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Restrictions in doing business with Chinese companies continue

On Behalf of | Nov 7, 2018 | Uncategorized

Intellectual property is a company’s most valuable asset. Protecting trade secrets keeps others from stealing their profits. It also allows companies to compete. For this reason, concerns about IP theft taking place in China need to be taken seriously.

To protect American companies, the U.S. government is taking a number of steps to combat the alleged theft. This includes taking action against individual Chinese firms.

IP theft in the computer chip industry

According to a Wall Street Journal article, the U.S. placed restrictions on American companies doing business with Fujian Jinhua Integrated Circuit Co. Jinhua manufactures computer chips. This company also receives significant financing from the Chinese government. Restrictions include preventing American companies from selling them technology and software.

“Jinhua poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States,” the U.S. Commerce Department said in a statement. Because of IP theft, the commerce department possibly believes American companies do not have the ability to compete in the chip industry.

In December, American chip manufacturer Micron sued Jinhua in federal court for intellectual property theft. Jinhua then sued Micron in China’s Fujian province, temporarily preventing Micron from selling certain products in China. Micron next issued a warning that Chinese government interference could prevent them from effectively competing with Chinese companies. And soon after that, the commerce department action began.

Continued concerns regarding IP theft

The U.S. government continues to criticize China on its failure to compromise pertaining to key differences in the current trade dispute. This includes treatment of American companies dealing in computer chips. Rather than compromise, China appears to be trying to kill any key deals involving American companies.

It’s difficult to know when relations will improve. In the meantime, guidance for businesses will be invaluable. It’s vital for companies to receive protection pertaining to trademark and intellectual property matters. It may also be necessary to have legal counsel to make one aware of the risks. And because of such matters being so complex, it would require experienced representation.