Over the past several years, there has been increased focus on attempts by Chinese entities to steal valuable confidential information from United States companies. At a recent congressional hearing, witnesses estimated the annual transfer of wealth and knowledge from Chinese economic espionage at roughly $600 billion, with telecommunications, AI, quantum computing, hypersonic weapons, biotechnology, and agriculture identified as primary target sectors. What many people may not realize, however, is that economic espionage is not new, and historically, it has proven capable of seeding an entire domestic industry built on purloined information. Indeed, the early U.S. textile industry’s success rested on Francis Cabot Lowell’s theft of a British power-loom design. The theft did not just harm one British mill; it helped transplant an entire industry’s competitive advantage across an ocean, and was so important that a mill town along the Merrimack River in Massachusetts was later named “Lowell” in his honor.

Textile Power

Britain’s dominance as the world’s leading textile power at the start of the 19th century rested on several technological advantages, most prominently what became known as the Cartwright loom, named for its inventor, Edmund Cartwright. Notably, Cartwright began his career as a clergyman in the Church of England. He turned to invention only after visiting a mill and observing a bottleneck: the mill could spin thread in great quantity but weaving it into cloth could not keep pace. 

In 1785, Cartwright patented a working power loom that improved weaving efficiency so much that workers at one manufacturer who had ordered Cartwright looms burned the factory to the ground in protest. Though later inventors refined the design, its basic mechanical principles remained essentially unchanged until the mid-twentieth century. The loom automated weaving, dramatically increasing production speed, reducing dependence on manual labor, accelerating the shift to factory-based manufacturing, and driving urbanization and labor-market change. It was, in short, the machine that made Britain the dominant force in mechanized cotton weaving. 

Unsurprisingly, the British government treated the design as a closely guarded secret: export of the machines, models, or drawings was illegal, as was emigration of the skilled textile mechanics who knew how to build them.

Francis Cabot Lowell

None of that stopped Francis Cabot Lowell from seeking the design. Lowell, a Boston merchant, traveled to Britain in 1810-1811, ostensibly for his health, and visited numerous mills in Scotland and England, observing their spinning and weaving machinery, including the Cartwright loom. Multiple sources agree that he was unable to obtain or purchase actual plans or models of the loom, consistent with British export restrictions; instead, he memorized the machinery’s workings in detail and carried no physical plans out of the country. Some accounts, though unconfirmed, suggest he sometimes toured mills in disguise as a farmer, and that British authorities searched his luggage on departure but found nothing, because the design existed only in his memory.

Back in Massachusetts, Lowell worked with an engineer to reproduce the loom from memory and from drawings Lowell made after his return. After roughly a year of trials, the two built a working power loom that improved on the British design, and by 1815 the two men were awarded a U.S. patent for it; though a copy of that patent does not appear to survive today, since a catastrophic 1836 fire destroyed the Patent Office building along with virtually the entire collection of early patents and models. 

The reconstructed design had already become the foundation of the Boston Manufacturing Company, which Lowell helped found in 1813 and which built one of the first integrated cotton textile mills in the world, at Waltham, Massachusetts. Lowell died in 1817, and a group of his business associates went on to establish a new, larger mill town along the Merrimack River, naming it Lowell in recognition of his role in launching American industrial textile manufacturing.

The EEA

Despite this early and vivid demonstration of the economic value of trade secrets — and of what a country stands to lose when it fails to protect them — the United States did not enact a federal law criminalizing trade secret misappropriation until the Economic Espionage Act (EEA) of 1996. The EEA’s legislative history describes at length the growing importance of intellectual property, and trade secrets specifically, to the national economy: 

In a world where a nation’s power is now determined as much by economic strength as by armed might, we cannot afford to neglect to protect our intellectual property. Today, a piece of information can be as valuable as a factory is to a business. The theft of that information can do more harm than if an arsonist torched that factory. . . . It is, in short, the very information that drives the American economy. For many companies, this information is the keystone to their economic competitiveness. They spend many millions of dollars developing the information, take great pains and invest enormous resources to keep it secret, and expect to reap rewards from their investment. 

This is even more true today than it was when these words were written in 1996. That legislative history also addressed the threat posed by foreign entities to U.S. trade secrets.

There is a pointed irony here. Were the shoe on the other foot, that is, had someone done to a modern American company what Lowell did to Britain, his conduct is exactly what the EEA was designed to criminalize. Yet because Lowell reduced the trade secret to nothing more than what he carried in his own memory, a prosecution today would face a serious practical obstacle. While the language of the EEA strongly suggests that information “stored” only in an individual’s memory can support a trade secret theft prosecution, the government has not, to date, brought charges against anyone for misappropriating a trade secret based on memorization alone. It is unlikely that it will do so in the future since proving such a case without any physical evidence of misappropriation would be exceedingly difficult, if not impossible.

Lowell’s theft did not just harm one British mill; it helped transplant an entire industry’s competitive advantage across an ocean. What the story ultimately offers is not a comforting moral about villains and victims, but a sober one about incentives. A nation on the wrong side of a technological gap will, absent a binding rules-based order and a credible enforcement mechanism, treat the appropriation of a rival’s proprietary knowledge as rational statecraft rather than as theft, and history suggests it will often be rewarded for doing so. The difference between Lowell’s Boston then and China today is not the underlying logic, which is identical, but the world each operates in: one with no meaningful international IP regime to violate, and one that has expressly agreed to abide by one. That distinction is precisely what gives the modern legal and diplomatic response its force and will determine whether it succeeds where Britain’s export bans failed.

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Editor’s note: The author is an intellectual property litigator based in New York.