GOP lawmakers urge DOJ to probe Chinese IP theft from U.S. small businesses

KEY POINTS

• Republican lawmakers are urging Attorney General Merrick Garland to investigate Chinese intellectual property theft from U.S. businesses.
• IP theft burdens small businesses the most, said Mike Gallagher, R-Wis., chair of the House Select Committee on the Chinese Communist Party, and Roger Williams, R-Texas, chair of the House Committee on Small Business.

Rep. Mike Gallagher, center, chair of the House Select Committee on the Chinese Communist Party, speaks at a news conference following a GOP caucus meeting at the Republican National Committee offices in Washington, D.C., on Feb. 28, 2023. He is joined by fellow Republicans Rep. Elise Stefanik, left, and Majority Whip Steve Scalise.

Chip Somodevilla | Getty Images

WASHINGTON — Two top Republican congressmen on Thursday urged the Justice Department to investigate intellectual property theft from American small businesses by Chinese actors.

Chinese IP theft costs the U.S. economy $600 billion a year and has a disproportionate effect on small businesses, Reps. Mike Gallagher of Wisconsin and Roger Williams of Texas wrote in a letter to Attorney General Merrick Garland. The letter was also signed by 24 other Republican lawmakers.

"Ensuring the safety of American small businesses from IP-related crimes is crucial, and we urge the U.S. Department of Justice to utilize all tools and capabilities at its disposal," the lawmakers wrote. Gallagher is chairman of the House Select Committee on the Chinese Communist Party, while Williams chairs the House Committee on Small Business.

Evidence of Chinese IP theft from U.S. businesses dates back several years. The multibillion-dollar economic toll estimate comes from a 2017 report from the National Bureau of Asian Research's Commission on the Theft of American Intellectual Property.

A 2018 analysis of IP theft by the U.S. Trade Representative found that the Chinese government "conducted and supported cyber intrusions into U.S. commercial networks, targeting confidential business information held by U.S. firms."

In 2019, 1 in 5 North American companies on the CNBC Global CFO Council reported IP theft from Chinese companies within the last year.

The House CCP committee is pushing for the DOJ's Task Force on Intellectual Property to prioritize theft scenarios among small businesses, which can cripple those with little means to recoup losses. The lawmakers cited a Fox Business News report describing the theft of a proprietary design from an irrigation company.

Another small business owner had to contend with unauthorized copies of her violin teaching tool on the Chinese market in 2019, according to the letter.

Gallagher and Williams requested an itemized briefing to their respective committees with overviews of current measures to protect IP rights — particularly against China — and details on the DOJ's investigative efforts and counterfeit procedures, by June 30.

The House CCP committee was formed after the GOP regained control of the House following the 2022 midterm elections. It aims to examine threats posed to the U.S. by the Chinese government.