Trump Administration Examines U.S. Universities' Partnerships with Chinese Entities

Holland & Knight LLP

Amid the Trump Administration's plan to reduce China's access to U.S. intellectual property, the federal government is imposing tighter scrutiny over U.S. universities' research partnerships with Chinese entities. The move is meant to prevent technology transfers that could have national security implications.

Michael Griffin, Under Secretary of Defense for Research and Engineering, testified on June 21, 2018, at a House Armed Services Committee hearing on military technology transfer. Griffin stated that the U.S. Department of Defense (DoD) should make sure that research assignments do not go to U.S. universities that have ties to entities such as Chinese tech company Huawei. "Certainly, universities have a very long, multi-decade history of collaboration with the national security community at large on problems of national interest. It's one of our greatest strengths. But doing so in an environment that can be penetrated by adversaries is not wise, and we are looking more closely at that," Griffin told the Committee. Another DoD official stated that DoD is reviewing the contract language associated with research projects at those universities.

During the same week, a bicameral and bipartisan group of 26 lawmakers sent a letter to U.S. Secretary of Education Betsy DeVos on June 19, 2018, urging her to look into Huawei's research partnerships with more than 50 universities in the United States. They asked her to convene a working group to understand how China "attempts to gather U.S. technology on U.S. university and college campuses and to develop recommendations ... for protecting the U.S. technology advantage" in addition to requiring "information from the U.S. universities involved in any partnership with Huawei, especially those receiving any federal research funding (including Department of Defense funding) to gather information related to whether any such funding is involved in a Huawei partnership, and whether any research personnel ... are involved in these efforts."

In recent months, tensions between the U.S. and China have flared as President Donald Trump decided to crack down on Chinese acquisition of U.S. technology by imposing additional tariffs on $50 billion worth of Chinese goods and limiting Chinese investment into the U.S.

Similar to other recent announcements related to China from the Trump Administration, this plan may trigger retaliatory action from China's government.

The bottom line is that U.S. schools need to be cautious and strategic when negotiating any type of joint venture contract that may involve technology transfer to China, particularly if the U.S. school also has U.S. government contracts, especially with DoD.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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