Posted on 05/18/2006 11:25:13 AM PDT by softengine
The CAD/CAM company thought it was protecting itself, having employees of the Indian outsourcing company that was debugging its source code sign non-disclosure agreements. But when a disgruntled outsourcing employee swiped a copy of the code a few years back and tried to sell it to the CAD/CAM vendor's competitors, the vendor found out that the NDAs were of little use when it came to prosecuting the alleged thief in India.
"They weren't worth the paper they were written on," says Nenette Day, an FBI special agent out of Boston who did double duty as both the case agent and undercover agent investigating this crime against software maker SolidWorks. "The employees would have had to sign the agreement with the Indian company, not the American one."
Day, who has worked in computer crime for 8 years and calls herself "a geek with a gun," told attendees at last week's CIO Forum that their companies need to do serious research about the laws of any country to which they outsource work.
CIO Forum is a unique conference during which IT vendors and 300 potential customers unite on a cruise ship out of New York City. (Other discussions at the event focused on topics such as identity theft and biometrics and grid computing.)
A handful of FBI agents were on board to consult with IT pros about cybercrime threats, a topic that FBI agents say companies are often reluctant to talk about.
As for protecting yourself when outsourcing to other countries, Day advises IT executives to assume that you have no legal rights. "It should not start with your understanding of American law," she says.
In India, for example, there is no theft of trade secret law, Day says. India does have an IT act, she says, but it is mainly focused on copyright violations.
Day says that despite the fact that "there was not a shred of evidence that we did not have" against the alleged SolidWorks thief, prosecutors in India have failed to convict the suspect and he continues to work. The FBI initially tried to lure the suspected thief out of India to simplify prosecution, but he was too smart for that, Day says.
Indian police nabbed the suspect in 2002 when he allegedly tried to sell the code to Day while she was undercover (she says he initially tried to sell the code for about $250,000, not realizing it was probably worth $300 million). Fortunately, she says, the original source code was recovered and copies were not believed to have been sold.
In the wake of that case, Indian software developers have formed a lobby to push for stronger intellectual property protection laws, concerned that companies won't outsource to India if they aren't better protected, Day says. Outsourcing firms, like the one SolidWorks worked with, have also tightened their own security policies considerably in recent years, she says.
Another thing to consider when outsourcing to other countries is not just whether there are laws to protect intellectual property, but whether the laws are enforced. "No criminal law exists if the police will not enforce it," she says, noting that the FBI received an unprecedented amount of cooperation from its counterpart in India on the SolidWorks case (after threatening to expose India's laissez-faire attitude toward the case).
Questions companies should ask when outsourcing to other nations, Day says, include the following: ....[see article for more]
Not just outsource but any kind of business, unless it is extremely short termed. I don't understand why companies build anything in China. They could just come and say you no longer own the property. They don't believe in private property rights anyway. Then there's Mexico. If the mayor of Mexico City, a socialist on his way to communist, his hero is Castro, get elected, who's to say he won't do the exact same thing.
Speaking of, I've got a great deal on a new CAD product if anyone's interested.
It's called SolidVerks.
;^)
Corporations have been warned about this risk wrt outsourcing for many years. Most have chosen to ignore it and screw American citizens in the process in favor of sending the work overseas where it can be done cheaper. Screw 'em - they asked for it.
No, the FBI agents from there are only classified as "Above Average". ;-)
no, though strangely enough, they are all above average.
Ensuring the security of property and the enforcement of contracts are just some of those little things, along with a defense, a judicial and a law enforcement infrastructure to make it work, that is assured to businesses in the US. All those business taxes and regulations do buy something useful after all.
I find it interesting to note who this company went to when they got in trouble in India -- the FBI! These companies feel no sense of loyalty to the American worker when they decide to outsource but go crying to the FBI when they need rescuing (on the US taxpayer's dime of course). I have no sympathy for companies who get into trouble in other countries because of outsourcing and I don't think we should be offering them any US taxpayer funded law enforcement assistance.
Bump.
BUMP!
"In India, for example, there is no theft of trade secret law, Day says. India does have an IT act, she says, but it is mainly focused on copyright violations."
Some of my co-workers who are working in India are having a big problem explaining to their Indian colleagues that they shouldn't steal software routines from other vendors. They aren't quite getting it yet.
And they will, when it suits their purpose. At some time in the not too distant future every company operating in China will simultaneously find that all their Chinese interests are now nationalized and the property of the "Peoples" Republic, lock, stock and barrel.
Surprise, NOT!
Thanks for the happy news!
It is slowly happening here as well, thanks to Kelo. We need to reverse this tide before it becomes a tsunami.
I read Henry Hill's book about his life in the mob, and he described the Mafia as, "A police force for crooks - a place where crooks can come if another crook steals from them."
Even crooks understand the need for rule of law and the enforcement of contracts. Add the people's right to own property and you have the three major ingredients of a fertile business environment.
I agree with you on that point. The pro-outsourcing crowd's response to hundreds of thousands of U.S. taxpayers being laid-off is well "tough luck! suck it up and its your problem". So I think, if these corporations lose $300 million worth of software, well thats just too bad, but our tax dime should not be going toward its recovery. If they don't have any loyalty to people in this country, then we should not afford them any of the benefits of this country, with their overseas problems.
More evidence that our government helps these corporations to screw us.
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