USITC Launches Investigations into China's IPR Practices

May 25, 2010

At the request of the Senate Committee on Finance, the U.S. International Trade Commission (USITC) has instituted two investigations to provide reports quantifying the effect on American competitiveness of China intellectual property rights (IPR) practices.

In its formal letter to the USITC, the Committee stated: “Despite widespread evidence of the harm to U.S. industries, authors, and artists resulting from IPR infringement in China, the U.S. Government has not conducted a comprehensive economic analysis of the effect of China’s ineffective IPR protection and enforcement on the U.S. economy and U.S. jobs.” As requested, the USITC will deliver two reports to the Committee.

The first report, China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy (Inv. 332-514), will describe the principal types of reported IPR infringement in China, describe China's indigenous innovation policies (under which China reportedly promotes the technologies and brands of Chinese companies over those of non-Chinese companies), and outline analytical frameworks for determining the quantitative effects of the infringement and indigenous innovation policies on the U.S. economy as a whole and on sectors of the U.S. economy, including lost jobs. The USITC expects to deliver the first report to the Committee by November 19, 2010.

The second report will focus on the effects of intellectual property infringement in China and the country's indigenous innovation policies on the U.S. economy (China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy (Inv. 332-519). It will build on the first report by describing the size and scope of reported IPR infringement in China; providing a quantitative analysis of the effect of reported IPR infringement in China on the U.S. economy and U.S. jobs (including on a sectoral basis), as well as potential effects on sales, profits, royalties, and license fees of U.S. firms globally, to the extent possible; and discussing actual, potential, and reported effects of China's indigenous innovation policies on the U.S. economy and U.S. jobs, quantifying these effects, to the extent feasible. The USITC expects to deliver the second report to the Committee by May 2, 2011.

Those interested in submitting comments for the first report, should no later than June 9, 2010. The USITC is also accepting written submissions for the second report until November 16, 2010.

For more information on what comments the USITC is accepting, please contact a Barnes/Richardson attorney.