America Needs a Solution to Bring Back Stolen Intellectual Property

COMMENTARY Homeland Security

America Needs a Solution to Bring Back Stolen Intellectual Property

Feb 20, 2018 2 min read
COMMENTARY BY
Riley Walters

Former Senior Policy Analyst, Economist

Riley Walters was a senior policy analyst and economist at The Heritage Foundation.

Key Takeaways

The Commission on the Theft of American Intellectual Property estimates that it costs U.S. innovators and consumers hundreds of billions of dollars each year.

The federal government could punish thieves by limiting their access to U.S. financial markets, slapping them with fines, or both.

CFIUS doesn’t need to be reformed to deal with intellectual property that’s already been stolen.

Intellectual property theft is a huge problem for America. The Commission on the Theft of American Intellectual Property estimates that it costs U.S. innovators and consumers hundreds of billions of dollars each year.

Innovation drives this economy. The nation’s future prosperity hinges on our ability to protect new ideas as they come along. But what can we do about intellectual property that’s already been stolen?

When addressing international theft, lawmakers often reference the Committee of Foreign Investment in the United States, an interagency group that reviews proposed foreign investments in domestic companies that might carry risks to our national security.

The committee, commonly referred to as CFIUS, is involved in protecting against the illicit transfer of intellectual property. It evaluates whether a proposed transaction is part of a foreign government’s industrial espionage efforts to obtain American commercial secrets.

President Trump’s recently released national security strategy states that the White House will work with Congress to strengthen CFIUS, but it doesn’t say how, or in what way. Moreover, it’s hard to see how even a seriously beefed up committee could bring back stolen intellectual property.

For starters, it has a specific mission. The committee doesn’t review all foreign investments. Only those that may adversely affect U.S. national security fall under its purview. Given the rising number of investments into the United States, the committee’s plate is already full.

Moreover, the committee has no authority to prevent theft when there is no foreign investment involved. Nor does it have any authority over — or power to bring back — what’s already been stolen. Frankly, that’s how it should be. But obviously, we need to do more to combat intellectual property theft.

Recently, the House Financial Services Subcommittee convened a hearing to explore just how the U.S. government should respond to the legal and illegal transfers of U.S. technology abroad.

The best way to deal with illegal transfers is also the most obvious: Uphold the rule of law by taking legal action against foreign companies that steal intellectual property from American companies. Several types of action are possible.

The federal government could punish thieves by limiting their access to U.S. financial markets, slapping them with fines, or both. Washington could further protect American intellectual authority by imposing penalties on customers of the thieves. These are companies and individuals that knowingly use stolen intellectual property.

The president already has the authority to sanction under the industrial espionage section of the International Emergency Economic Powers Act.The commission recommended using that authority back in February.

CFIUS doesn’t need to be reformed to deal with intellectual property that’s already been stolen. That is not and should not be its job. Yes, the committee needs more resources, but it needs them just to keep up with its existing responsibilities. Loading up this already overburdened committee with even more responsibilities is not the way to go.

In dealing with the transfer of technology abroad, the committee plays an important role in protecting intellectual property. But the committee is not the right mechanism for recovering the billions of dollars taken from Americans through intellectual property theft.

This piece originally appeared in The Hill on 12/21/17