Kudos to Senate Finance Committee leaders for calling on a key governmental agency to produce two detailed reports on Chinese infringement of copyright and other IP rights. Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) wrote Shara Aranoff, Chairman of the U.S. International Trade Commission, on Monday, calling for the reports.

The first, due to the senators November 19th, will outline Chinese IP infringement, including how infringement is driven by China’s innovation policies, and suggest an analytical framework for quantifying harm to the U.S. economy and job creation and preservation. The second report, due May 11, 2011, will survey U.S. IP firms and other sources to determine the full size and scope of Chinese infringement sector by sector, with further quantification of how Chinese innovation policies contribute.

The size and scope of Chinese infringement cannot be understated, and a number of organizations, such as the Business Software Alliance and the Property Rights Alliance, have quantified some of that infringement. Capturing the full picture will be difficult, but it is positive that key senators wish to have as much hard data as they can, as they seek to target a real threat to the U.S. economy and job growth.

Here’s a passage from the letter:

Intellectual property plays a key role in driving innovation, productivity, employment, and growth in the U.S. economy. The U.S. Department of Commerce reports that intellectual property accounts for more than half of all U.S. exports, and helps drive 40 percent of our economic growth. In 2008, for example, U.S. receipts of royalties and license fees from other countries yielded a $75 billion trade surplus.

Infringement of U.S. IPR around the globe threatens American jobs. IPR infringement, both in the physical world and online, is estimated to cost U.S. companies billions of dollars per year in lost revenues in China alone. More than 80 percent of IPR-infringing goods seized at the U.S. border are of Chinese origin. And troubling recent developments in China, including China’s “indigenous innovation” procurement policies, may exacerbate these losses by limiting the ability of U.S. innovative companies to participate in the Chinese market.

Baucus emphasized the critical importance of these studies to U.S. economic well-being:

American workers, the American economy and American businesses are suffering because of China’s failure to curb the rampant theft of American intellectual property. China needs to step up to the plate, live up to its international obligations and protect and enforce U.S. intellectual property rights. The report we commissioned will quantify the effect of China’s intellectual property rights infringement on America’s competitiveness and will shed light on what we can do to better protect U.S. innovation in China — and create good-paying jobs here at home.

Grassley highlighted the role China’s trade practices play in IP infringement:

We need to do more to crack down on China’s manipulative trade policies. China is using its ‘indigenous innovation’ program to discriminate against U.S. products in the Chinese market. And, rampant infringement of intellectual property rights costs the United States billions of dollars each year. These reports will shed light on the problem and help us solve it. A solution is important to businesses in Iowa and across the United States.

The senators plan to make each report public, so mark your calendars now.

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This entry was posted on Tuesday, April 20th, 2010 at 5:07 pm by Patrick Ross and is filed under capitol hill, counterfeit, international, piracy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.