U.S. Trade Agency’s China Focus Good for Green Tech Companies

U.S. Trade Agency’s China Focus Good for Green Tech Companies

 The Office of the United States Trade Representative (USTR) is the federal agency responsible for conducting trade negotiations and developing and coordinating U.S. trade policy.

As it did last year, the USTR will again make intellectual property rights (IPR) a top priority in trade relations with China in 2014.  While Hollywood movie copyrights and drug patents may be the first IPRs that come to mind, IPR in green technologies could also be heavily impacted by the USTR’s attention to China.

The copyright and trade secret dispute between American Superconductor (AMSC) and Sinovel (see, e.g., previous posts hereherehere and here), a Chinese wind turbine manufacturer, highlights the risks of doing clean tech business in China and provides an indication of what is at stake for green IPR holders.

In that case, AMSC accused Sinovel of unauthorized use of its turbine control software source code and the binary code, or upper layer, of its software for certain power converters used in its 1.5 MW turbines.  AMSC alleged that Sinovel illegally used the source code to develop a software modification so Sinovel could circumvent the encryption and remove technical protection measures on the power converters.

The U.S. government – not the USTR, but the Department of Justice – got involved when it filed an indictment in federal court in Wisconsin alleging that Sinovel, two of its employees, and a former AMSC employee conspired to commit trade secret theft and criminal copyright infringement.  According to the indictment, AMSC was cheated out of $800,000,000.

By tying IP to trade, The USTR may be able to obtain tangible improvements such as tougher laws and improved enforcement measures.  Hopefully, this could cause a larger shift in attitude in China toward one of respect for IPR, a change that would help both US and Chinese clean tech companies.

Of course, the USTR’s bailiwick extends beyond IP, and the clean tech industry benefits from its other activities as well.   Most notable, perhaps, was the joint effort of the USTR and U.S. Customs and Border Protection to enforce trade duty orders against Chinese solar panel makers engaged in unfair trade practices.

US-Chinese relations are a hot topic in clean tech.  Indeed, one of the panels at this year’s UC Hastings Cleantech Roundtable is entitled “Beyond Trade Wars:  Enhancing US-China Clean Tech Relations.”

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