Group of North American companies report intellectual property theft by Chinese firms

FORUM Staff

Some North American-based businesses say they’ve been victims of intellectual property (IP) theft by Chinese firms, with one in five members of the CNBC Global CFO Council surveyed reporting they were hacked within the past year. (The U.S. business television channel CNBC assembled the group of about 100 chief financial officers from top public and private companies).

Accusations of intellectual property thefts have been levied against Chinese firms for at least the past decade. Chinese companies reportedly obtain intellectual property through corporate espionage, cyber attacks and forcing technology transfers, in which the Chinese government compels companies investing in China to provide intellectual property details and licenses, according to Fortune.com.

“Our real issue is forced technology transfers — it’s intellectual property theft, it’s subversive industrial policies that circumvent WTO [World Trade Organization] rules. It’s basically the way the Chinese lie, cheat and steal their way through our economy,” Kyle Bass, founder of the asset management firm Hayman Capital Management, told CNBC.

While 20 percent of the CNBC group surveyed say their intellectual property thefts occurred in the past year, 30 percent of the council members surveyed reported being victim of a Chinese firm hack in the past decade, CNBC reported in March 2019.

“Over the last decade, they’ve stolen U.S. $2-to-U.S. $3 trillion in IP from us. The U.S.’ No. 1 asset, in my view, is our ingenuity, our intellectual property, our ability to innovate,” Bass told CNBC. “That’s our game, and they’re stealing our game from us. It’s really important for this new agreement to be measurable and punishable.”

Protections against intellectual property thefts — use of patents, trade secrets, trademarks and copyrights without permission — continues to generate discussion as U.S. President Donald Trump’s administration works toward a trade deal with China.

“We can compete with anyone in the world, but we must have rule, enforced rules, that make sure market outcomes and not state capitalism and technology theft determine winners,” U.S. Trade Rep. Robert Lighthizer testified to the U.S. House Ways and Means Committee in late February 2019, according to CNBC. “Let me be clear. Much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached.”

The CNBC Global CFO Council represents some of the largest public and private companies in the world, according to CNBC, collectively managing nearly U.S. $5 trillion in market value in a range of sectors.