American Tax Dollars Are Powering China’s Patent Machine

US taxpayers have unwittingly funded a massive wave of patents claimed by researchers based in China, according to newly reviewed data from the US Patent and Trademark Office. Since 2010, research supported by various US government agencies has resulted in more than 1,000 patents being granted to inventors residing in China, covering sensitive fields such as biotechnology and semiconductors.

The data, obtained by Reuters and reviewed for the first time, reveals that this situation may fuel calls for either canceling or renegotiating the landmark US-China Science and Technology Agreement. Critics argue that the agreement disproportionately benefits China, Washington’s primary geopolitical rival.

From 2010 through the first quarter of 2024, the US Patent and Trademark Office granted 1,020 patents resulting from research funded at least in part by the US government, involving at least one inventor residing in China. The specifics of patent ownership between US entities and Chinese inventors remain unclear.

The patents include:

- 197 in pharmaceuticals

- 154 in biotechnology

These fields are of strategic importance to both the US and China.

Funding sources include:

- 92 patents through Pentagon funding

- 4 patents from NASA, which is legally prohibited from cooperating with China or Chinese entities

- 356 patents from the Department of Health and Human Services, the most significant contributor

Representative John Moolenaar, chairman of the House select committee on China, expressed concern over these findings. He highlighted the irony of US taxpayer money supporting Chinese advancements in areas like defense technology.

The State Department, responsible for renegotiating the US-China Science and Technology Agreement, has stated it remains engaged with China regarding the pact. They assert a commitment to protecting US interests in science and technology.

China’s response came from Liu Pengyu, a spokesperson for China's embassy in Washington, who labeled science and technology as an "open business" and urged US officials to move past what he described as a Cold War mentality.

The data provided to the House committee did not disclose specific projects or patents. However, the US-China Science and Technology Agreement, signed in 1979, facilitated a significant increase in academic and commercial exchanges between the two nations.

Recent trends show a decline in such patents—from a peak of 99 patents in 2019 to 61 in 2023. In the first quarter of 2024 alone, there were 16 patents, indicating heightened US government concern over Chinese technological advancements.

The agreement, initially seen as a stabilising force in US-China relations, is now under scrutiny from lawmakers worried about China's rising military capabilities and alleged theft of US intellectual property. Proponents of renewing the deal argue that ending it would hinder academic and commercial cooperation and prevent the US from tracking China's technological progress.

The agreement’s second six-month extension expired in August 2023, and a possible short-term extension is under negotiation as both sides seek to address the terms. Despite representing only a small fraction of China’s global patent portfolio, the patents funded by the US demonstrate potential cost of scientific cooperation with the Chinese Commmunist Party.