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Intellectual Property Protection and Open Academic Exchange: Striking the Proper Balance
By Julianne Fittipaldi
'New Perspectives on Asia' highlights the research of junior CSIS staff and interns on issues that are quietly shaping the world's most dynamic region.
National security is becoming increasingly dependent upon the dominance of a handful of advanced or emerging technologies. As a result, technological competition has become a major arena in which the world’s two largest geopolitical competitors, the United States and China, are vying for superiority. Both countries aim to lead in the most cutting-edge technologies such as semiconductors, quantum computing, and artificial intelligence (AI).
Those viewing technological development through the lens of geopolitical competition between the United States and China believe that the success of one country in mastering these technologies means failure for the other. For the United States, Chinese dominance in emerging technologies represents dangerous leverage in the race for geopolitical influence and more secure supply chains. Similarly, China views U.S. attempts to undercut its advances in critical technologies as an attack upon its economic development and strategic capabilities. Consequently, both China and the United States have, in recent years, taken steps to enhance their intellectual property (IP) protections and prevent foreign espionage.
In 2021, China unveiled counter-espionage regulations that strengthened supervision of vulnerable firms and required education on preventing espionage of IP. The United States has also taken an increased focus on preventing espionage, including initiatives to curb IP theft and educate companies on insider threats. However, in practice, such efforts in the United States have chilled academic sentiment and even veered towards racial profiling.
The competitiveness and innovative capacity of the United States hinges on its openness and ability to attract the best talent from around the globe. At the same time, the United States is concerned about the security of its intellectual property. This tradeoff between an open, innovative ecosystem and robust intellectual property security is one the United States government has thus far had difficulty navigating. This is a delicate balance. While critical technology has important national security implications, an overly aggressive enforcement system has the potential to suppress innovation— the exact opposite of what the United States wants if it aims to be a leader for cutting-edge technologies. More so, unfounded accusations of espionage may end in an acquittal but not before ruining the livelihood of the accused.
The Challenge
In January, the Director of the Federal Bureau of Investigations (FBI), Christopher Wray, highlighted China as the broadest threat to the United States’ economic security and innovation. Part of this perception is based on China’s own policies, some of which are seen in the United States as inherent security threats. China’s data and security laws, for example, mandate its citizens and businesses furnish information to the government on request, regardless of proprietary or non-disclosure agreements (NDAs) that require confidentiality in the United States.
China’s espionage activities are broad in scope and targeted at acquiring sensitive IP. In a survey of 160 instances of publicly reported Chinese espionage, 26 percent of cases were conducted by individuals not Chinese in nationality— usually U.S. citizens. This includes transgressions completed unwittingly. Officials from the Chinese Ministry of State Security (MSS) have been known to coerce information unknowingly from former U.S. government officials or academics by posing as job recruiters through LinkedIn or other social media platforms. Less subversively, China uses talent programs to incentivize scientists studying abroad to bring their knowledge— and potentially corporate or government secrets — to China. Once intelligence is gathered or new technologies are discovered, China has asymmetric capabilities in sharing that IP with its other state-run enterprises.
The U.S. Strategy for Countering Nation-State Threats
China’s expansive toolkit for intelligence gathering and sharing necessitates a nuanced approach from the United States government and private sector to counter such threats. In 2018, the DOJ’s National Security Division (NSD) launched its China Initiative. The goals of the initiative were broadly rooted in strengthening the monitoring and enforcement of IP violations conducted through espionage, including in “non-traditional” sectors such as academia. It was in these non-traditional sectors that the initiative appeared to concentrate less on espionage and more on minor infractions by academics relating to grant or visa fraud. Many such cases charged under the auspices of the program would be later dismissed for lack of sufficient evidence. The cases were also found to be disproportionately aimed at individuals of Chinese ethnicity, regardless of citizenship. Unfortunately, this is not the first instance where U.S. government security initiatives mutated into racial profiling practices. A 2021 Senate report found that a security office within the Department of Commerce used unauthorized tactics to investigate employees of Chinese and Middle Eastern descent, even in absence of reasonable suspicion. Appropriately, the Commerce Department accepted the report’s findings and disbanded the office.
Responding to accusations of intolerance and bias, the China Initiative was abandoned in February of this year—at least in name. Instead, the NSD’s “Strategy for Countering Nation-State Threats” will take a broader approach. Under the updated strategy, the NSD and FBI will be more closely involved in evaluating the materiality of accusations as a threat to national or economic security. Aside from what is intended to be a higher standard for prosecution, it remains to be seen how this new strategy will differ from the China Initiative in practice. While the strategy will include a focus on threats from other hostile nations, including Russia, Iran, and North Korea, the former initiative has already propagated increasing racism against Asian Americans. Even if the new strategy creates a material shift in the types of cases prosecuted, it may just be profiling expanded to include Russians, Iranians, and Koreans.
