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Senate Passes IP Theft Bill Designed to Punish Firms That Steal

by Chris Brook on Wednesday January 13, 2021

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A bill aimed at increasing economic penalties for companies that actively seek to steal US intellectual property is headed to the House of Representatives.

In hopes of punishing foreign companies, shortly before the end of 2020, the Senate passed a bill designed to crack down on individuals and firms who carry out intellectual property theft.

The bi-partisan bill - the Protecting American Intellectual Property Act - was co-authored by Senators Ben Sasse (R-Neb) and Chris Van Hollen (D-Md) and designed to increase economic penalties for organizations and other entities ultimately found in connection to IP theft.

The Senate universally passed the bill which would impose blocking sanctions or prohibit U.S. exports to any firm found either engaging, benefiting from, or enabling the theft of U.S. intellectual property.

The bill requires the president to submit a report to congress every 180 days to identify these individuals or firms, along with the corresponding chief executive officers and board members of firms, and whether they've benefited from the theft of U.S. trade secrets

The legislation was one of several bills geared towards combating IP theft introduced this past summer. Sasse and Van Hollen's legislation was introduced in June.

Other IP theft bills introduced in 2020 have seemingly stalled in the Senate, including the Stop Theft of Intellectual Property Act of 2020 – a bill authored by Chuck Grassley (R-Iowa) and Sheldon Whitehouse (D-R.I.) and the Protecting America from Spies Act, introduced by Senators Marco Rubio (R-Fla.), Kelly Loeffler (R-Ga.) and Thom Tillis (R-NC). Both bills were introduced in July but haven’t moved since.

Sasse and Van Hollen’s legislation, S. 3952, may be the most likely to move on but it still needs to pass the House of Representatives, something unlikely to happen in the near future with the lower house busy with impeachment proceedings this week.

Intellectual property theft has become a national security issue and a growing threat for the FBI.

Recent reports claim Chinese IP theft costs the United States upwards to $225 billion to $600 billion a year. That’s part of the reason why fighting intellectual property theft – especially incidents involving theft originating from China - has been a primary objective of the Department of Justice (DOJ) over the last several years.

At a virtual event last summer, John Demers, the head of the National Security Division (NSD) at the DOJ reiterated that China is to blame for roughly 80% of economic espionage cases and 60% of cases involving the theft of trade secrets his department looks at.

The department has also been aggressive at sniffing out individuals associated with China's Thousand Talents Program, an initiative that recruits individuals, usually professors and researchers, to work for the country in exchange for access to U.S. IP, technology, and trade secrets.

Perhaps the most public action by the department in recent memory came last February, when it filed charges of racketeering and conspiracy to steal trade secrets against Huawei, the Chinese telecom accused of repeatedly breaking US laws and stealing technology from six US companies. Those charges followed a previous indictment alleging the company stole proprietary data.

Tags:  IP theft

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