As the world turns on intellectual property, Trump has
refocused efforts on China and intellectual property. He apparently leaned off China supposedly
because of concerns with obtaining China’s help with North Korea. Now he’s apparently back on track. Interestingly, The New York Times has recently
published a strongly worded Op-Ed by Dennis C. Blair (“former director of
national intelligence and a former commander in chief of the United States
Pacific Command”) and Keith Alexander (“former commander of the United States
Cyber Command and a former director of the National Security Agency”) titled, “China’s
Intellectual Property Theft Must Stop.” The
Op-Ed is strong endorsement for Trump’s focus on China’s asserted intellectual
property theft. The Op-Ed states in
part:
Chinese companies,
with the encouragement of official Chinese policy and often the active
participation of government personnel, have been pillaging the intellectual
property of American companies. All together, intellectual-property theft costs
America up to $600 billion a year, the greatest transfer of wealth in history.
China accounts for most of that loss.
Intellectual-property
theft covers a wide spectrum: counterfeiting American fashion designs, pirating
movies and video games, patent infringement and stealing proprietary technology
and software. This assault saps economic growth, costs Americans jobs, weakens
our military capability and undercuts a key American competitive advantage —
innovation.
Chinese companies
have stolen trade secrets from virtually every sector of the American economy:
automobiles, auto tires, aviation, chemicals, consumer electronics, electronic
trading, industrial software, biotech and pharmaceuticals. Last year U.S. Steel
accused Chinese hackers of stealing trade secrets related to the production of
lightweight steel, then turning them over to Chinese steel makers.
Perhaps most
concerning, China has targeted the American defense industrial base. Chinese
spies have gone after private defense contractors and subcontractors, national
laboratories, public research universities, think tanks and the American
government itself. Chinese agents have gone after the United States’ most
significant weapons, such as the F-35 Lightning, the Aegis Combat System and
the Patriot missile system; illegally exported unmanned underwater vehicles and
thermal-imaging cameras; and stolen documents related to the B-52 bomber, the
Delta IV rocket, the F-15 fighter and even the Space Shuttle.
Citation to data
backing up the claims in the Op-Ed would be helpful. It is important to remember though that back
in 2015, the New York Times published another article concerning China’s new
antiterrorism rules for various foreign companies doing business in China. The upshot of the rules basically required
access to computer source code as a condition to doing business in China. Industry was objecting at that time for
several reasons, including national security as well as intellectual
property. It looks like that problem has
not gone away.
On a positive
note, reports from China seem to indicate an uptick in enforcement for
intellectual property law theft. I’ve
heard some say this is part of China’s transition to an innovation/services
based economy and that they are hard at work at changing beliefs concerning
intellectual property. Notably, New Balance
recently received a $1.5 million award concerning trademark infringement from a
Chinese company in Suzhou. This is
reportedly the largest award by a Chinese court against a Chinese company in favor of a
foreign company. This award follows the
recent decision favoring Michael Jordan and another $500,000 award in Hangzhou
concerning New Balance.