U.S. Says China Must Do More to Protect Intellectual Property

WASHINGTON—The U.S. faulted China on Friday for lax protection of intellectual property, saying that measures Beijing adopted—some to comply with the 2020 U.S.-China trade deal—don’t go far enough.

In an annual report on intellectual-property protections, the Office of the U.S. Trade Representative acknowledged that China amended its patent, copyright and criminal laws in 2020 but said “these steps toward reform require effective implementation and also fall short of the full range of fundamental changes needed to improve the IP landscape in China.”

The Biden administration’s approach to China is still officially under review, but officials have made clear that they intend to continue or step up many of the Trump administration’s critiques of the world’s second-largest economy.

In an address to Congress this week, President Biden said he will continue to “stand up to unfair trade practices that undercut American workers and American industries, like subsidies to state-owned enterprises and the theft of American technology and intellectual property.”

The protection of U.S. intellectual property was one of the key motivators behind the Trump administration’s trade war against China, resulting in the imposition of tariffs on most Chinese goods that still remain in place. That trade war was brought to a truce by a deal, signed in January of 2020, in which China committed to legal changes.

China has implemented reforms such as increasing the criminal penalties for intellectual-property crimes, increasing penalties for intentional infringement and requiring companies accused of IP-theft to turn over more records to the courts. A copyright law taking effect in June expands the types of works that have protection, creates new rights for public performances and audio recordings, and seeks to crack down on pirated goods and materials.

In its report Friday, the USTR said that those doing business in China had reported “some improvements to IP enforcement but uncertainty about the effectiveness of certain law changes” and said that “longstanding problems such as bad-faith trademarks and counterfeiting persist.”

The USTR also faulted China for new cybersecurity laws that it said were being abused to force companies to share intellectual property.

Recent cybersecurity laws have taken “multiple steps backward through China’s efforts to invoke cybersecurity as a pretext” to require companies to turn over sensitive intellectual property, or as a pretext to block companies from the market.

President Biden signed dozens of executive orders in his first few weeks in office, but his administration has moved slowly on trade. WSJ’s Gerald F. Seib explains why. Photo illustration: Laura Kammermann

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com

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Source: WSJ – US News

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