The Honorable Merrick B. Garland, Attorney General, U.S. Department of Justice (June 15, 2023)

Summary

Letter dated June 15, 2023, to The Honorable Merrick B. Garland, Attorney General, from the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party and the Committee on Small Business, expressing deep concern about the pervasive threat of Chinese intellectual property (IP) theft. It states that the Commission on the Theft of American Intellectual Property found that Chinese IP theft costs the United States economy $600 billion annually. It requests a briefing for committee staff as soon as possible but no later than June 30, 2023, on topics including implementation of the Protect American IP Act of 2022. The signature block names Mike Gallagher, Chairman, Select Committee on China, and Roger Williams, Chairman, Committee on Small Business.

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                                                   June 15, 2023

The Honorable Merrick B. Garland
Attorney General
U.S. Department of Justice
950 Pennsylvania Ave. NW
Washington, D.C. 20520

Dear Attorney General Garland,

         The Select Committee on the Strategic Competition between the United States and the
Chinese Communist Party and Committee on Small Business (Committees) are deeply
concerned about the pervasive threat of Chinese intellectual property (IP) theft and its impact on
American small businesses—the backbone of our economy. Small businesses play a crucial role
in driving American innovation and advancing our economic and national security interests.
Ensuring the safety of American small businesses from IP-related crimes is crucial, and we urge
the U.S. Department of Justice (Department) to utilize all tools and capabilities at its disposal.
Therefore, we respectfully request information regarding the Department's efforts in addressing
this critical matter.

        In 2018, the United States Trade Representative (USTR) published a report on China’s
policies and practices related to IP theft, finding that “the Chinese government directs and
unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets by
Chinese entities, to obtain cutting-edge technologies and intellectual property… in industries
deemed important by state industrial plans.”1 Furthermore—according to USTR—China’s
actions are not aligned with the standards followed by both domestic and international
communities.2

        The Commission on the Theft of American Intellectual Property found that Chinese IP
theft costs the United States economy $600 billion annually and has a major effect on American
small businesses.3 Indeed, there have been numerous instances of Chinese theft of intellectual
property from small American businesses. In one instance, a Chinese company stole the
1
  Findings of the Investigation into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual
Property, and Innovation Under Section 301 of the Trade Act of 1974, OFFICE OF THE U.S. TRADE REP. (Mar. 22,
2018) available at www.ustr.gov/sites/default/files/Section%20301%20FINAL.PDF.
2
  Id.
3
  The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy, THE IP
COMMISSION (2017) available at www.nbr.org/wpcontent/uploads/pdfs/publications/IP_Commission_Report_
Update.pdf.
proprietary design of a small irrigation company and started selling it to American consumers
through online channels.4 Another case that illustrates the harsh reality faced by small businesses
is that of Ruth Brons.5 Despite spending over $100,000 to patent her invention—a learning tool
for violin students—in multiple countries, counterfeit versions of her product began being sold
on Chinese e-commerce markets. Indeed, the Chinese counterfeiters simply copied her patents
and registered them in China.

        These examples are a clear violation of intellectual property rights and must be
addressed. Appropriate measures must be taken to hold guilty parties accountable for their
actions. Chaired by the Deputy Attorney General, the Department has a Task Force on
Intellectual Property that “is part of a Department-wide initiative to confront the growing number
of domestic and international intellectual property crimes” and “works to identify and implement
a multi-faceted strategy with our federal, state, and international partners to effectively combat
this type of crime.”6 However, it remains unclear as to how many Chinese entities are held
accountable for their illegal activities.

       Given the seriousness of this issue, we respectfully request that the Department provide
relevant staff of the Committees with a briefing as soon as possible but no later than June 30,
2023, regarding the following topics:

    1. An overview of the current measures and initiatives by the Department to assist small
       businesses in protecting their IP rights, particularly in relation to China;

    2. An overview of the current measures and initiatives by the Department to investigate IP
       theft and hold those guilty parties accountable, particularly in relation to China;

    3. An overview of the implementation of the Protect American IP Act of 2022;

    4. Detailed plans for strengthening and enhancing the Department’s investigative efforts to
       ensure effective protection against IP theft;

    5. Information about the Department’s collaborations or partnerships with state and local
       governments to investigate cases of IP theft; and

    6. Details regarding how the Department plans to address the issue of counterfeit products,
       like those experienced by Ms. Brons.

       The House Select Committee on the Strategic Competition between the United States and
the Chinese Communist Party has broad authority to “investigate and submit policy
recommendations on the status of the Chinese Communist Party’s economic, technological, and

4
  China’s theft of U.S. intellectual property is hurting small businesses: The IP Commission, FOX NEWS (Mar. 23,
2018) available at www.foxbusiness.com/markets/chinas-theft-of-u-s-intellectual-property-is-hurting-small-
businesses-the-ip-commission.
5
  Spencer Kimball, US small businesses are fighting an uphill battle against counterfeiters in China: ‘it’s like
whack-a-mole’, CNBC (Oct. 6, 2019) available at www.cnbc.com/2019/10/06/how-us-small-businesses-are-
fighting-counterfeiting-in-china.html.
6
  Intellectual Property Task Force, U.S. DEP’T OF JUSTICE (2023) available at www.justice.gov/archives/iptf.
security progress and its competition with the United States” under H. Res. 11. The Committee
on Small Business has broad authority to investigate “problems of all types of small business”
under House Rule X.

     To make arrangements to deliver a response or ask any questions, please contact Select
Committee staff at (202) 308-8977 and Small Business Committee staff at (202) 225-5821.

       Thank you for your attention to this important matter and prompt reply.

                                           Sincerely,




____________________________                       ____________________________
Mike Gallagher                                     Roger Williams
Chairman                                           Chairman
Select Committee on China                          Committee on Small Business



____________________________                       ____________________________
Blaine Luetkemeyer                                 Dan Newhouse
Vice Chairman                                      Member of Congress
Committee on Small Business



____________________________                       ____________________________
Pete Stauber                                       Rob Wittman
Member of Congress                                 Member of Congress



____________________________                       ____________________________
Dan Meuser                                         Andy Barr
Member of Congress                                 Member of Congress



____________________________                       ____________________________
Beth Van Duyne                                     John Moolenaar
Member of Congress                                 Member of Congress
____________________________   ____________________________
Maria Salazar                  Darin LaHood
Member of Congress             Member of Congress



____________________________   ____________________________
Tracey Mann                    Neal P. Dunn, M.D.
Member of Congress             Member of Congress




____________________________   ____________________________
Jake Ellzey                    Jim Banks
Member of Congress             Member of Congress



____________________________   ____________________________
Marc Molinaro                  Dusty Johnson
Member of Congress             Member of Congress



____________________________   ____________________________
Mark Alford                    Michelle Steel
Member of Congress             Member of Congress




____________________________   ____________________________
Eli Crane                      Ashley Hinson
Member of Congress             Member of Congress
____________________________   ____________________________
Aaron Bean                     Carlos Gimenez
Member of Congress             Member of Congress




____________________________   ____________________________
Wesley Hunt                    Nick LaLota
Member of Congress             Member of Congress


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