In a push to safeguard domestic trade secrets against infringement by foreign entities, the U.S. Congress recently enacted the Protecting American Intellectual Property Act of 2022, 35 USC § 1709 (PAIPA). This piece of legislation underscores Congress’s steadfast approach and aggressive stance on intellectual property protection.
PAIPA dictates the use of sanctions, selected from a specified sanctions menu, when the president determines that a ‘foreign person’ has partaken in or provided crucial support to the ‘significant theft’ of trade secrets of U.S. constituents. To better appreciate the implications of PAIPA, both in terms of its coverage and possible legal risks, it is essential to delve into the core features of this legislation.
Taking a closer look at PAIPA, it becomes clear that the act is geared towards curtailing the unchecked pilfering of American intellectual property by foreign players. The introduction of a ‘sanctions menu’ suggests a flexible approach, with the administration having the ability to handpick and impose the most appropriate penalties on a case-by-case basis.
Inevitably, PAIPA carries with it a certain degree of legal uncertainty and risk. The ‘foreign person’ designation used within the PAIPA leaves a large space for interpretation, and how strictly or broadly this condition will be applied in practice remains unclear. At the same time, what constitutes a ‘significant theft’ is another subject of ambiguity that could generate disquiet among foreign entities, corporations, and governments.
In conclusion, while PAIPA may serve to deter would-be intellectual property thieves and protect the inventiveness that is cardinal to the U.S’s economic prowess, the ambiguous language of the act is likely to spur legal concerns and disputes going forward.
For more complete information on this topic, please refer to the original coverage by Morgan Lewis on JD Supra.