Innovation is happening at American research universities, often in collaboration with American companies who happen to be partnered with Chinese businesses.
And China is working overtime to steal and profit from it all.
Last week Senator Marsha Blackburn (R-TN) raised concerns about something called the China “Talent Program” that sponsors Chinese students to work at leading research universities in the U.S..
In questioning with two witness experts, Blackburn said that Tennessee companies and others she spoke to, including sources at Oak Ridge Labs, said that China is using the program to steal Intellectual Property (IP) and profit from it.
One common way China gets away with it is to file with the U.S. Patent Office, claiming their companies have come up with similar technologies. The patents are often poorly composed and meant to shield them from having to pay American innovators who actually deserve the economic benefit.
During the hearing, Blackburn asked David J. Kappos, a world renowned attorney in the area of Intellectual Property, about the extent of China’s theft and patent application schemes.
Kappos said that while he didn’t have exact numbers, China has filed thousands of patents that he agreed were “low quality” with the U.S. Patent Office.
Blackburn said in her state, the entertainment and auto industries were especially prone to targeting by Chinese IP theft:
“You know, we have a significant auto industry in Tennessee. And you have LG and [others] that are doing big investments in our state with batteries for electric vehicles. And there is a good bit of concern around this, and how China is trying to push into some of this lithium battery components [innovation]. And when you look at Huawei, and the communication systems that are involved, people are really quite concerned about this.
“And how they will capture that data, and how they’re really going to end up diminishing the value of U.S. held patents because they have infringed and done their own patent application.”
Another witness, Robin Feldman of UC Hastings, an Arthur J. Goldberg Distinguished Professor of Law, and Director of the university’s Center for Innovation, said the impacts of China’s infiltration and abuse were hard to overstate.
She told the committee:
“Our ideas, our innovation, our intellectual capital, these are the crown jewels of the American economy. It is extremely important that those not be siphoned off overseas by others who are not observing intellectual property rules properly.”
Blackburn said that while administrations had taken some steps to counter the problem, much more needed to be done.
“I know administrations have worked very hard to try to bring greater strength to bear on those issues. But it’s tremendously important for American companies and for our economic stability. Tennessee, in everything from advanced tooling to EVs and the battery technologies that power them.”
Notably, this past July, the U.S. government accused China of exploiting Microsoft Exchange Server vulnerabilities for attacks and—for the first time—of using criminal hackers to carry them out. It released a report warning of China’s ongoing targeting of the defense, semiconductor, medical, and other industries in order to steal intellectual property.
At the Judiciary committee hearing, Kappos and Blackburn had another exchange that focused on China’s efforts to lift EV technology:
Kappos: “Well I can just perhaps add that the fear that I have is these technology transfers like out of Tennessee in the lithium-ion battery space, they tend to be in one direction. And so the foreign company comes in, and it learns a lot from Americans in Tennessee, it takes that technology back overseas, and we never see it again, and it creates jobs and economic prosperity overseas. So that’s where I think the concern in my mind goes. It’s a kind of a tech drain that’s occurring.”
Blackburn: “Yeah. And I think a lot of this happens through the Talent Program, through China’s Talent Program. Where they send people over, and then they take the ideas back and monetize those ideas, undercutting the innovators that actually did that work here. So tightening up who we let into our research universities is probably a big part of protecting our patents.”
Note the interesting confluence of recent stories in the Trends Journal concerning EV battery recycling technology (“OAK RIDGE AUTOMATES BATTERY RECYCLING” 24 Aug 2021 and our story in the Hi-Tech Science section of this issue about a new Chinese recycling initiative, “EV BATTERY RECYCLING IS NOW A THING.”)
During the hearing, Blackburn also brought up the issue of China’s “state capitalism,” which has seen the Chinese government actively subsidize and favor state owned companies, making it harder for American companies to compete, especially in China’s home markets.
At the time of its acceptance into the World Trade Organization in 2001, China had pledged not to engage in such rigging to advantage its companies.
But in the two decades since China joined the WTO, their state owned companies have only grown in power, now accounting for 28 percent of the country’s GDP.