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US Intensifies Crackdown on China Intellectual Property Theft

FILE - A May 14, 2013 file photo shows the Department of Justice headquarters building in Washington. The Justice Department has reached a $134,000 settlement with a New York woman after federal drug agents used information from her cellphone to set up a…
FILE - A May 14, 2013 file photo shows the Department of Justice headquarters building in Washington. The Justice Department has reached a $134,000 settlement with a New York woman after federal drug agents used information from her cellphone to set up a…

The U.S. Justice Department is aggressively forging ahead with a clampdown on Chinese economic espionage even as the coronavirus pandemic has shuttered much of the country's criminal justice system.

In recent days, the Justice Department has obtained a guilty plea from a former Atlanta-based university professor and has charged two others in connection with their work for China’s talent recruitment programs.

The charges came as the FBI and the Department of Homeland Security warned this week that hackers tied to the Chinese government are attempting to steal U.S. research related to coronavirus vaccines, treatments and testing.

While the coronavirus pandemic has shut down federal courts and forced most federal employees to telework, law enforcement officials say the work of combating Chinese intellectual property theft — as well as other investigations — continues, with more cases likely to be announced in the coming months.

“The Department of Justice remains vigilant over programs such as the Thousand Talents Program that recruits professors and researchers to work for China,” said Assistant Attorney General for National Security John C. Demers.

The Thousand Talents Program is the best known of more than 200 Chinese recruitment plans that target U.S. and other foreign academics and researchers to work in China.

Chinese officials have made no secret about what they aim to accomplish through these programs: access to critical intellectual property. But the U.S. says the programs have a nefarious purpose: stealing U.S. technology and trade secrets.

While the three cases announced this week do not allege outright intellectual property theft, they involve researchers at American institutions who hid their work for the Chinese, raising the risk of unauthorized intellectual property transfer.

Arkansas professor

Last Friday, Simon Saw-Teong Ang, an electrical engineering professor at the University of Arkansas, was arrested for failing to disclose his ties to the Chinese government and Chinese businesses in a grant application to NASA. The university suspended Ang after his arrest.

Also last Friday, Dr. Xiao-Jiang Li, a former professor at Emory University, was sentenced to one year of probation in connection with his work with the Thousand Talents Program, which he hid from the federal government.

Then on Wednesday, Dr. Qing Wang, a former researcher at the prestigious Cleveland Clinic, was arrested on fraud charges for failing to disclose in a $3.6 million grant application to the National Institutes of Health that he received money for conducting similar research in China. The clinic said it had fired the professor.

"We're hearing about some of these more high-profile investigations, mainly for the deterrent value so that China and Chinese state actors are aware that the U.S. is continuing to monitor this kind of activity," said Paul Chan, the managing principal at the Bird Marella law firm in Los Angeles.

Chan said the three cases underscore U.S. law enforcement agencies’ growing focus on academia as a target of Chinese intellectual property theft.

“One of the ways in which China historically has sought to obtain intellectual property from the United States is through academic research institutions,” Chan said.

'Principal IP infringer'

According to the Commission on the Theft of American Intellectual Property, intellectual property theft costs the U.S. economy hundreds of billions of dollars annually, and China is “the world’s principal IP infringer.”

Chan said China’s use of nontraditional actors such as students and scholars makes it particularly challenging for law enforcement to combat theft of trade secrets.

“They successfully recruit a fair number of laypeople, academics, professors or students who might not start out necessarily working for the Chinese government, but are eventually recruited and encouraged and incentivized to become a conduit,” Chan said.

Under the Trump administration, the Justice Department has increased its focus on combating Chinese economic espionage.

In 2018, the department launched a "China Initiative" with the aim of prioritizing Chinese espionage cases. Since then the department has announced charges in nearly 24 economic espionage and intellectual property theft cases.

In February, FBI Director Christopher Wray said his agency was conducting about 1,000 investigations into suspected Chinese theft of U.S. technology involving every sector of the U.S. economy.

The investigations are time-consuming – sometimes they can take years – but they've led to notable prosecutions in recent months.

In January, Charles Lieber, a prominent Harvard University professor, was arrested on charges of lying about receiving research funding from the Chinese government. In March, a former West Virginia University professor pleaded guilty to fraud charges in connection with working for China’s Thousand Talents Program.

The China Initiative has also involved an aggressive outreach campaign, with federal prosecutors and FBI agents regularly meeting with academia and the private sector about the threat of Chinese espionage.

"The U.S. is worried about the leakage of intellectual property," said Dean Cheng, a senior fellow for Chinese political and security affairs at the Heritage Foundation. "The bigger issue here with these professors is that by not declaring that they are taking Chinese money, to what extent is this allowing the flow of intellectual property to China?"