US report warns on China's massive IP theft

The "unprecedented" theft of American intellectual property (IP) is costing the nation a whopping USD 300 billion annually and the main culprit is China, according to a study which recommended sanctions as tough as those used to combat terrorism and drug trafficking.
"The scale of international theft of American intellectual property is unprecedented - hundreds of billions of dollars per year, on the order of the size of US exports to Asia," a 11-month study led by high-ranking former US officials said.
The effects of this theft has resulted in tremendous loss of revenue and reward for those who made the inventions or who have purchased licenses to provide goods and services based on them, as well as of the jobs associated with those losses, it said, noting that American companies of all sizes are victimised.

The second and even more pernicious effect is that illegal theft of IP is undermining both the means and the incentive for entrepreneurs to innovate, which will slow the development of new inventions and industries, it said.
Intellectual property thieves should be slapped with a mix of banking sanctions, bans on imports and blacklisting in financial markets, the non-partisan commission said in its 89-page report.
"The banking system has a very well-developed system of denying the ability to change money for companies and other organisations that either support terrorism or are involved in drug activities," said Dennis Blair, former US Director of National Intelligence and a co-chairman of the commission.

"Unless current trends are reversed, there is a risk of stifling innovation, with adverse consequences for both developed and still developing countries," the IP Commission co-chair Jon Huntsman, the former US ambassador to China and presidential candidate, told reporters.

The American response to date of hectoring governments and prosecuting individuals has been utterly inadequate to deal with the problem, the study said.
China has been the principal focus of US intellectual property rights (IPR) policy for many years.
The report said China was behind 50 per cent and 80 per cent of the problem.
"The major studies range in their estimates of China's share of international IP theft; many are roughly 70 per cent, but in specific industries we see a broader range," the study said.