Tuesday, February 20, 2018
Business

PunditFact: Newt Gingrich says China stole $360 billion in intellectual property

The statement

"The Chinese last year probably stole $360 billion in intellectual property from the United States."

Newt Gingrich, May 15 on Fox News Sunday

The ruling

Intellectual property refers to creative concepts such as inventions, literary and artistic works, designs, symbols, names and images used in commerce, according to the World Intellectual Property Organization. Its creators and owners are protected legally through patents, copyrights and trademarks, but cross-border theft of intellectual property is hard to police.

Over the years, United States officials have said that China is one of the worst offenders. This has been driven in large part by an aggressive technology quest by China's central government.

We tracked down Gingrich's $360 billion figure to comments by William Evanina, director of the Counterintelligence and Security Center under Director of National Intelligence James Clapper.

Evanina told reporters in November 2015 that, based on reports by nearly 140 companies, espionage via computer hacking costs the U.S. economy $400 billion a year, and that the Chinese government is believed to be behind 90 percent of those attacks. That works out to $360 billion. Gingrich spokesman Ross Worthington subsequently confirmed that Evanina's comments were the source of Gingrich's number.

The first thing we should note, however, is that the $360 billion figure is only for losses from cyber-hacking — a limitation that Gingrich didn't specify.

Of course, adding in non-cyber losses would only increase that figure beyond $360 billion. And Worthington said this all may be an under-estimate because "corporations do not usually reveal the fact or allow (law enforcement) to go public or estimate losses because that would in effect expose their consumers, clients and stockholders to more losses, indirect and direct."

Still, experts agreed that there's a lot of uncertainty in determining the scale of intellectual property losses.

Another estimate for intellectual property theft from China, by the Commission on the Theft of American Intellectual Property, a blue-ribbon panel, pegged annual U.S. losses from intellectual property at approximately $300 billion, of which China accounted for "between 50 percent and 80 percent of the problem."

That would produce a figure between $150 billion and $240 billion, lower than what Gingrich said, though the commission acknowledged that such studies may be undercounting the scale of losses. "The exact figure is unknowable," the commission cautioned.

Independent experts strongly agreed.

"Estimating losses from intellectual property theft is like trying to predict next month's weather with 1960s technology," said Justin Hughes, a Loyola Law School professor who specializes in intellectual property. "Estimates are by nature guesstimates, and rough ones at that. I would not be comfortable with anything more specific than 'hundreds of billions of dollars.' "

The statement is accurate but needs clarification or additional information, so we rate it Mostly True.

Edited for print. Read the full version at PunditFact.com.

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