The Doj's China Initiative and the Controversy of Prosecuting Professors and Researchers in the U.s. for Trade Secrets Theft

• Jurisdiction: United States,Federal
• Citation: Vol. 46 No. 4
• Publication year: 2021
• Author: Catherine Lui and Krystal Anderson
• topic: Intellectual Property,Criminal Law,Federal

THE DOJ'S CHINA INITIATIVE AND THE CONTROVERSY OF PROSECUTING PROFESSORS AND RESEARCHERS IN THE U.S. FOR TRADE SECRETS THEFT

AUTHORS

Catherine Lui
Orrick, Herrington, & Sutcliffe LLP

Krystal Anderson
Orrick, Herrington, & Sutcliffe LLP

Despite the DOJ successfully obtaining convictions on a number of prosecutions under its China Initiative, many contend that it may be on the cusp of unraveling, particularly regarding the DOJ's efforts to target professors and researchers at American universities with alleged ties to China. On September 9, 2021, Anming Hu, a professor at the University of Tennessee, Knoxville ("UTK"), was acquitted over an alleged failure to disclose ties to a Chinese university in receiving federal grant funds. In July 2021, the DOJ also voluntarily dismissed five indictments against researchers alleged to have ties with the Chinese military. As a result of these headlines, particularly the Hu acquittal, the China Initiative has garnered a number of critics, and raised a number of questions pertaining to academic freedom, racial profiling, and the criminalization of routine research collaboration. This article explores the history of the DOJ's prosecution of professors and researchers at American universities under the China Initiative, and discusses the impact of the recent acquittal in the matter of United States v. Hu.¹

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THE CHINA INITIATIVE AND PROSECUTION OF U.S.-BASED PROFESSORS AND RESEARCHERS FOR TRADE SECRETS THEFT

On November 1, 2018, amidst a time of rising trade tensions between the U.S. and China, and against the backdrop of prior findings by the Trump Administration regarding China's trade practices, then-Attorney General Jeff Sessions announced the DOJ's "China Initiative," a prosecutorial crackdown on economic espionage, intellectual property theft, and other violations of U.S. law with a potential relationship to China.² The DOJ's China Initiative sets forth many key goals including: (i) to "[i] dentify priority trade secret cases, ensure that investigations are adequately resourced, and work to bring them to fruition in a timely manner and according to the facts and applicable law"; and (ii) to "[d]evelop an enforcement strategy concerning non-traditional collectors (e.g., researchers in labs, universities and the defense industrial base) that are being coopted into transferring technology contrary to U.S. interests."³

Following the announcement of the China Initiative, the DOJ moved to publicize and unseal several older cases that alleged trade secret theft by Chinese nationals and agents acting for Chinese companies, such as the widely-publicized Huawei case, a bank-fraud case in New York in which the DOJ alleged that Huawei Technologies Co., Ltd. and others stole trade secrets used to test mobile phones from T-Mobile and at least six other entities,⁴ and the Xiaoyu Li case, involving an 11-count indictment charging two Chinese nationals with stealing hundreds of millions of dollars' worth of "trade secrets, intellectual property, and other valuable business information"—including potential COVID-19 research.⁵ Many of these older cases are unlikely to ever end up before a U.S. judge, as the potential defendants now reside in China, which does not extradite to the U.S., though the DOJ has made clear through its continued efforts on cases such as these that it will continue its focus on the investigation and prosecution of intellectual property and trade secret theft, even if it is conducted by individuals aided and protected by foreign governments.⁶

However, the DOJ has also used the China Initiative to start thousands of new investigations on individuals residing in the United States, and, aligned with its key goals, has identified a general category of individuals for potential prosecution of IP theft: professors and researchers with ties to China at American universities. This strategy is currently under significant scrutiny by the legal community and general public. A significant number of professors and researchers at American universities have been investigated as a part of the China Initiative; many already successfully indicted and even sentenced to prison.⁷ In July 2020, Assistant Attorney General for National Security John C. Demers noted that China targets research and academic collaborations within the United States in order to obtain U.S. technology [and trade secrets] illegally, and insisted the DOJ "will continue to work with colleges and universities to protect U.S. research and development from exploitation by foreign powers and will prosecute those who defraud the U.S. Government."⁸

To provide a few examples, in May 2020, a federal grand jury returned an indictment charging a Chinese professor and researcher at the...