You Say: Cyber. I Say: Unsubscribe

Stop the presses! Sensitive IP has been stolen! Not only that, its some of the world's most advanced technology - robotic surgery! How will the Pentagon respond? Scrambling jets? Carriers on high alert?!?

Oh, one clarification, the headline Mako Sues over stolen trade secrets was not from CNN or NYT, it was from an almost as big a name media player -- the South Florida Business Journal. Not to be confused with the North Florida Business Journal one supposes.

Mako Surgical Corp. filed a lawsuit against rival Blue Belt Technologies and former sales manager Jeffrey Gellman over allegations that he violated his non-compete agreement and gave its competitor client data and trade secrets.

Gellman allegedly used his work email to send confidential information about Mako Surgical’s business to his personal email to help his new employer.

The Davie-based manufacturer of a hip and knee replacement surgical robot (NASDAQ: MAKO) has been under the gun to meet sales expectations, and had to revise its 2012 sales guidance lower last year. Mako Surgical projected sales would be flat or up slightly in 2013, but the emerging Blue Belt is trying to eat into its market share in this emerging field.

Why are we bombarded with IP copying stories as lead stories in all major media when the threat is otuside the US and told this is now our top priority when another story on the same issue (on very likely way more advanced technology) relegated to footnote in a comparatiely tiny media outlet?

Certainly just as much "cyber" was involved, after all the robotic surgery secrets were allegedly sent over email! Were told that "cyber" stealing of IP is the biggest threat of all, why is this Mako Surgical vs Blue Belt dispute of surgical robots not being handled by the White Hosue or at least the Secretary of Defense?

Well, you say, its because they are both in the same market. My answer to that is I can't hear you my ears are full of bullshit. Unfortunately the current international debate on "cyber" has precisely zero sense as to how markets operate. Ask your CEO where growth is coming from? Where are your products actually made? Mature developed nations or emerging Asia? Don't talk to me about "cyber" if you don't know how markets and supply chains work.

But hey maybe economics are not your thing, you serve the higher ideals of the American dream not the crass laws of supply demand. Well let's leave aside economics and do a historical tour of a wonderful country that built  itself from a frontier economy to a world leader through piracy, that country is America.

Its difficult to describe just how fundamental piracy was to building the US economy, the story is told very well in a must read book for any infosec pro - Smuggler Nation some examples:

• "Adam Smith was was such an admirer of smugglers - they were at the forefront of breaking down rigid trade barriers. He viewed a smuggler as 'a person who, though no doubt highly blamable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been, in every respect, an excellent citizen, had not the laws of his country made that a crime which nature never meant to be so.'"  
• "a mere 384 hogsheads of molasses per year officially arrived in Boston in 1754-55, but 40,000 hogsheads per year were required to run the region's sixty-three distilleries...Colonial merchants predictably balked when Britain suddenly stopped turning a blind eye to such smuggling in the 1760s. In a revealing line, John Adams would later write, "I know not why we should blush to confess that molasses was an essential ingredient in American independence."
• "Edward Randolph, the appointed head of customs in New England, brought thirty-six seizures to trial -- and all but two were acquitted."
• "Smuggling was so institutionalized that merchants were able to buy insurance policies to cover them in the event of seizure"
• Newport, Rhode Island was the epicenter of the Rum trade in colonial America. Today we tend to associate Newport with yacht racing and gilded-age mansions, but the origins of this northern port's fortunes were less glamorous...By the mid-1760s, twenty-two of the thirty Rhode Islan distilleries were based in Newport. As one historian has remarked, "If merchants from all the American seaports evaded the navigation laws to some extent, those from Newport stood alone as the greatest offenders." No wonder then that the inhabitants of the town - and the rest of the colony for that matter - were denounced by British Admiral John Montagu as "a set of lawless piratical people...whose sole business is that of smuggling and defrauding the King of his duties."
• "The port of New York was even more active than Rhode Island in trading with the enemy. Far from being a business of the socially marginal, such commerce involved not only the city's merchant elite but also the political class - including the mayor and Supreme Court justices"
• Benjamin Franklin described the navy's new anti-smuggling job in especially harsh terms with a heavy dose of sarcasm: "Convert the brave, honest officers of your navy into pimping tide-waters and colony officers of the customs. Let those who in the time of war fought gallantly in defense of their countrymen, in peace be taught to prey upon it. Let them learn to be corrupted by great and real smugglers; but (to show their diligence) scour with armed boats every bay, harbor, river, creek, cove, or nook throughout your coloines; stop and detain every coatser, every wood-boat, every fisherman; tumble their cargoes and even their ballast inside out and upside down; and, if a penn'orth of [dressmakers'] pins is found untethered [on the cargo manifest], let the whole be seized and confiscated. Thus shall the trade of your colonsts suffer more from their friends in time of peace, than it did from their enemies in war... O, this will work admirably.
• "Boston merchants became increasinly outspoken in their defiance. John Hancock, one of Boston's wealthiest shippers, even publicly declared that he would not permit customs officers to inspect his vessels
• "Alexander Hamilton's Report on Manufactures, 1791:"'To procure all such machines as are known in any part of Europe can only require a proper provision and due pains. The knowledge of several of the most important of them here is already possessed. The preparation of them here is, in most cases, practicable on nearly equal terms' Notice that Hamilton was not urging development of indigenous inventions to compete with Europe but rather direct procurement of European technologies through 'proper provision and due pains' - meaning breaking the laws of other countries"
• "Only after it had become a mature industrial power did the country vigorously campaign for intellectual property protection - conveniently overlooking its own illicit path to industrialization"
• "Historians credit Slater as being "the father of the American industrial revolution." But the Boston businessman Francis Cabot Lowell is credited with truly transforming New England textile manufacturing into a mass-production and internationally competitive factory system. Doing so involved pulling off the most remarkable case of industrial espionage in American history. Lowell travelled to Britain in 1810 for an extended stay allegedly for health reasons. The wealthy Boston merchant was not considered a rival manufacturer and therefore not treated with suspicion in local business circles. Lowell toured the Glasgow factories in the spring of 1811. Soon after he visited other factories to obtain "all possible information" on cotton manufracturing "with a view to the introduction of the improved manufacture in the United States" as his business partner later recounted.
• [back in the US in 1813] "Lowell's was the first mill in the country to combine all aspects of the textile production process...The integrated cotton mill was a transformative development in the history of textile manufacturing

The echoes of history are so strong here you need a Richter scale to measure them. Its how emerging economies grow, and get up to scale.  What did England do or not do? What might have worked better? I do not have all the answers here but I can clearly see that amidst what passes for international dialog on "cyber" both economics and history are decidedly absent and yet they very likely contain the seeds of the most important lessons and guideposts for forward looking strategy.

Comments

[Mr. Obvious]

Hey, if you don't like the infotainment, just change the ch... nevermind.

[MLS]

The infosec industry is a veritable Church of IP. Nice to see a protestant in the ranks speaking up. I would add that there is plenty of evidence that IP law also works against developed markets.