Government Report Highlights Semiconductor Industry’s Key Intellectual Property Concerns

by Semiconductor Industry Association

The semiconductor industry plays a critical role in driving U.S. innovation. For example, American semiconductor companies invested $32 billion in research and development in 2012 – one of the greatest shares of revenue of any industry. In order to ensure that these investments continue to benefit consumers around the world, strong intellectual property rights (IPR) protection is of utmost importance.

This week, the Office of the United States Trade Representative (USTR) released its annual “Special 301” report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of IPR.  The report prominently features SIA’s top IPR concerns, including semiconductor counterfeiting, trade secret protection, patent protection, utility model patents, forced technology transfer, and trade distorting preferences for domestic IP. In February, SIA submitted written comments to USTR highlighting these and other IPR concerns in four specific markets:  China, India, Russia, and Brazil.

In regard to counterfeit semiconductors, the report highlights the impact of the growing production and global distribution of fraudulent chips, not only in terms of lost sales volumes and damage to the reputation of the trademark owner, but also with regard to the safety of consumers:

“[H]igher defect and failure rates among counterfeit semiconductors may cause malfunctions in the equipment in which they are incorporated, which may include medical devices, vehicle safety and braking systems, and other critical applications.”

Trade secrets and forced technology transfer are another significant element of the report. Noting the apparent escalation of trade secret theft, particularly in China, the report urges its trade partners to ensure robust systems for protecting and enforcing trade secrets, including deterrent criminal penalties for trade secret theft.

SIA is pleased that the U.S. government is actively engaging governments around the world to address these pressing IP issues.