suboptimal outcomes for the firms involved and for innovation, generally. Further, these measures discourage foreign investment in national economies, slowing the pace of innovation and economic progress. Government intervention in the commercial decisions that enterprises make regarding the ownership, development, registration, or licensing of IPR is not consistent with international practice, and may raise concerns regarding consistency with international obligations as well.
These government measures often have the effect of distorting trade by forcing U.S. companies to transfer their technology or other valuable commercial information to national entities. Examples of these policies, include, but are not limited to:
- Requiring the transfer of technology as a condition for obtaining regulatory approvals or otherwise securing access to a market, or for allowing a company to continue to do business in the market;
- Directing state-owned enterprises in innovative sectors to seek non-commercial terms from their foreign business partners, including with respect to the acquisition and use or licensing of IPR;
- Providing national firms with a competitive advantage by failing to effectively enforce IPR, including patents, trademarks, trade secrets, and copyrights, thereby allowing those firms to misappropriate or infringe U.S. companies' IPR;
- Failing to take meaningful measures to prevent or deter cyber intrusions and other unauthorized activities;
- Requiring use of, or providing preferences to, including with respect to government procurement, products or services that contain locally-developed or owned IPR or that are produced by local manufactures or service providers;
- Manipulating the standards development process to create unfair advantages for national firms, including with respect to the terms on which IPR is licensed; and
- Requiring the submission of excessive (and often unnecessary) confidential business information for regulatory approval purposes and failing to protect such information appropriately.
Some country-specific examples of these measures are identified in Section II. In China, market access, government procurement, and the receipt of certain preferences or benefits are conditioned on a firm's ability to demonstrate that certain IPR is developed in China or are
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