Since the announcement of the Strategy for Countering Nation-State Threats in February, two trials for cases launched under the China Initiative have concluded. While the new strategy aims to shift focus away from grant fraud, Feng Tao— a chemistry professor arrested just months after the launch of the China Initiative for failing to disclose ties to Chinese affiliations in grant applications— was found guilty by a federal jury in April 2022. The following month, Mingqing Xiao, charged with allegations similar to those of Tao, was cleared of charges of grant fraud but instead found guilty on tax charges.
These cases have not gone unnoticed by Chinese academics studying in the United States. In a March 2022 survey conducted by the Asian American Scholar Forum, 64 percent of faculty reported feeling unsafe as Chinese-origin researchers, and 67 perfect reported that they were considering leaving the United States. At present, it is estimated that 37 percent of all foreign STEM graduate students in the United States are of Chinese nationality, accounting for 16 percent of total STEM students at U.S. institutions. Asian students and researchers have already witnessed increasing anti-Asian violence following the outbreak of the pandemic. In conjunction with a justice system that seems to target Chinese researchers, this vital talent base may soon choose to relocate to institutions in countries such as Australia or Canada. Real tests remain to prove how the evolving U.S. IP security environment will counter harmful stereotypes and insulate the foreign researchers that have contributed to the innovative capacity of the United States.
Looking Forward
The collaboration between bright minds from around the world is what has afforded the United States the level of innovation it currently enjoys. The failure of the China Initiative to target genuine vulnerabilities in our IP security system has instead promoted apprehension among researchers previously interested in international collaborations. A credible intellectual property security framework should prosecute IP theft but also allow the cultivation of an open and innovative ecosystem to the highest extent possible without sacrificing security.
The U.S. Strategy for Countering Nation-State Threats has the opportunity to reverse the course. Certainly, renaming and refocusing the strategy was a first step. Thus far, policymakers have failed to define an appropriate intellectual property protection framework within the context of a tactical and narrow national security definition. In forming its strategy, the DOJ and other governmental departments should consider how to tightly define what constitutes a national security threat; doing so could prevent baseless investigations of researchers and provide assurance to the academic community. In conjunction with clear guidelines, the NSD should uphold its commitment to enforce a higher standard of intent and materiality for cases. This was a key deficiency of the China Initiative.
Just as the strategy was renamed and national security must be defined, the rhetoric behind IP protection and foreign espionage threats must too be refocused. Too often, government language when discussing security broadly otherizes China. The government should take initiative to celebrate and preserve the contributions of immigrants to American innovation. A successful IP security framework will complement and coincide with this foundation.
Julianne Fittipaldi is a research intern with the Economics Program at the Center for Strategic and International Studies in Washington, D.C.
'New Perspectives on Asia' is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
'New Perspectives on Asia' highlights the research of junior CSIS staff and interns on issues that are quietly shaping the world's most dynamic region.
National security is becoming increasingly dependent upon the dominance of a handful of advanced or emerging technologies. As a result, technological competition has become a major arena in which the world’s two largest geopolitical competitors, the United States and China, are vying for superiority. Both countries aim to lead in the most cutting-edge technologies such as semiconductors, quantum computing, and artificial intelligence (AI).
Those viewing technological development through the lens of geopolitical competition between the United States and China believe that the success of one country in mastering these technologies means failure for the other. For the United States, Chinese dominance in emerging technologies represents dangerous leverage in the race for geopolitical influence and more secure supply chains. Similarly, China views U.S. attempts to undercut its advances in critical technologies as an attack upon its economic development and strategic capabilities. Consequently, both China and the United States have, in recent years, taken steps to enhance their intellectual property (IP) protections and prevent foreign espionage.
In 2021, China unveiled counter-espionage regulations that strengthened supervision of vulnerable firms and required education on preventing espionage of IP. The United States has also taken an increased focus on preventing espionage, including initiatives to curb IP theft and educate companies on insider threats. However, in practice, such efforts in the United States have chilled academic sentiment and even veered towards racial profiling.
The competitiveness and innovative capacity of the United States hinges on its openness and ability to attract the best talent from around the globe. At the same time, the United States is concerned about the security of its intellectual property. This tradeoff between an open, innovative ecosystem and robust intellectual property security is one the United States government has thus far had difficulty navigating. This is a delicate balance. While critical technology has important national security implications, an overly aggressive enforcement system has the potential to suppress innovation— the exact opposite of what the United States wants if it aims to be a leader for cutting-edge technologies. More so, unfounded accusations of espionage may end in an acquittal but not before ruining the livelihood of the accused.
The Challenge
In January, the Director of the Federal Bureau of Investigations (FBI), Christopher Wray, highlighted China as the broadest threat to the United States’ economic security and innovation. Part of this perception is based on China’s own policies, some of which are seen in the United States as inherent security threats. China’s data and security laws, for example, mandate its citizens and businesses furnish information to the government on request, regardless of proprietary or non-disclosure agreements (NDAs) that require confidentiality in the United States.
