Indiana’s Robust IP Laws Highlight Challenges in Combating Chinese Intellectual Property Theft Amid Trade Tensions

The ongoing trade tensions between the United States and China have intensified scrutiny on the longstanding problem of intellectual property (IP) theft. On March 22, President Donald Trump announced tariffs on Chinese imports, citing Chinese theft of American IP as a primary justification. Since then, both nations have engaged in reciprocal economic sanctions, raising concerns among trade experts about a potential global trade war. Meanwhile, IP law specialists highlight the situation as a call for stronger protections both in the U.S. and internationally.

Intellectual property theft encompasses a broad range of violations, covering any idea, product, or brand developed in the United States. Fred Tecce, an IP attorney and managing partner at Ice Miller’s Philadelphia office, notes that while counterfeit luxury items like fake Rolex watches are well-known examples, less conspicuous products such as dietary supplements and shampoos are frequently imitated. These counterfeit goods not only deceive consumers but may also pose physical health risks.

On the patent front, Charlie Meyer of Woodard, Emhardt, Moriarty, McNett & Henry LLP explains that overseas manufacturers often produce goods covered by American patents and then import these knockoffs back into the U.S. for profit. Additionally, Chinese producers sometimes use American molds to create identical counterfeit products.

Recent changes in U.S. IP law have complicated enforcement efforts, emboldening offshore counterfeiters. Tecce points to the landmark Supreme Court decision in eBay Inc. v. MercExchange, LLC (547 U.S. 388, 2006), which requires IP holders to demonstrate entitlement to an injunction after infringement has occurred. This ruling has shifted the system toward a reactive posture, forcing patent holders to wait for theft before seeking legal remedies.

However, Indiana stands out for its more proactive approach. Karl Manders, CEO of Continental Enterprises and an IP consultant, identifies two key Indiana cases that have strengthened IP protections within the state. The 1994 Indiana Court of Appeals decision in Jacobs v. State (640 N.E.2d 61) classified T-shirts bearing legal trademarks as "written instruments" under Indiana’s forgery statute. This interpretation made the sale of counterfeit T-shirts prosecutable under forgery laws.

Building on Jacobs, the Indiana Supreme Court in 2012, in Yao, et al. v. State (35S02-1112-CR-704), extended the forgery statute’s reach to trademarked airsoft guns, deeming them written instruments as well. The court further held that even a single sale of a counterfeit item in Indiana grants the state jurisdiction over the IP theft case. These rulings collectively empower Indiana courts to prosecute counterfeiters who operate overseas but ship goods into Indiana, enabling local IP holders to seek justice against foreign infringers.

Indiana’s legal framework also includes the Crime Victims Relief Act (CVRA), which Manders highlights as unique. The CVRA allows victims of counterfeiting to recover attorney fees and treble damages upon proving their case by a preponderance of the evidence. This statutory remedy has not been widely adopted outside Indiana, making the state’s protections particularly robust.

Despite Indiana’s strong model, attorneys acknowledge the difficulty in advising clients on IP protection strategies across different jurisdictions. Meyer recommends that inventors and innovators secure available protections under U.S. law and in any foreign markets where they conduct business.

William Mansfield, director of intellectual property at ABRO Industries, Inc., which markets non-electronic consumer goods internationally, underscores the importance of understanding legal and cultural differences in China. He stresses that face-to-face communication with Chinese partners is vital for demonstrating respect and commitment to resolving counterfeit issues collaboratively. Mansfield’s extensive travel to China—approximately 40 trips—has significantly reduced unauthorized sales of ABRO’s protected products.

Education also plays a critical role in IP protection. Meyer advises IP owners to inform distributors, retailers, and consumers about the value of genuine products to encourage exclusive sales and purchases of authentic goods.

As U.S.-China trade disputes continue, Indiana’s distinctive legal precedents and proactive enforcement mechanisms offer valuable lessons for protecting American intellectual property in an increasingly complex global marketplace.