On Tuesday, August 15th, President Donald Trump signed a memo at the White House which authorized the U.S. Trade Representative (USTR) to make an inquiry into the alleged theft of American intellectual property which is believed to be aided by the Chinese federal government. Although there are concerns that the statement could increase tensions with China just as the U.S. government is seeking more cooperation from China on issues surrounding North Korea, the recent Trump memo comes in response to the $600 billion American intellectual property owners lose each year, a majority of which is due to Chinese tech transfer policies.
“The United States has for many years been facing a very serious problem. China’s industrial policies and other practices reportedly have forced the transfer of vital U.S. technology to Chinese companies. We will engage in a thorough investigation and, if needed, take action to preserve the future of U.S. industry. Potentially millions of jobs are at stake for the current and future generations. This will be one of USTR’s highest priorities, and we will report back to the President as soon as possible.”
The Chinese government has already responded to the IP probe with cautionary words for the U.S. government. According to news reports, a statement released by China’s Ministry of Commerce admonished the Trump Administration’s for attempting to destroy principles of multilateralism. China’s commerce ministry also called for the U.S. to abide by pledges it made with the World Trade Organization (WTO).
It’s very interesting to note that China is calling on the U.S. to abide by its pledges with the WTO when it’s unclear as to whether China upholds its own pledges as a WTO member. Reports indicate that, going back to the 1980s, China has enforced joint venture policies which require foreign firms to transfer technologies to domestic firms as a price of entering the Chinese market. That’s a policy which flies in the face of WTO regulations on tech transfer.
And yet, in light of US Inventor’s recent protest of the Patent Trial and Appeal Board (PTAB), it seems to be clear that, if President Trump truly wants to protect the economic interests of U.S. intellectual property owners, he may want to investigate the current situation for patent holders within the U.S. Tech transfer rules enforced by the Chinese government are no doubt detrimental to U.S. patent owners but the PTAB has been outright deleterious with at least 90 percent of challenged patents being found defective at that tribunal.