China’s espionage activities are broad in scope and targeted at acquiring sensitive IP. In a survey of 160 instances of publicly reported Chinese espionage, 26 percent of cases were conducted by individuals not Chinese in nationality— usually U.S. citizens. This includes transgressions completed unwittingly. Officials from the Chinese Ministry of State Security (MSS) have been known to coerce information unknowingly from former U.S. government officials or academics by posing as job recruiters through LinkedIn or other social media platforms. Less subversively, China uses talent programs to incentivize scientists studying abroad to bring their knowledge— and potentially corporate or government secrets — to China. Once intelligence is gathered or new technologies are discovered, China has asymmetric capabilities in sharing that IP with its other state-run enterprises.
The U.S. Strategy for Countering Nation-State Threats
China’s expansive toolkit for intelligence gathering and sharing necessitates a nuanced approach from the United States government and private sector to counter such threats. In 2018, the DOJ’s National Security Division (NSD) launched its China Initiative. The goals of the initiative were broadly rooted in strengthening the monitoring and enforcement of IP violations conducted through espionage, including in “non-traditional” sectors such as academia. It was in these non-traditional sectors that the initiative appeared to concentrate less on espionage and more on minor infractions by academics relating to grant or visa fraud. Many such cases charged under the auspices of the program would be later dismissed for lack of sufficient evidence. The cases were also found to be disproportionately aimed at individuals of Chinese ethnicity, regardless of citizenship. Unfortunately, this is not the first instance where U.S. government security initiatives mutated into racial profiling practices. A 2021 Senate report found that a security office within the Department of Commerce used unauthorized tactics to investigate employees of Chinese and Middle Eastern descent, even in absence of reasonable suspicion. Appropriately, the Commerce Department accepted the report’s findings and disbanded the office.
Responding to accusations of intolerance and bias, the China Initiative was abandoned in February of this year—at least in name. Instead, the NSD’s “Strategy for Countering Nation-State Threats” will take a broader approach. Under the updated strategy, the NSD and FBI will be more closely involved in evaluating the materiality of accusations as a threat to national or economic security. Aside from what is intended to be a higher standard for prosecution, it remains to be seen how this new strategy will differ from the China Initiative in practice. While the strategy will include a focus on threats from other hostile nations, including Russia, Iran, and North Korea, the former initiative has already propagated increasing racism against Asian Americans. Even if the new strategy creates a material shift in the types of cases prosecuted, it may just be profiling expanded to include Russians, Iranians, and Koreans.
Since the announcement of the Strategy for Countering Nation-State Threats in February, two trials for cases launched under the China Initiative have concluded. While the new strategy aims to shift focus away from grant fraud, Feng Tao— a chemistry professor arrested just months after the launch of the China Initiative for failing to disclose ties to Chinese affiliations in grant applications— was found guilty by a federal jury in April 2022. The following month, Mingqing Xiao, charged with allegations similar to those of Tao, was cleared of charges of grant fraud but instead found guilty on tax charges.
These cases have not gone unnoticed by Chinese academics studying in the United States. In a March 2022 survey conducted by the Asian American Scholar Forum, 64 percent of faculty reported feeling unsafe as Chinese-origin researchers, and 67 perfect reported that they were considering leaving the United States. At present, it is estimated that 37 percent of all foreign STEM graduate students in the United States are of Chinese nationality, accounting for 16 percent of total STEM students at U.S. institutions. Asian students and researchers have already witnessed increasing anti-Asian violence following the outbreak of the pandemic. In conjunction with a justice system that seems to target Chinese researchers, this vital talent base may soon choose to relocate to institutions in countries such as Australia or Canada. Real tests remain to prove how the evolving U.S. IP security environment will counter harmful stereotypes and insulate the foreign researchers that have contributed to the innovative capacity of the United States.
Looking Forward
The collaboration between bright minds from around the world is what has afforded the United States the level of innovation it currently enjoys. The failure of the China Initiative to target genuine vulnerabilities in our IP security system has instead promoted apprehension among researchers previously interested in international collaborations. A credible intellectual property security framework should prosecute IP theft but also allow the cultivation of an open and innovative ecosystem to the highest extent possible without sacrificing security.
The U.S. Strategy for Countering Nation-State Threats has the opportunity to reverse the course. Certainly, renaming and refocusing the strategy was a first step. Thus far, policymakers have failed to define an appropriate intellectual property protection framework within the context of a tactical and narrow national security definition. In forming its strategy, the DOJ and other governmental departments should consider how to tightly define what constitutes a national security threat; doing so could prevent baseless investigations of researchers and provide assurance to the academic community. In conjunction with clear guidelines, the NSD should uphold its commitment to enforce a higher standard of intent and materiality for cases. This was a key deficiency of the China Initiative.
Just as the strategy was renamed and national security must be defined, the rhetoric behind IP protection and foreign espionage threats must too be refocused. Too often, government language when discussing security broadly otherizes China. The government should take initiative to celebrate and preserve the contributions of immigrants to American innovation. A successful IP security framework will complement and coincide with this foundation.
Julianne Fittipaldi is a research intern with the Economics Program at the Center for Strategic and International Studies in Washington, D.C.
'New Perspectives on Asia' is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).