Report: Underground hackers and spies helped China steal jet secrets
Crowdstrike researchers reveal Beijing’s efforts to boost its own domestic aircraft industry
Chinese Government Spies have Hacked Aerospace Proprietary Data from around the globe
Holding information not signify that there is Comprehension of the Technology
There may be a Legal Tactic to Block C919 from FAA and foreign CAA certifications
Posted Oct 15, 2019 6:30 AM
Chinese government hackers working with the country’s traditional spies and agencies plotted and stole U.S. and European aircraft engine secrets to help Beijing leapfrog over its Western competitors in developing a domestic commercial aircraft industry, according to researchers at the cybersecurity protection firm CrowdStrike.
“Beijing used a mixture of cyber actors sourced from China’s underground hacking scene, Ministry of State Security or MSS officers, company insiders, and state directives to fill key technology and intelligence gaps in a bid to bolster dual-use turbine engines which could be used for both energy generation and to enable its narrow-body twinjet airliner the C919, to compete against Western aerospace firms,” CrowdStrike said in a report released Monday evening….
The aim of this hacking operation was to acquire intellectual property to narrow China’s technological gap in the aviation industry, and especially to help Comac, a Chinese state-owned aerospace manufacturer, build its own airliner, the C919 airplane, to compete with industry rivals like Airbus and Boeing.
A Crowdstrike report published today shows how this coordinated multi-year hacking campaign systematically went after the foreign companies that supplied components for the C919 airplane.
The IP acquired by the Chinese government will likely be included in the packages supporting a Type Certificate request of the FAA and other CAAs. Further, Comair would probably attach a TC from the CAAC. The FAA is not obligated under the Transport Airplane Issues List (TAIL) agreement to accept without question the Chinese determination of airworthiness. Certification proof is within the range of legitimate questions. What is the source of the justifications is not within the normal set of inquiries.
These safety organization neither have the authority nor the technical competence to decide whether the applicant has the right to use the data, which the above articles indicate that the proprietary information not owned by the Part 25 applicant. Both China and Russia have employed a strategy of catching up by improperly misappropriating the critical, valuable aerospace research product.
Ideally, the question of a global aeronautical standard for IP should come from the International Civil Aviation Organization. Realistically that UN body, composed of many Members envious of the superior aeronautical IP, would violate the rule against perpetuities to develop a global standard. While it is highly unlikely that a consensus could be reached, it is beyond any reasonable forecast that the standard would ever be enforced. ICAO is not a likely source of protecting IP, even If safety benefits from the underlying investment of research funds.
It is, however, certain that TC applications based on information purloined from America, Brazil, Canada, England, France, Germany and Italy. When the moving papers are received by a CAA, the certification organization will move forward without worrying about from where the data came.
While that may seem to be innocent, the proponent of the aircraft’s airworthiness may hold the data, but is not likely to fully understand the underlying mechanics, metallurgy, stresses, manufacturing processes, etc. Thus, questioning the applicant’s command of the data may be appropriate. Again, a CAA might not start such a questioning.
Under these circumstances, there appears to be a need for some injunctive action.
Michael Bednarek, a well-respected IP lawyer, suggests a possible legal tactic to attack the use of the “hacked” information. He points to an Exclusion Order issued by the U.S. International Trade Commission is one way to prevent importation of products that result from misappropriation of American trade secrets. Section 337 covers any unfair methods of competition and unfair acts (including trade secret misappropriation) in the importation of articles into the United States that injure or threaten to injure a U.S. industry.
There is an explicit “importation requirement” in section 337, i.e., the complainant must establish that infringing articles have been, or imminently will be, imported into the United States in order to prevail. However, importation of an article into the U.S. does not have to actually occur in order to bring a complaint before the ITC, but it must at least be imminent.
Filing with the FAA for U.S. government approval might be enough to suggest imminent importation. The Commission has previously recognized that there could be an imminent importation without a sale. See, e.g., Certain Variable Speed Wind Turbines and Components Thereof (Inv. No. 337-TA-376). For example, a contract for future sale for importation into the U.S. has been deemed sufficient to establish importation. Id. Further, a complainant can satisfy the importation requirement even if the sale was made outside the U.S. by a foreign manufacturer to an intermediary. See Ride-On Toy Vehicles (Inv. No. 337-TA-314) (importation established through sale to trading company outside the U.S.). Even a single flight into the U.S. might be enough. If accused articles are imported into the U.S., even a small quantity will satisfy the importation requirement, such as samples for a trade show. See, e.g., Acesulfame Potassium and Blends (Inv. No. 337-TA-403).
The Chinese government knows that bringing a low-priced jetliner to countries desperate for lift. They also recognize that the customer countries are unlikely to be aggressive enforcers of IP laws. The preemptive US ITC Exclusion Order may be a useful strategy to restrain the Chinese dragon.
A testamentary rule forbids a person from creating future interests (traditionally contingent remainders and executory interests) in property that would vest beyond 21 years after the lifetimes of those living at the time of creation of the interest.
Share this article: