I’m back with part two of my discussion/rant—this time looking into the problem of Intellectual Property (IP) Theft. First, what is Intellectual Property? According to the World Intellectual Property Organization, IP is a creation of the mind that can include inventions, literature and artistic works. They are protected by patents, copyrights, trademarks and trade secrets. And just to be sure that we’re all on the same page, theft is knowingly taking or transferring property belonging to another with the intent of depriving the owner from said property indefinitely.

The first patents and copyrights were granted in the United States in 1790, though the name “Intellectual Property” was first used in 1867. There have been patent and copyright infringements and similar issues over the years, but problems have grown exponentially since the late 20th century with the combination of constantly growing supply chains and the explosion of digital technology and internet file sharing.

Intellectual Property theft can happen anywhere—within a nation’s borders or beyond. It hurts companies, their employees, even sovereign nations. Currently, the major culprit of IP theft is China. Billions of dollars are lost to IP theft every year. According to a CNBC poll in March, 2019, 20% of American companies have had IP stolen by either the Chinese government or Chinese state-run companies. (1) As of March 2019, China has stolen between $225 billion and $600 billion dollars, and up to 750,000 jobs have been lost. (2)

There are several ways to carry out IP theft. Think modern-day Jams Bonds. Corporate espionage is one. Cyber-attacks on computers, networks and other personal devices can quietly get massive amounts of information and data. In addition, the Chinese government can be quite straightforward about it. In some cases, Beijing simply insists that a foreign company that’s invested, or working, in China, provides all IP information and licenses. In other cases, rather than the state simply demanding the information, a state-run company requires that the overseas firm it’s working with transfer their technology to the Chinese firm.

IP can include everything from watches (am I the only person who still wears a watch?) and lamps to lasers and airplane parts. If a company is OK allowing Beijing to have it’s IP to build lamps in China, well, have fun. But to share American IP on things like our pharmaceuticals and turbine parts—I just keep hearing my father’s words, “HOW STUPID CAN YOU BE?” There are times when it’s simply common sense (while apparently isn’t that common) to refuse to provide IP to someone who, in truth, wants to do you harm. While China is full of good, decent people, the government is a despicable, dangerous, totalitarian state that doesn’t care about it’s own people. Why should we think that Xi Jinping et al. would work with us?!?!? Until there is a sea-change in Beijing, we need to move both our strategic IPs and supply chains home—or at the very least to countries where we can work well together.

Recently, the US has started enforcing the appropriate patent, copyright and trademark laws. In addition, there have been some small successes, notably in December, 2018, when the G-20 insisted, and the Chinese agreed, to a memorandum which outlined 38 punishable offenses for IP theft. But it remains to be seen if they carry it out, or simply talk a good game. In addition, the US maintains the National Intellectual Property Rights Coordination Center to deal with IP Theft. Both the FBI and Homeland Security are increasingly focusing on IP theft of elements of health, safety, and national security.

1. Fortune “One in 5 U.S. Companies Say China Has Stolen Their Intellectual Property.: 3/1/2019
2. Fortune “Briefing,” 3/1/2-19