House Commerce Hearing to Focus on Ways to Combat Cyber Espionage and IP Theft
Congress should expand its efforts to address international intellectual property theft beyond cybersecurity legislation, former Sen. Slade Gorton, R-Wash., a member of the Commission on the Theft of American Intellectual Property (IP Commission), is expected to say this Tuesday in testimony before the House Commerce Committee’s Oversight and Investigations subcommittee. The IP Commission is working on issues including recommend policies that will mitigate intellectual property theft by China and others (http://1.usa.gov/11wjHmO). The subcommittee is holding the hearing to determine the scope of cybersecurity threats to U.S. intellectual property and technology, and the best legislative ways to address those threats.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Gorton and other witnesses are expected to focus mainly on China’s role in intellectual property theft. Although China is not the only country where cyber theft of U.S. intellectual property originates, “it is the only nation that considers acquiring foreign science and technology a national growth strategy,” said the House Commerce Committee’s majority staff in a memo (http://1.usa.gov/16k6kSS). International thefts of U.S. intellectual property have an estimated value of more than $300 billion per year, with China creating “roughly 50 percent-80 percent of the problem,” Gorton said in a prepared version of his testimony. A “permissive domestic legal environment” in China has made that country the main source of intellectual property theft, with Chinese business reaping the benefits, he said.
The IP Commission has recommended the U.S. government restructure its response to intellectual property theft, with the secretary of Commerce as the government’s leading government official in charge of implementing IP protections. Congress should also consider amending the Economic Espionage Act and “shifting the diplomatic priorities of our overseas attachés,” Gorton said. But long-term mitigation of intellectual property theft will only occur if the U.S. continues to “work on establishing stronger rule of law in China and other IP infringing countries,” he said.
It’s urgent that the U.S. “compel Beijing to change its approach to cyberspace and deter future Chinese cyber theft,” said Larry Wortzel, a member of the U.S.-China Economic and Security Review Commission, in prepared testimony. The commission is reviewing possible recommendations to Congress to combat the problem, including more-detailed exposure of China’s role in cyberespionage and linking economic espionage to trade restrictions and bilateral issues, he said. President Barack Obama should also use his authority under the International Emergency Economic Power Enhancement Act (IEEPEA) to declare cyber intellectual property theft an “extraordinary threat to the national security ... or economy” of the U.S., Wortzel said. That authority would allow the White House, in consultation with Congress, to address intellectual property theft and cyberespionage by investigating and freezing transactions and assets, along with blocking imports and exports. “While this authority has traditionally been employed to combat international financing of terrorist organizations and the proliferations of weapons of mass destruction, there is no statutory limitation that prevents the President from applying the IEEPA to cyber espionage issues,” Wortzel said (http://1.usa.gov/12SjEMb).
U.S. efforts to combat Chinese cyberespionage must center on diplomacy, since most plausible domestic measures needed to manage cyber espionage threats will be difficult for the government to implement, said Center for Strategic and International Studies Director James Lewis. “It is not in our interest to start a military conflict with China, nor is it in our interest to crash the Chinese economy.” High-level engagement with China on theft of U.S. intellectual property, along with the “development of measures that will increase U.S. leverage in the engagement process,” is a better scenario for long-term success, Lewis said. The U.S. should also strive for close coordination with allies to create “norms of responsible behavior in cyberspace” and improve the U.S. domestic cyberdefenses, he said (http://1.usa.gov/12SkyIh).