New Legislation Would Impose Additional Duties on Mainland Chinese Goods to Compensate for IPR Theft

Legislation introduced in the House of Representatives on 2 December by Rep. Louis Gohmert (Republican-Texas) and co-sponsored by three other Republican lawmakers (H.R. 6128) would direct the president to impose additional duties on mainland Chinese goods to compensate holders of U.S. intellectual property rights for losses resulting from violations of such IPR in mainland China.

The legislation would require the Office of the U.S. Trade Representative, in consultation with the U.S. International Trade Commission, to conduct an annual study to determine the estimated annual loss of revenue to holders of U.S. IPR as a result of direct or indirect violations of such IPR in mainland China or by any mainland Chinese person, including governmental entities of mainland China, in the preceding calendar year. The first such report would be required within 120 days from the date of enactment of H.R. 6128.

The president would then be required to impose duties on mainland Chinese goods in an amount equivalent to the estimated total loss of revenue to holders of U.S. IPR as a result of violations of such IPR in mainland China during the previous calendar year, as determined by the USTR study, reduced by the total amount of any tariffs collected pursuant to Section 301 of the Trade Act of 1974 or any other legal provision authorising the president to safeguard U.S. IPR. The legislation would also establish a trust fund in the U.S. Treasury Department to compensate the injury suffered by holders of U.S. IPR., consisting of the duties collected by U.S. Customs and Border Protection under the authority of H.R. 6128.

The legislation has been referred to the House Ways and Means Committee and its outlook is uncertain at this time.