The First “State Sponsor of Mass IP Theft”: China, Sovereign Immunity, and Upholding Americans’ Intellectual Property Rights

Abstract

The government of China has long orchestrated a massive campaign to steal intellectual property (IP) from Americans, but few victims have been able to seek redress through civil litigation. A key reason is that U.S. law does not recognize a foreign government’s vicarious liability for such thefts. Even when liability can be established, China’s government has sovereign immunity from the jurisdiction of U.S. courts. This Note proposes a new legislative framework, including amendments to the Foreign Sovereign Immunities Act (FSIA), that would allow Americans to sue the Chinese government and to collect Chinese state assets as damages for thefts of IP perpetrated for its benefit.
This Note suggests two legislative steps: First, creating a new category—“state sponsors of mass IP theft”—modeled on the State Department’s state-sponsor-of-terrorism list, and designating China under it; second, amending the FSIA to: i) deny sovereign immunity to designated state sponsors of mass IP theft in suits under federal and state laws protecting trade secrets, trademarks, patents, and copyrights; ii) provide a federal private right of action that resets the statutes of limitations for those claims and that recognizes the state sponsor’s liability for the actions of its agents—including spies and military operatives, government regulators, state-owned enterprises, nominally private companies under the control of the Chinese Communist Party, participants in talent recruitment programs, and non-traditional collectors; and, iii) permit the successful plaintiffs to enforce judgments by attaching the property of either the foreign state or its state companies.

Keywords: Foreign Sovereign Immunity, Intellectual Property, IP Theft, National Security, Legislation, Foreign Sovereign Immunities Act, China