Despite continued trade talks with China, the federal government continues to aggressively pursue efforts to prevent and hold Chinese companies accountable for trade secret theft and economic espionage. As described below, in the last month alone, the U.S. Government has taken three very decisive actions in combating the threat.

  1. The Senate Judiciary Subcommittee announced the creation of a subcommittee on Intellectual Property. The subcommittee will focus, among other intellectual property matters, on the theft of trade secrets by state supported actors such as China. According to Chris Coons (Ranking Member of the subcommittee), one of the major challenges for the U.S.’s intellectual property system in recent years is “rampant theft from state actors like China,” which among other issues is “causing our nation’s economy to lose billions of dollars annually and threaten our country’s long-term technological dominance.”
  2. Lawmakers continue to scrutinize Huawei, which was charged with stealing trade secrets from T-Mobile. Two members of the new IP subcommittee, John Cornyn and Ben Sasse, joined several other senators  in sending a letter to the U.S. Departments of Energy and Homeland Security, expressing “concern over the national security threat” posed by Huawei solar inverters to U.S. electrical systems and infrastructure. The senators believe that due to the vulnerability of American energy systems to cyberattacks, the federal government should “consider a ban on the use of Huawei inverters in the United States and work with state and local regulators to raise awareness and mitigate potential threats.” This is in addition to Congress’s recent ban of Huawei from the U.S. telecommunications equipment market due to concerns with the company’s links to China’s intelligence services.
  3. Earlier this month, two individuals, Xiaorong You and Liu Xiangchen, were indicted for conspiracy to steal trade secrets worth more than $119 million. The indictment alleges that You stole trade secrets relating to BPA-free coatings for beverage cans from two American companies where she was employed. You allegedly conspired to provide stolen information to a Chinese company, in exchange for payment, and an ownership stake in a new Chinese company that would own and use the trade secrets. Liu also allegedly agreed to help You obtain awards sponsored by the Chinese government to “induce individuals with advanced technical education, training, and experience residing in Western countries to return or move to China and use their expertise to promote China’s economic and technological development.” You is alleged to have carried out the conspiracy through numerous overt acts. These include photographing trade secrets on one employer’s computer screen, photographing equipment in her other employer’s secure and restricted laboratories, and transferring the stolen trade secrets from both companies to an external hard drive and her Google Drive account.

These preemptive and enforcement actions by Congress and the Department of Justice are indicative of the U.S.’s continually increasing efforts to protect the trade secrets of American companies from overseas threats, namely China.