North Florida Congressional Members Hold Hearing on Chinese Theft of American Know-how

Aug 31, 2017

A Congressional hearing on the theft of American intellectual property by the Chinese took place yesterday (Wednesday), not in Washington, D.C., but in Tallahassee, Florida. Two House members from Northwest Florida took testimony from two experts and one victim.

Panel members (l. to r.): Dean Minardi of Bing Energy; Dr. Derek Scissors from the American Enterprise Institute; Dean Cheng from The Heritage Foundation; Florida State Representative Lorrane Ausley (D-Tallahassee); Congressman Neal Dunn (R-2nd District); and Congressman Matt Gaetz (R-1st District).
Credit Tom Flanigan

The House Member hosting the hearing was Republican Matt Gaetz from Florida’s First Congressional District. In his opening remarks, he described one way the Chinese steal intellectual property developed in the United States.

“The Chinese government is known for using their military’s cyber capabilities to hack into private U.S. tech firms. They steal I.P. and then transfer the technology to state-run companies for profit off of its development,” he said.

Gaetz’s colleague from the neighboring Second Congressional District, Republican Neal Dunn, said he was also eager to learn how America’s intellectual property might better be safeguarded from Chinese purloining.

“Chinese government does not play by the same trade rules as the rest of the world. They literally require companies to turn over I.P. in return for access to their markets.” Dunn noted.

And sometimes the Chinese simply transfer an entire American company, lock, stock and barrel, to China. At least, that’s what Tallahassee’s Dean Minardi said happened to his company Bing Energy that he claimed was seized by a number of former co-workers led by former Chairman and CEO Yung Chen, born in China but now an American citizen.

“Orchestrating a bail-out deal that would give the Chinese entity control, this group of naturalized United States citizens effectively stole the intellectual property of Bing Energy and handed it to a company that Bing could not control,” Minardi explained.

And the rip-offs can even be a single creative expression. Tallahassee State Representative Lorrane Ausley, a Democrat whose day-job legal work often involves property rights, told the story of Capital City Sculptor Sandy Proctor. One of his most famous pieces is the large statue of Florida Heisman Trophy Quarterback Danny Wuerffel in Gainesville.

“Well, Sandy’s walking through the aisles of Hobby Lobby and he sees a miniature of that exact sculpture that he was commissioned to do made in China and sold for a couple dollars,” Ausley recalled.

Can anything be done? On the hearing panel was the American Enterprise Institute’s Dr. Derek Scissors. He suggested the U.S. Government create a black list of those Chinese firms that steal technology and intellectual property, then lock their products out of the American economy until they promise to change their ways and then keep an eye on them to make sure they do.

“We have to gather evidence about who’s really responsible. You don’t want to punish people who didn’t do anything. That doesn’t help anyone. People who are guilty are still going to act. And now the people who were not guilty who got punished will say, ‘Why shouldn’t we steal too? We just got punished anyway,’” Scissors said.

The Heritage Foundation’s Dean Cheng also had some ideas at the government level. But he also had some private sector solutions to prevent intellectual property theft.

“If you’re going to go to China to negotiate business, maybe you shouldn’t bring your personal laptop, which includes the prototype files and your e-mail correspondence with your design engineers and people laugh when I say this, but I’ve talked to folks who have done exactly that.”

It seemed the congressional delegation from Northwest Florida already appreciates the urgency of addressing the Chinese theft of American know-how. The question remained if they can convince their House colleagues. Congressman Dunn thought they could.

“I think we’re fortunate to have a great class – 35 new freshmen who are Republicans – and Democrats, there’s 25 of them. And we work well with all of that crowd. So that’s a huge chunk of the Congress right there that we can get to. Plus the committees that we sit on.”

Dunn and Gaetz said they plan to start that education campaign on September 5th when the House returns from its summer recess.