the economies of China and Persia.
In the centuries following the Renaissance, European powers began to recognize that technology could give them an economic advantage over their rivals. Soon after conquering the Aztecs, the Spanish were able to set up a profitable chocolate trading operation, going to great lengths to keep knowledge of the product as secret as possible. However, the Spanish monopoly over this industry did not last long. An Italian explorer managed to discover Spain’s secret cocoa plantations while on a trip to the New World. Upon his return to Italy, he circulated the recipe in his home country, which quickly spread throughout Europe.
During the Age of Exploration, the nations of Europe spent a lot of time and money charting the globe and securing trade routes to East Asia. One of the most sought-after items was Chinese porcelain, an easily breakable good that did not hold up well during long and bumpy sea voyages. There was a lot of effort put into replicating the Chinese art of porcelain making, yet most attempts proved unsuccessful. However, in the 18th century, a Jesuit priest named Francis Xavier d’ Entrecolles managed to infiltrate a center of porcelain manufacture in China. With meticulous precision, he recorded what he saw and passed secret letters detailing the process back to his home country of France. Using these instructions, French craftsmen were able to successfully reproduce the coveted good, undermining China’s monopoly on this profitable trade.
However, this was not to be France’s only attempt at industrial espionage. The country continued to wage an intelligence effort against its rival England for much of the 18th and 19th century. The French government deliberately sought out and recruited British glassmakers, shipwrights, and metal artists in order to harness their expertise. Even so, England could not complain too much about France’s intrigues. After all, the British East India Company waged an industrial espionage campaign of its own, stealing tea from China for cultivation in India. Nevertheless, the Europeans were not the only nations to engage in the theft of trade secrets.
Samuel Slater was born in England in the 18th century and, while still young, managed to secure employment in one of the most advanced textile mills in the country. When he later immigrated to America in 1789, he brought with him extensive knowledge on the mass production of textiles. Slater opened many advanced mills in the United States, becoming a business mogul and a self-made millionaire. Reviled in his home country, Slater was lauded in the United States for helping the young nation gain a competitive edge over the technologically superior United Kingdom.
Approximately one century later, Great Britain again became the victim of industrial espionage. Alfred Krupp, a 19th-century German industrialist, established a network of spies to protect his company’s trade secrets while simultaneously gaining intelligence on his competitors. In the process, he managed to gain extensive knowledge of Britain’s steelmaking techniques. Krupp used this information to improve his operations and become one of the leading businessmen in Germany. In fact, his success was pivotal to the development of Germany’s industrial heartland, the Ruhr Valley.
Industrial espionage persisted into the 20th century, through the Cold War, and continues to be a threat into the present-day. Luckily, modern firms have tools to protect themselves that businesses in the past often lacked. Patents, international agreements, and legislation protecting trade secrets help businesses guard their hard-earned intellectual property. However, industrial espionage has been a threat for centuries and will likely continue to be a threat for centuries more. That is why, despite modern legislation and legal protections, firms should continue to remain vigilant against this ever-present threat.