United States Steel Corp. on Wednesday said it was withdrawing a portion of its claims with the International Trade Commission over whether Chinese companies hacked into the company’s computer systems to steal trade secrets.

The Pittsburgh-based steelmaker said it was dropping its trade-secret claim from consideration in its Section 337 case with the International Trade Commission. But it will continue to pursue antitrust and false designation claims under Section 337. In a statement, it said that U.S. laws don’t provide adequately protection for companies who are victims of cybertheft as U.S. Steel (NYSE: X) has been.

“We remain committed in our efforts to seek relief for each of the claims alleged in the Section 33 complaint, but today believe this was our best course of action,” U.S. Steel said in a statement. “We continue to pursue a review before executive and judicial bodies of the inequities of the statutes that were enacted before the dawn of the Internet age and the substantial threats posed by cyber espionage.”

U.S. Steel was one of several companies that were hacked by what federal officials say were representatives of the Chinese military who later gave materials stolen in the hacks to Chinese steel producers. Those Chinese steel producers then used the knowledge to unfairly compete against U.S. steel companies, U.S. Steel said in May 2016. The ITC has been investigating those claims separately from criminal charges filed in 2014 into the hacks themselves.

U.S. Steel based its complaint on Section 337 of the Tariff Act of 1930, which seeks to protect domestic companies from unfair competition. It received support from its major union, United Steelworkers International, which called it a “bold, but necessary” approach that borrowed from intellectual property rights law.

The company in late January had appealed an administrative law judge’s November 2016 ruling to drop the antitrust part of the Section 337 case, according to Insidetrade.com. The ruling about antitrust law said that “Section 337 as it stands cannot provide the relief that U.S. Steel is seeking."

In its statement Wednesday afternoon, U.S. Steel said that a state-sponsored cyberattack carries what it called an “unbearable burden” for the company being targeted.

“When we filed the case, we highlighted the significant cyberthreat every company faces, and we began a dialogue about the need to reform our antiquated laws,” U.S. Steel said in the statement. “We have made strides in that area, but we believe more cooperation and collaboration is needed between the federal government and the private sector to address the continued threat of malicious cybercrimes and to provide reasonable legal avenues available for corporate victims to seek remedies. When there is active movement in this direction, we will be able to evaluate the best next steps for our trade secrets claim.”

Feb 15, 2017
Source: bizjournals.com