What tools are available for the president to address IP theft? Traditions of territoriality and sovereignty, as well as the willingness of foreign companies to trade IP for access to the Chinese market, give the latter a degree of legitimacy that outright industrial espionage lacks. (To put this in perspective, this is also what happened a century earlier in the US, which until 1890 failed to protect foreign works, and then waited yet another century before joining the major international copyright treaty.)Īlthough piracy and counterfeiting remain issues in China, the two newer forms of siphoning off foreign IP value are theft-often cyber theft-of extraordinarily valuable trade secrets and know-how, and the technology transfers required of American and other foreign companies as a condition to doing business on Chinese soil.

The USTR would complain of China’s failure to halt piracy of US-created goods the two countries would enter into a MOU in which China would agree to clean up its act three years later the USTR would identify continuing violations and come back and say, “this time we really mean it ” and the two countries would enter into another, more detailed MOU, and so on.Įventually what happened was that, as China’s domestic copyright industries found themselves competing with cheap knock-offs of foreign goods, they pressed the Chinese government to fortify the IP enforcement process on its own. Historically, the oldest forms of appropriation of American and other foreign-created intellectual goods were film, record and software piracy, and counterfeiting of luxury goods and pharmaceuticals.Īs is happening today, IP got injected into the trade process, but the waltz was long and slow. How do Chinese companies take IP? Is it theft?

Stanford Law School Professor Paul Goldstein The challenge in coming up with a more precise number stems less from uncertainties about the valuation of the stolen IP than from differing views as to what IP in fact is being appropriated and how. The very width of the estimate should indicate how much guesswork has gone into the numbers game. Is the estimate in the US Trade Representative (USTR) report, in your opinion, accurate? How extensive is IP theft in China? Why does it happen, and how can it be stopped? In this Q&A, Stanford Law School Professor Paul Goldstein discusses the issues.

technology.” According to a 2017 report by the United States Trade Representative, Chinese theft of American IP currently costs between $225 billion and $600 billion annually. President Trump announced stiff new tariffs in March, hitting back at China for what he calls “the unfair and harmful acquisition of U.S.

Ip theft cases