How existing laws can help the US recover technology stolen by China

For over a generation, China has been appropriating U.S. technology discovery, building new industries from those new technologies and selling them around the globe, including back to us. Many recent technologies that China leads in, like lithium ion and lithium iron phosphate batteries and photovoltaic solar, were not invented in China. They were mostly discovered in America, supported by significant U.S. government funding. 

To a large degree, U.S. counter efforts on China’s technology appropriation have been focused on preventing more stealing, and the response to what has been already appropriated has been mostly to just complain. However, the U.S. government has significant intellectual property and contractual rights to much of that technology due to its financial support of technology research at the early stages.  

The U.S. should take action to recover that intellectual property and halt China from selling products in the U.S. and globally that violate those rights. This could significantly repatriate the manufacturing of stolen technology to the U.S. and also prevent China from appropriating and commercializing even more U.S. technology being developed with the assistance of taxpayer funding.

U.S. government agencies provide more than $150 billion in funding per year for discoveries of all types, including those from the Departments of Energy, Defense, Commerce, Health and Human Services, NASA and the National Science Foundation. The government typically has several types of IP and commercialization rights embedded in the grants as a part of that funding. 

The largest IP rights bucket is under the terms of the Bayh-Dole and Stevenson-Wydler Acts, which require research recipients to attempt to commercialize any inventions that come from their work, with specific obligations. If the recipients don’t execute on those terms, the government has “march-in rights” to reclaim the IP and control how the rights are subsequently licensed. 

Any appropriation of IP from labs, universities or companies supported by the U.S. government, from open source or illegal appropriation by the Chinese, is likely in violation of the IP requirements under the acts. And the various government agencies already have authorization to march in on the IP and exert legal rights. 

Another common legal requirement of government technology research and development grants is a “build in America” clause. This typically requires that if the technology becomes commercialized, it must be materially built in the U.S. to be sold here. 

These and other historical federal funding requirements for many technologies now being sold by China are likely being violated. So instead of wringing our hands and complaining about all that has been stolen by the Chinese, the government should exert its various rights and prevent China from selling those products.

The government could start a China IP Initiative to claw back our discovery commercialization in energy, biotechnology, information technology and other sectors. The respective agencies could identify key technologies that were supported under Bayh-Dole and other authorities, coordinate with the Justice Department, which manages litigation for the departments and take action to secure the IP and enforce its rights globally. It could also possibly work through the Commerce Department and the International Trade Commission to issue Section 337 actions that would prevent those affected products from being sold in the U.S.  

In addition, the government could extend its actions to international jurisdictions, like the European Union, whose legal IP protections could likely support our action there too. There are possibly similar IP protections in the European Union, United Kingdom and elsewhere that could also be enforced based on early governed funding in those jurisdictions.  

The U.S. government provides significant support for research and development. In doing so it has clear IP rights, and no new legislative authority is needed to act on these material rights. The government should take action with these rights to reclaim and protect the investment from Chinese appropriation. 

Paul Dabbar is a former undersecretary for Science at the U.S. Department of Energy and CEO of Bohr Quantum Technology. Ted Garrish served as assistant secretary of international affairs and general counsel at the U.S. Department of Energy and is a principal at Annapolis Energy Consulting.