Chinese Professor Asserts Chinese Companies are Victims of Unfair Espionage Laws – And Then Argues China Should Adopt Similar Laws To Avoid Victimization

By November 28, 2012Trade Secrets

Han Qi, a professor at the University of International Business and Economics, Beijing has penned an opinion piece in ChinaDaily USA that certainly represents a curve-ball in the trade secrets world.  Han Qi argues that it is CHINA that is at risk of having its corporate trade secrets misappropriated.  The title of his post?  “VICTIMS OF UNFAIR ESPIONAGE LAWS.”

The only “victims” he identifies are Huawei and ZTE, the massive Chinese telecom companies that were the ancillary subjects of recent Congressional hearings.  He argues: “The problem is that some developed countries judging others to be like themselves, assume that Chinese enterprises engage in corporate spying in their backyards.  Asked why the non-confidential version of the US House Permanent Select Committee on Intelligence report didn’t provide any “hard evidence” against Huawei for corporate spying, two intelligence officials familiar with the case said the most worrying factor for the US government agencies was the Chinese company’s “ability to engage in espionage or sabotage” in the future.  This is ridiculous. How could they use a conjecture – possibility of a future threat – to brand Huawei a black sheep? It is more like giving a dog a bad name to hang him.”

Unfortunately for Professor Han, his argument creates a standard that he can’t satisfy, either.  Where’s the “hard evidence” that a single Chinese company has had its intellectual property stolen?  Where’s the “hard evidence” that Chinese companies are the victims of espionage laws that are unfair?  Ironically, Professor Han acknowledges corporate espionage “is a common phenomenon both at home and abroad. In fact, it is as old as the industrial society itself.”  This is correct, obviously, even in Professor’s Han’s China.  He then confusingly asserts the following, perhaps to bolster his implied argument that what Chinese corporations are doing really isn’t illegal “espionage” but rather legal “intelligence gathering”:  “It is difficult to make a clear distinction between corporate spying, which is illegal, and intelligence gathering, which is legal. Corporate spying refers to theft of trade secrets. And a trade secret is technical information not generally known to the public, which can bring some sort of economic benefit to its holder. Commercial information, on the other hand, refers to the collection, analysis and dissemination of a competitor’s intelligence by following professional ethics.”

He then asserts “There is more than enough evidence to prove that China is a victim of trade spying.”  Professor Han’s evidence?  He doesn’t identify it.  He does a complete reversal at the end of his piece (remember, called “Victims of Unfair Espionage Laws”) and calls for CHINA to mimic the United States in its Economic Espionage Act, arguing as follows: “China has no specialized legislation on economic espionage and, hence, should take the US example to establish an effective trade secret protection mechanism for Chinese enterprises doing business overseas. Given China’s imitative strategy of catching up with developed countries, Chinese enterprises cannot avoid being accused of corporate spying.  So Chinese enterprises have to be more self-disciplined, respect intellectual property rights, comply with the laws of host countries, acquire advanced technologies and information through market transactions and thus improve their image and reputation in the world market.”  While I’m all for Professor Han’s suggestion that China get up-to-speed with the rest of the world in terms of recognizing and respecting intellectual property rights, his piece doesn’t support the suggestion and actually detracts from this agreeable message.  Perhaps it was an edited piece – but from the title of the piece his primary argument was to be that China and Chinese companies are the victims of unfair espionage laws – and I don’t think the global record supports such an argument and certainly Professor Han’s piece doesn’t share the evidence of the same.

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Author Todd Sullivan

Todd has a niche practice focusing on employee departures and defections, including the litigation of injunctions and trials in cases involving noncompete and nonsolicitation covenants, trade secret misappropriation, allegations of unfair competition, duty of loyalty breaches, inevitable disclosure, and employee raiding. His clients are companies and key employees who seek his advice regarding the retention and separation process; he routinely drafts, reviews, and negotiates employment retention and separation agreements. As lead counsel, Todd has litigated more than 100 employee defection matters in federal and state trial and appellate courts and has arbitrated others throughout the United States. His clients span every industry sector — banking, insurance, biotechnology, manufacturing, life sciences, computer services, computer software, personnel placement, securities brokerage, advertising, radio and television broadcasting, legal medical and architectural professional services, government contracting, and even NASCAR. Todd recently served as lead defense counsel in one of the most significant broker defection cases ever tried before FINRA and also as lead plaintiff’s counsel in the largest-ever case of trade secrets theft in North Carolina.

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