Paranoia: The Facts Behind the Fiction Adam Cassidy, the 26-year-old protagonist of Joseph Finder's new thriller, PARANOIA, is compelled by a turn of events to become a corporate "mole" in his company's chief competitor - a spy. Such penetration schemes were commonplace during the Cold War between the U.S. and the Soviet Union, the "wilderness of mirrors" battle between the CIA and the KGB. In the field of international espionage, this kind of operation still goes on. But how prevalent, really, is this kind of espionage in the corporation? Far, far more than most people realize. Almost every Fortune 500 company has a "competitive intelligence" unit to keep track of what its rivals are up to. Many of them are headed by ex-CIA or ex-FBI officials. While most corporations make every effort not to violate the law, there is a surprising number that engage in illicit, or at least gray-area, activities. Sometimes they hire "security agencies" or private-investigative firms to get secret information out of a competitor while ensuring "plausible deniability." American companies lose an estimated fifty to one hundred billion dollars a year in the theft of trade secrets. According to the FBI, in the last five years, at least twenty foreign nations have tried to penetrate high-tech companies in Silicon Valley. The techniques used to steal documents, computer files, disks, or plans range from the low-tech - Dumpster-diving, or rummaging through trash - to the more sophisticated, including the use of laser microphones to listen in on indoor conversations from hundreds of yards away via sound vibrations on a building's windows. When a CEO or other top company official travels, it's not unheard of for his hotel room to be bugged. All of the espionage tradecraft techniques mentioned in PARANOIA are true. There really is such thing as the "Keyghost," a tiny device that enables a spy to capture computer keystrokes, e-mail, instant-messages, even passwords - without detection. A cell phone can be hidden in a conference room in advance, its ringer turned off, allowing a spy to call in and use his phone as an open microphone. Here are just a few of the more prominent instances of real-life corporate espionage: *Boeing vs. Lockheed Martin. Earlier this year, the Lockheed Martin Corporation sued its chief competitor, Boeing, accusing it of stealing a "treasure trove" of thousands of confidential documents on Lockheed's top-secret, latest-generation rocket program through a covert unit at Boeing called the "Black Hat Team." *Hewlett-Packard penetrated. In May 2003 it was revealed that an espionage ring attempted to use various deception techniques to pilfer the secret plans for the next-generation network laser printer that's being developed at HP's closely guarded printer labs in Boisie, Idaho. *Schick vs. Gillette. In August of 2003, shortly after Schick announced its new four-bladed Quattro razor, Gillette sued Schick, charging that Schick had stolen the design from them. The evidence produced by Gillette was based on 10 Quattro cartridges they'd somehow managed to obtain from Schick before the razor was released - though Gillette wouldn't say how. *Ferrari vs. Toyota. The Italian auto manufacturer Ferrari recently charged Toyota with stealing the design for its Formula One racing car, claiming that the Toyota TF103 was a copy of the Ferrari F2002. On December 12, 2003, German police arrested an aerodynamics engineer who worked for Toyota in Cologne and had previously worked for Ferrari. (Interestingly, the founder of Ferrari, Enzo Ferrari, admitted to once being an industrial spy for Alfa Romeo!) *Lucent. In 2001, the FBI arrested two employees of Lucent Technologies for conspiring to steal Lucent trade secrets and sell them to the Chinese government. *Bill Gates vs. Larry Ellison. In 2000, the Oracle Corporation, whose founder and CEO, Larry Ellison, considers himself an archrival of Microsoft's Bill Gates, hired a D.C.-based private investigative firm to dig up information embarrassing to Microsoft in its antitrust battle with the U.S. Justice Department. The investigative firm infiltrated agents into several offices in Washington, even paid janitors for Microsoft's trash. *GM vs. VW. In 1996, General Motors sued Volkswagen, charging that GM's former head of production had stolen trade secrets and turned them over to VW. This resulted in a landmark intellectual-property case, at the conclusion of which GM was able to obtain an enormous settlement from VW. *Procter & Gamble vs. Unilever. In 2001, P&G undertook a corporate-espionage program by hiring a "consulting firm" to rummage through Unilever's trash and steal the secret formula for a new hair-care product. The two companies eventually reached a settlement; P&G agreed to pay Unilever $10 million. The firm hired to do the dirty work is headed by a former Green Beret and U.S. government intelligence operative who served in the Phoenix Program, a covert operation during the Vietnam War. Remarkably this isn't the first time P&G has gotten caught in corporate espionage against Unilever. In 1943, a Procter & Gamble executive bribed an employee of Lever Brothers (as Unilever was then called) to steal prototype bars of a new soap Lever was developing. P&G used the stolen formula to rework its own Ivory Soap, which soon became one of the most familiar brand names in America. P&G ended up having to pay Lever $5 million for patent infringement. *Avery Dennison. In 1999, in one of the most famous cases of corporate espionage, the head of a Taiwanese company and his daughter were arrested, and convicted, in an FBI sting operation while attempting to steal secrets from the U.S. label manufacturer Avery Dennison. The Taiwanese had paid an Avery Dennison employee $160,000 for the secret formulas for the company's pressure-sensitive adhesive. And a bit of history. . . *Corporate and industrial espionage is at least as old as the sixth century, when the Byzantine emperor Justinian hired two monks to visit China, which then held a worldwide monopoly on the production of silk. The monks smuggled silkworm eggs and mulberry seeds out of China in hollow bamboo walking sticks. In a few short years, Byzantium had replaced China as the world's leading producer of silk. *During the 18th century, France, alarmed by Britain's industrial and military supremacy, embarked upon a concerted effort to steal Britain's industrial secrets. *In the 19th century, the inventor Thomas A. Edison enlisted one of his lab assistants to steal plans for an electrical generator invented by George Westinghouse, so that Edison could discredit Westinghouse's invention and thereby defeat him in the marketplace. *The entire Japanese auto industry began with a design stolen from the English. *And the industrial revolution, which turned America into a global economic power, grew out of a single act of industrial espionage. A Boston merchant, Francis Cabot Lowell, traveled to England in 1811 and stole the plans for the Cartwright power loom, brought it back to America, thus launching the textile industry that sparked the industrial revolution.