Jeffrey A. Newman
United States businesses are facing a daunting task in protecting their intellectual property from the Chinese Government, especially in joint ventures including in the biotech industry and in pharmaceutical development. According to press reports, U.S. intelligence officials have informed members of Congress that Chinese entities are engaged in activitiy int he United States that is contrary to our national security. Last year there was concern over China’s company WuXi which reportedly shared U.S. client data with Beijing, according to Reuters.
WuXi AppTec’s services including conducted research and development to making pharmaceutical raw materials and manufacturing drugs. Its customers include larhe poharma companies and small biotech firms.
In addition, the People’s Republic Of China has passed a number of laws that give the Government authority to demand and require sensitive information from Chinese and Foreign owned businesses in the name of state security. This information may be used by CCP to benefit Chinese companies. In 2020, the PRC passed a Foreign Investment LAw requiring all companies registered in the PRC to establish a CCP unit in the Chinese operation to provide data held by them which might benefit China. These and other laws require Chinese firms with business outside China and inside Chine to provide information to the central government. To compel Chinese companies to comply the CCP instituted a nationawide social credit rating system for all corporations to detect misconduct and noncompliance. Companies may be given low scoeres by failing to transfer internal data to the CCP.
Congress did not pass a law called the BIOSECURE ACT. The Act (H.R. 8333) was a bill that would prevent US government agencies from buying biotechnology from certain foreign companies. The bill was introduced in the 118th Congress and was intended to protect national security. However, the bill stalled in the Senate and is unlikely to become law in 2024. With recent advances in artifical intelligence and the capabililty of assessing massive amounts of data, these dangers are now multiplied.
Jeff Newman JD MBA, represents whistleblowers nationwide relating to major tariff fraud concerning imported Chinese goods as well as Medicare and Medicaid fraud cases under the False Claims Act (Qui Tam), and SEC, IRS and FINCEN whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
