Republican Lawmakers Propose PAID Act to Shield U.S. Intellectual Property from Chinese and Other Foreign Threats

Two Republican lawmakers have introduced legislation designed to protect U.S. intellectual property (IP) from theft by the Chinese Communist Party (CCP) and other foreign adversaries. The Protecting American Innovation and Development (PAID) Act seeks to expose unauthorized use of American IP and safeguard the competitiveness of U.S. businesses alongside national security interests.

Rep. Young Kim (R-Calif.), chairwoman of the House Foreign Affairs Subcommittee on the Indo-Pacific, announced the bill on July 2, emphasizing the threat posed by authoritarian regimes such as the CCP, North Korea, Russia, and Iran. "We cannot allow authoritarian regimes like the Chinese Communist Party (CCP), North Korea, Russia, and Iran to get away with IP theft, steal U.S. trade secrets, and undermine our national security," she stated.

The PAID Act specifically targets foreign adversary entities that utilize U.S. intellectual property related to critical or emerging technologies—including hypersonic systems, artificial intelligence, and space technology—without proper licensing. Under the bill, the Secretary of Commerce is tasked with identifying and reporting such violations to Congress.

The issue of IP theft by the CCP is longstanding. A 2018 report by the Office of the U.S. Trade Representative estimated that Chinese theft of American intellectual property costs the U.S. economy between $225 billion and $600 billion annually.

Rep. John Moolenaar (R-Mich), chairman of the House Select Committee on the Chinese Communist Party and co-sponsor of the PAID Act, condemned the actions of CCP-controlled companies like Huawei. "Chinese Communist Party-controlled companies like Huawei illegally siphon off our technology and leave American tech companies high and dry," he said. "I’m proud to co-sponsor Rep. Kim’s bill that will push back against this theft and support the ingenuity of American tech companies."

If enacted, the legislation will empower the End-User Review Committee to determine whether foreign adversary entities are using American IP without authorization. Entities found in violation would be listed in the Federal Register by the Commerce Secretary.

Additionally, the PAID Act allows American owners of stolen trade secrets or those with evidence of such theft to petition the End-User Review Committee to investigate potential violations.

Earlier this year, U.S. Ambassador to China Nicholas Burns acknowledged that U.S. companies frequently raise concerns about IP theft when operating in China.

Complementing the PAID Act, Rep. John Curtis (R-Utah) introduced the Combatting China’s Pilfering of Intellectual Property (CCP IP) Act in March. This bill proposes financial sanctions against companies, government agencies, and individuals involved in IP theft, along with visa bans on CCP members and officials until such practices cease.

The 2020 China Task Force, a bipartisan group of 15 House members, released a report highlighting the CCP’s strategy to surpass the U.S. in technology leadership through IP theft, industrial espionage, and other hostile acts. The report detailed how the CCP damages the value of U.S. businesses’ intellectual property to inflict economic harm while enabling Chinese firms to profit from stolen IP.

In October 2023, the Five Eyes intelligence alliance—comprising Australia, Canada, New Zealand, the United Kingdom, and the United States—warned that IP theft and trade secret misappropriation pose unprecedented threats to Western nations.

FBI Director Christopher Wray has underscored the breadth of CCP spying operations, which span agriculture, aviation, biotechnology, healthcare, robotics, and academic research. He noted that the theft extends beyond large corporations to smaller startups, with approximately 2,000 active investigations related to Chinese government efforts to steal information.

The PAID Act represents a legislative effort to strengthen U.S. defenses against foreign IP theft, reinforcing existing measures and signaling congressional resolve to protect American innovation and national security.