Baucus, Grassley seek in-depth study of Chinese intellectual property theft

Top lawmakers on the Senate Finance Committee are asking federal trade officials to investigate China's "rampant theft" of Americans' intellectual property

In a letter sent Monday to the International Trade Commission, both committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) their concerns that China's lax enforcement of copyright protections has harmed "American competitiveness."

They consequently tasked Chairman Shara Aranoff with providing lawmakers two reports within the next year that examine the effects of China's intellectual property rules on U.S. businesses and jobs. Both Baucus and Grassley promised in their letter to make both reports public.

“American workers, the American economy and American businesses are suffering because of China’s failure to curb the rampant theft of American intellectual property,” Baucus said in a statement on Monday. “China needs to step up to the plate, live up to its international obligations and protect and enforce U.S. intellectual property rights."

The first report, due November 19, asked ITC officials to summarize the "principal types" of reported intellectual property infringement in China and develop a framework for assessing those violations' economic effects, the lawmakers wrote in the letter.

That request arrives as congressional debate over China's "indigenous innovation" rules continues to grow more vociferous. Lawmakers have expressed increasing concern with Beijing's controversial tech policy, which essentially forces Chinese government agencies to purchase tech equipment only from businesses that develop and register their intellectual property patents locally.

Those rules have long angered U.S. businesses and trade organizations, who feel they are now precluded from selling goods to the Chinese government, one of the state's largest technology purchasers. And the "indigenous innovation" approach has similarly infuriated lawmakers, who regard it as an attempt to obstruct U.S. trade.

“We need to do more to crack down on China's manipulative trade policies,” Grassley said Monday.  “China is using its ‘indigenous innovation’ program to discriminate against U.S. products in the Chinese market."

The second report, due May 2, 2011, would have the ITC describe "the size and scope" of intellectual property theft in China, including its effects "on the U.S. economy and U.S. jobs, including on a sectoral basis." The two senators described that report as essential, given that the U.S. government "has not conducted a comprehensive economic analysis" of such theft.

"The report we commissioned will quantify the effect of China’s intellectual property rights infringement on America’s competitiveness and will shed light on what we can do to better protect U.S. innovation in China — and create good-paying jobs here at home,” Baucus said.

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