Communist China is now flexing its muscles in a new way that threatens our economy, our jobs, and our unique American system that protects the property rights of inventors and innovators. The buzz word is "indigenous innovation." China has issued new anti-American trade rules that prohibit imports of U.S. products unless they are based on intellectual property that is developed and/or owned in China, with its associated trademarks originally registered in China.
This means that U.S. products cannot be sold in China unless the U.S. companies give China their current patents plus their research and development of new products. This new rule targets our most innovative manufacturing and service industries, including computers, software, and telecommunications. The Chinese government has issued a catalogue of products that are subject to this obnoxious rule, and the list is expected to be expanded soon to other industries. China's "indigenous innovation" rule will exclude many major U.S. firms from the Chinese market or require them to give China their patents and advanced technology.
Chinese Judge Yongshun Cheng, who was deputy director of the Intellectual Property Division of Beijing High People's Court, stated bluntly that the U.S. patent bill now pending in Congress is bad news for American innovation and good news for foreign infringers. He pointed out that the bill "is friendlier to the infringers than to the patentees as it will make the patent less reliable, easier to be challenged, and cheaper to be infringed."
Nineteen U.S. trade associations, including the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Business Roundtable, signed a joint letter to six Obama Administration agencies calling China's behavior "alarming." The letter warns that the "indigenous innovation" rule poses "an immediate danger to U.S. companies" and to their "ability to create jobs here at home."
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