What is the LEADS Act, and How Does it Affect Manufacturers?

July 27, 2015 | American Manufacturing

Fight for your company's IP! In many ways, technology has made our everyday lives easier than ever. For example, we are now able to communicate with people on the other side of the planet in mere moments using satellite communications relays. This allows businesses to get a worker on the phone and get an instantaneous update on operations almost no matter how much distance separates the head office from the worksite.

Many millennials take almost-constant access to the internet wherever they go for granted now. They stream videos to their phones while waiting in line at the store, email or text their friends during their spare time at work, and digitally store their progress reports and other sensitive information on their company’s cloud data storage service.

The Risk of Data Theft for Manufacturers

In recent years, keeping the information stored in the cloud has become a major concern for companies all over America. Hackers and data thieves, both local and abroad, are increasing the sophistication of their attacks on company data troves, trying to steal the intellectual properties (IPs) and financial information of manufacturers and other businesses for their own profit.

Modern manufacturing techniques rely heavily on the use of automated manufacturing equipment and processes to achieve the most efficient, high-quality results.

At Marlin Steel, wire bending robots rapidly bend precise angles into steel wire while meeting tight production tolerances that manual laborers couldn’t hope to keep up with. However, these machines rely heavily on software programs and data to do their jobs.  The design docs and CAD files used to program these machines to make a specific part are often stored on the cloud for fast and easy access to minimize down time for setup and programming.

If stolen, these files could be used by a foreign competitor to manufacture an exact copy of a patented part.

The Problem with Current Data Privacy Laws

Keeping proprietary data private is a huge concern for manufacturers. Unfortunately, legislation for handling data privacy hasn’t really kept up with the way that companies use the internet and cloud storage for their information.

As Marlin’s CEO outlined in a recent article in The Baltimore Sun, “recent action by the U.S. government forcing American technology companies to turn over private customer data and email records that are being stored at data centers located outside the U.S. are raising concerns about the strength of current digital privacy laws.” In short, how secure is our data when a government employee can compel any company to release any record at any time, regardless of where the information is actually stored?

The major issue here is that the major piece of legislation regulating government access to the secure data of a business, the Electronic Communications Privacy Act (ECPA) of 1986 was penned before the internet as we know it even existed. Because of this, the old Act cannot possibly cover most of the technological developments that have occurred in the nearly 30 years that have transpired since it was first written.

That’s right, in 2016, the ECPA will turn 30.

It would have been impossible for the writers of the original Act to anticipate the way that the internet would have changed the way people store and transmit sensitive information.

Introducing a Much-Needed Update to Data Privacy Legislation

This update to the legislation is way past due for IP theftThankfully, there is a new piece of legislation currently being introduced on Capitol Hill that seeks to update the ECPA of 1986 and strengthen the privacy of data stored in the cloud.

The new Act, called the LEADS Act (an acronym for Law Enforcement Access to Data Stored Abroad Act of 2015), is a bipartisan piece of legislation that aims to strengthen legal protections for electronic communications.

For example, the LEADS Act has in it a provision to require law enforcement agencies to obtain a search warrant to access the content of digital communications from cloud computing service providers. This means that data stored with a third party would enjoy the same legal protections as a file stored in your home or office.

Even better, the Act requires an investigating agency to cooperate with foreign governments through the Mutual Legal Assistance Treaty (MLAT) when investigating content stored abroad.

As stated in the text of the Act as of July 27, 2015, “A court issuing a warrant pursuant to this subsection, on a motion made promptly by the service provider, shall modify or vacate such warrant if the court finds that the warrant would require the provider of an electronic communications or remote computing service to violate the laws of a foreign country.” (This may change before the Act is finally passed).

In short, an investigating government agency cannot compel your cloud computing/data storage company to violate their own nation’s data privacy laws. This provides an extra layer of protection for your company against arbitrary government intrusions on your sensitive business records.

Overall, the LEADS Act should bolster confidence in U.S. IT innovations and help to protect the privacy of business documents and communications made online. This should allow manufacturers to invest a little more easily into information technology that will help them streamline their production processes without worrying about unnecessary intrusions on their privacy.

You can track the progress of the LEADS Act on the govtrack.us website.

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