Two Republican lawmakers in the United States have introduced a bill aimed at protecting American intellectual property (IP) from the Chinese Communist Party (CCP) regime and other adversaries.
Chair of the House Foreign Affairs Committee’s Indo-Pacific Affairs Subcommittee, Representative Young Kim (Republican, California), stated that the “Protecting American Innovation and Development Act (PAID) is designed to expose foreign adversaries engaging in the illegal acquisition of American IP, safeguarding the competitiveness of American businesses and national security.”
In her statement introducing the bill last Tuesday (July 2), she expressed, “We cannot allow authoritarian regimes like the Chinese Communist Party (CCP), North Korea, Russia, and Iran to steal intellectual property, pilfer American trade secrets, and undermine our national security.”
PAID targets foreign hostile entities that unlawfully access U.S. critical or emerging technologies, such as hypersonic systems, artificial intelligence, and space technology-related intellectual property. The bill mandates the Secretary of Commerce to identify and report to Congress on the misconduct of these entities.
For years, the CCP has been accused of stealing intellectual property and trade secrets from companies and institutions. A report released by the U.S. Trade Representative’s Office in 2018 estimated that “losses resulting from China (CCP) stealing American intellectual property range between $225 billion to $600 billion annually.”
Chair of the House CCP Task Force, Representative John Moolenaar (Republican, Michigan), pointed out, “Companies like Huawei, which are controlled by the CCP, unlawfully appropriate our technology, putting American tech companies in jeopardy. I am honored to be a co-sponsor of Representative Kim’s bill, which aims to combat this theft and support the creativity of American tech firms.”
If passed into law, the End-User Review Committee (ERC), led by the U.S. Department of Commerce and composed of senior officials from the Departments of State, Defense, Energy, or Treasury, will have the authority to determine whether foreign hostile entities are using U.S. intellectual property without permission. Once confirmed, the Secretary of Commerce will publish the violators in the Federal Register.
The bill also allows Americans who have had their trade secrets stolen by foreign entities or have evidence of such activity to submit applications requesting the ERC to investigate and ascertain the illegality of the foreign hostile entities.
Earlier this year, U.S. Ambassador to China Nicholas Burns expressed concerns over intellectual property theft when operating in China by American companies.
In related measures, Representative John Curtis (Republican, Utah) introduced the Combatting China’s Pilfering of Intellectual Property Act (CCP IP) in March to pressure China to cease its theft of American companies’ intellectual property.
Curtis proposed implementing economic sanctions on relevant companies, government agencies, and individuals, as well as imposing visa bans on CCP members and government officials until China takes actions to stop intellectual property theft.
A report released by the 2020 China Task Force, composed of 15 bipartisan members covering 14 committees, disclosed that the CCP is seeking to surpass the U.S. as a global tech leader through intellectual property theft, industrial espionage, and other hostile activities. The report also stated that these actions encourage non-state actors to engage in malicious activities in China through official state actions and unofficial/secret state actions and policies.
“The CCP aims to undermine or destroy the value of U.S. companies’ intellectual property, causing economic harm to the U.S. while allowing (Chinese) companies to profit from IP theft. Additionally, the CCP seeks to exploit the U.S. intellectual property system to damage the U.S. economy, providing (Chinese) companies with advantages over U.S. competitors, such as by raising costs or imposing barriers on American businesses,” the report added.
In October last year, the Five Eyes intelligence alliance – Australia, Canada, New Zealand, the United Kingdom, and the United States – warned that intellectual property theft in the tech sector and other commercial espionage posed a significant threat to the West, unprecedented in human history.
FBI Director Christopher Wray stated that CCP’s espionage activities span multiple fields, including agriculture, aviation, biotechnology, healthcare, robotics tech, and academic research. Additionally, Beijing’s tech theft extends beyond large corporations like those on the Fortune 100 list and includes smaller startups.
Wray added, “We have about 2,000 ongoing investigations related to the Chinese government’s theft of information.”