On June 8, 2018, I testified before the US-China Economic and Security Review Commission on “U.S. Tools to Address Chinese Market Distortions.” This was my second time testifying in the past three years. My written submission is available here. The written submissions of other speakers, including a video of the proceedings is available through this link. The presentations of my colleagues were all excellent.
I suggested several non-tariff alternatives for dealing with IP-related concerns with China, and underscored the necessity of developing appropriate domestic government structures to engage China on technology and innovation issues. For example, the Commission seemed generally supportive of raising the diplomatic rank of USPTO attaches overseas. I also discussed the importance of data-driven analysis, including use of the case database to look at how foreigners actually fare in the courts. The Commission seemed skeptical that the data captured some of the more egregious judicial cases of foreign mistreatment, which they viewed as undercutting the credibility of the data that is being generated. In my written submission, I encouraged the Commission to consider a hearing devoted solely to transparency in the courts.
The President’s recent decision to impose tariffs on Chinese imports in response to Chinese IP practices may render many of suggestions superfluous for now. Nonetheless, I believe the increasing complexity of China’s IP and innovation environment are issues that cannot be ignored. As I noted in my written testimony:
“The US experience suggests that innovation flourishes in open ecosystems where there is a free flow of capital, talent and technology. At the same time, the US needs to address mercantilistic practices which not only pose competitive threats to the United States but can also undermine the innovative ecosystems that have driven growth in the US economy, such as exist in Silicon Valley. Any steps taken to reduce collaboration with China or any other country needs to be carefully evaluated about its potential impact on our own technological competitiveness.”
In a separate, but nonetheless related matter, I spoke at the IPBC Global 2018 Conference in San Francisco on June 12 regarding developments in IP monetization in China. Here’s a good summary of my presentation. I thought one of the more telling moments in the panel I participated in involved China’s Technology Import/Export Regulations. One lawyer acknowledged that “the regulations are stupid” and that “what we try to do is have parties to a technology transaction acknowledge that the regulations exist and agree not to enforce them.” I discussed the regulations as potential “landmines” which could be invoked at a later time by a licensee. Many licensors appeared to be unaware of these regulations.