PERSPECTIVE: Critical National Security Implications in ITC’s 5G Patent Review

In March, the United States International Trade Commission (ITC) was asked to investigate an obscure patent complaint by a recently created foreign company that has the potential to stall American advancement in the race to 5G and provoke significant national security repercussions. Given that the development of 5G could transform the global distribution of power by stimulating the fourth technological revolution, the United States has every incentive to dedicate their extensive resources to the race. This requires, however, that the ITC prioritize national security and U.S. needs in the 5G space over specious patent lawsuits.

The ITC investigates imports that are accused of violating intellectual property (IP) rights. If the ITC determines that a product infringes on IP, it can issue an “exclusion order” and effectively ban all imports of the product category into the United States. The ITC’s mission, although commendable, has been subject to misuse and manipulation. Non-practicing entities (NPEs), or “patent trolls,” are not creating new technology, new products, or even new ideas, outside of how to churn up litigation against actual technology innovators and job creators. The NPE business model is to buy or acquire patents to bring patent infringement lawsuits in courts and the ITC, often in parallel. They want to try to make big money squeezing companies whose products involve very complex technologies. But if they are actually successful at the ITC, they would just get an import ban, something they really don’t want. This makes it perfectly clear that the NPEs are just using the ITC as a way to try to threaten companies into paying massive sums to avoid this terrible potential outcome. Increasingly, they are attacking major companies, from the auto industry to technology companies such as Apple, Samsung, or Amazon.

The ITC’s decisions in pending cases will have an enormous influence over who controls the next stage technology of 5G. This technology promises to deliver speeds over 100 times faster than ever before experienced, and experts see widespread 5G coverage and adoption as necessary to the development and availability of important frontier technologies. The nation that leads the way in the race to 5G will solidify its status as the leader of the global economy in the future. It is therefore imperative that the United States is not left behind.

Two recent ITC cases highlight the potential threat to America’s leadership in the race to 5G. Neodron, an Irish NPE, recently filed two similar complaints with the ITC for an alleged patent violation on touchscreen technology. If exclusion orders were granted, over 90 percent of tablets, smartphones, and touchscreen laptops would be banned from entering the United States, creating significant national security issues.

An adverse ruling in either case, let alone both, would open the door to Chinese providers, such as Huawei and its many Chinese competitors, to dominate the consumer electronics industry in the United States, strengthening an aggressive economic competitor. Without any effort, China would gain great advantage in the 5G race. These companies would be given free rein without competition in the American market to build market share.

Relying on 5G infrastructure developed and maintained by another nation would make the United States far more vulnerable — not just economically, but in its national security. Given that this infrastructure is essential to civilian, military, and business use, allowing our communication and smart devices to be made by a hostile foreign country opens the door to the threat of espionage, cyber-attacks, and even terrorism. China’s Huawei has been accused by the U.S. government and multiple foreign governments of espionage. In February, U.S. federal prosecutors indicted Huawei for installing surveillance equipment for the Iranian government. It was also alleged that Huawei was involved with numerous projects in support of North Korea. Given its questionable record, providing it or its Chinese competitors a strong foothold in the American market would be a tremendous threat to national security and would directly harm the American public in the long term.

If Neodron succeeds in its mission to ban the devices that we rely on, the ITC will have failed its legal obligation to consider the public interest of American consumers when issuing remedies. The ITC should reject Neodron’s claims on the grounds of public interest to keep the United States competitive in the race to 5G and forestall Chinese progress and its accompanying threats. Any other decision would be simply ruinous to America’s position as a global leader.

The views expressed here are the writer’s and are not necessarily endorsed by Homeland Security Today, which welcomes a broad range of viewpoints in support of securing our homeland. To submit a piece for consideration, email [email protected] Our editorial guidelines can be found here.

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Christopher Burnham is a Chairman of Cambridge Global Capital, LLC. He co-founded Cambridge after a distinguished career in government, diplomacy, banking, and private equity. He has served as Under Secretary General for Management of the United Nations, Under Secretary of State for Management (acting), Assistant Secretary of State for Resource Management and Chief Financial Officer of the U.S. Department of State, Treasurer of the State of Connecticut, three-term Member of the Connecticut House of Representatives, vice chairman of Deutsche Bank Asset Management and global co-head of private equity, and CEO of PIMCO’s largest equity arm, Columbus Circle Investors. He has also, most recently, served as a member of Donald Trump's Presidential Transition Team at the Department of State. Mr. Burnham led reforms of the Connecticut Treasury, modernization of the financial and reporting systems of the U.S. State Department, and instituted sweeping governance reforms as chief management officer of the United Nations. This included the establishment of the first UN Ethics Office, the first United Nations Independent Audit Advisory Committee, the adoption of new International Public Sector Accounting Standards, the first comprehensive consolidated annual report in the history of the United Nations, and a new whistleblower protection policy that received independent recognition as the “gold standard.” He also implemented best-in-class financial disclosure reporting by senior United Nations officials and staff, based on the U.S. Government model. Mr. Burnham joined the United Nations after serving as acting Under Secretary of State for Management for Secretary Condoleezza Rice, and as Assistant Secretary of State for resource management and Chief Financial Officer of the State Department for General Colin Powell. Mr. Burnham joined the Department of State in September 2001, and has been confirmed twice by the United States Senate. From 2006 to December 2012, Mr. Burnham was the Vice Chairman and Managing Director of Deutsche Asset Management, and a member of the Global Operating Committee. In 2008, Mr. Burnham co-founded and led Deutsche Bank’s direct private equity group, RREEF Capital Partners, the bank’s reentry into private equity after an eight-year absence. He also chaired Deutsche Bank’s governance committee in Germany, and is a globally recognized expert in the implementation of accountability, transparency, and best practice in government, corporations, and inter-governmental organizations. A veteran of the United States Marine Corps Reserve who retired at the rank of Lieutenant Colonel, Mr. Burnham volunteered for active duty in 1990 and served as an infantry platoon commander in the Gulf War. He and his men were part of the lead Allied forces to reach and liberate Kuwait City. He is currently co-founder, chairman and chief executive officer of Cambridge Global Capital, a venture capital investment firm focused on opportunities in life sciences, cyber and data security, and data analytics. Mr. Burnham studied national security policy at Georgetown’s National Security Studies Program, and is a graduate of Washington and Lee University and Harvard University, where he earned a master’s degree in Public Administration.

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