Thanks to COVID-19, U.S.-China relations are probably at their lowest point in half a century. However, most people don’t realize the relationship between the two superpowers began to sour long before anyone got sick.
China’s unfair trade practices have driven a wedge between the two countries. They are making billions by forcing U.S. companies to turn over valuable intellectual property to the government in exchange for access to the country’s billions of potential customers.
The sad reality is most American businesses are waiting, hoping for relief — whether from our leaders of international trade organizations, which include the Chinese.
When Trump and other policymakers talk about bad trade deals, they usually doesn’t mention the World Trade Organization, the U.S. International Trade Commission, and other multi-national or U.S. governmental bodies that are supposed to referee disputes. Maybe they should, so that what happens — or more importantly what doesn’t — can get the scrutiny it needs.
Changes are needed. The ITC, for example, continues to show itself to be toothless when it comes to confronting the non-practicing business entities known as “patent trolls” created to make the potentially lucrative charge that others have infringed on their intellectual property rights.
Patent trolls are a danger to economic growth and to consumers. Their existence is a hindrance to innovation, and their activities lead to higher prices on consumer technology and other goods now considered critical to life in the 21st century. Yet the ITC refuses to crack down on them, leaving China in an advantageous position.
The ITC is currently considering claims lodged by Neodron, an Irish troll claiming its patents were infringed upon by major global tech companies, including Apple, Microsoft and Dell. The company has asked the ITC to grant an exclusion order that would bar these leading innovators from selling all their major touchscreen mobile devices in the U.S. market.
If Neodron prevails, the cost of smartphones, tablets, computers and other devices affected would immediately skyrocket. Alternatively, these devices might no longer be sold in the U.S. According to some estimates, nearly 90% of smartphones and tablets currently available in the U.S. market would disappear, replaced by devices from China.
China already has a clear lead in developing and deploying 5G wireless devices and Huawei is on pace to overtake both Apple and Samsung in 5G smartphone production sometime this year. Chinese companies are expected to occupy four of the top six spots, ranked by production volume, of 5G smartphone brands.
Given the critical technology race between the U.S. and China over who will dominate in 5G, how can a U.S. agency even consider a litigation outcome that forces American consumers to buy their 5G and their touchscreen devices only from China?
This troll’s actions would create great expense for U.S. companies and consumers; even worse, they would lead to the creation of a Chinese monopoly on these products in the U.S. market at serious costs to our national security and technology future.
Neodron’s effort before the ITC places a gratuitous and unwelcome thumb on the scale that benefits the Chinese. If successful, its claims would devastate the U.S. tech sector to China’s benefit. And remember these are companies who already must hand over to Beijing whatever information its security apparatus demands.
Like all patent trolls, Neodron’s claim cannot justify this kind of disproportionate and devastating result.
The ITC doesn’t have to go along with this. They can institute policy revisions that will thwart the efforts of Neodron and other patent trolls like them to use the ITC for monetary gain. Those changes should be made now before any more damage is done. There are bigger fish to fry.