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U.S. Congress Message to China: You Need Not Bid

The recent introduction of the bi-partisan Airport Infrastructure Resources (AIR) Security Act in the United States Congress is a direct attempt to intervene in a Chinese company’s efforts to provide passenger boarding bridges to U.S. Airports, according to the sponsors of the bill.

As Congressman Ron Wright (co-sponsor of the bill) indicated in his May 18th press release, “This legislation prohibits federal airport improvement funds from being used to purchase passenger boarding bridges from companies that have violated the I.P. rights and threaten the national security of the United States.”

The rationale behind the legislation according to Congressman Wright is, “…we must be resilient against attempts by our adversaries, namely China, and their state-sponsored enterprises to infiltrate critical systems and carry out espionage and intellectual property (I.P.) theft.”

This legislation proposes to address the protection of critical infrastructure and protection of intellectual property from theft and infringement.

 Nonetheless, this legislation appears to do more than attempt to block the Chinese from benefiting from U.S. federal infrastructure improvement funds. This legislation seems to be saying to China the following: Since you persist in acquiring our intellectual property (trade secrets) through all conceivable backdoor (economic espionage) means, we will continue to block you from entering through the front door.

Since the China Initiative was announced by the U.S. Department of Justice (DOJ) in November 2018 to address the disproportionate theft of U.S. trade secrets by the Chinese, it is worth taking a moment to reflect on a sampling of what all that attention has achieved.

In a recent DOJ report titled, “Information About the Department of Justice’s China Initiative And Compilation of China-Related Prosecutions Since 2018 it states, “About 80 percent of all economic espionage prosecutions brought by the U.S. Department of Justice (DOJ) allege conduct that would benefit the Chinese state, and there is at least some nexus to China in around 60 percent of all trade secret theft cases.”

To drive that point home, the report cites thirty-nine (39) examples of prosecutions (which include convictions and charges pending) filed from April 4, 2018, until May 10, 2020, that range from university professors, private industry scientists, graduate students, companies such as Huawei, as well as C.I.A., U.S. Navy and U.S. State Department employees.

One thing that is notable, of course, about this proposed legislation is that it is just that: legislation. It is the U.S. Congress that is acting to address the theft of U.S. intellectual property, and not only the White House.

Two other particularly notable pieces of U.S. Legislation emanated from previous administrations and congresses to address trade secrets theft:

1.   Economic Espionage Act of 1996, which, as explained by Mara Hvistendahl in her recently published book titled, The Scientist and the Spy: A True Story of China, the FBI, and Industrial Espionage “…the Economic Espionage Act, which made trade secrets theft a federal crime. The 1996 law represented a seismic shift: it was the first time in American history that attacks on American business were branded as a national security threat.”

2. Defend Trade Secrets Act of 2016, is explained on the American Bar Association website, “This important new legislation creates a federal, private, civil cause of action for trade-secret misappropriation in which “[a]n owner of a trade secret that is misappropriated may bring a civil action . . . if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”

In considering the above-proposed AIR legislation, it’s essential also to note some of the other executive and legislative actions employed in other I.P. protection-related areas such as potential trademark infringement liability for e-commerce platforms.

Given the global consensus that 85 percent of the world’s counterfeits come from China and Hong Kong, respectively, addressing the explosion of counterfeits traveling through e-commerce platforms is another issue high on the list of challenges faced by the White House, Congress, and the world.

So, the current Airport Infrastructure Resources (AIR) Security Act legislative proposal is aligned with the overall U.S. executive and legislative strategy of addressing I.P. theft and infringement issues from multiple vantage points.

It appears the U.S. government is trying to seal up all the leaks of American IP by trying to reinforce the infrastructure of a dam with a myriad of holes. It is convinced that it will take countless strategies to seal it up. China, metaphorically, is the billions of gallons of water that has been relentlessly pressing and leaking through the U.S. intellectual property protection wall for decades from countless points of entry.

The proposed AIR legislation is another potential sealant for one camouflaged leak. The holistic U.S. IP protection program endeavors to be like The Little Dutch Boy who put his finger in the dike to keep his town from being flooded.

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Ron Alvarez is an IP investigations and protection consultant and writer in New York City. He is a former NYPD lieutenant where he investigated robbery, narcotics, internal affairs, and fine art theft cases. Ron has since coordinated the private investigation of international fraud and money laundering cases, as well as IP-related investigations and research involving the four pillars of IP: copyright, patents, trademarks, and trade secrets. Ron is a graduate of the FBI National Academy and earned a B.A. in Government and Public Administration from John Jay College of Criminal Justice in Manhattan. He has written a number of articles for various investigative publications, as well as published "The World of Intellectual Property (IP) Protection and Investigations" in November 2021.

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