During a Senate Judiciary Committee hearing prior to the Congressional recess, Sen. Adam Schiff (D-CA) questioned Mark Cohen, Senior Technology Fellow at the Asia Society of Northern California and Senior Fellow at the University of Akron Law School, about DeepSeek.
00:00Coons, we were bragging about you while you were out of the committee, and we will not repeat ourselves.
00:06But thank you. Thank you for your amazing leadership on this subcommittee.
00:11Mr. Cohen, I wanted to get your sense, because I've heard conflicting opinions about
00:16the role that piracy played or didn't play in the Chinese creation of Deep Seek.
00:22Do you have a view of whether this was their own innovation or their own, to use a term of art improperly in this context,
00:34fair use of the outputs of American AI models?
00:38Yeah. You know, I've seen some articles, and I haven't really gone into it at great depth.
00:44Obviously, I think it would offend any notion of fair use that we could conceivably imagine.
00:50But beyond that, I'm happy to respond in writing to this.
00:58Yeah. And in this case, if you've tracked of a former Google software engineer who was charged by DOJ with economic espionage,
01:12are you familiar with that case?
01:14Someone.
01:14Someone who left Google, took a lot of the information with him, became a founder and CEO of a technology company in China focused on AI.
01:24How frequent is that kind of occurrence?
01:28That's pretty blatant compared to cyber theft and other means of acquiring, stealing trade secrets.
01:36Well, let me, that's a great question.
01:38Let me respond first by saying that trade secrets are the most poorly enforced right of any IP right in China.
01:44And that's according to Chinese statistics.
01:46So you have about a, historically, about a 30% chance of success on a trade secret claim compared to as high as 80% official data.
01:55We can quibble with that.
01:56But for a patent case, it's about 80%.
01:58So you're starting from a very low threshold.
02:02The way to protect trade secrets in China, in general, is through non-compete agreements.
02:07And some states, including California, make it very difficult to enforce their non-compete agreements in other jurisdictions,
02:16particularly outside of the United States.
02:18I have no problem internally within the U.S. if some states want to enforce non-competes or enforce them.
02:25We have full faith in credit.
02:27We have discovery.
02:28You know, we have a legal system that works pretty well in most states.
02:31But when it comes to other jurisdictions like China or other places where there's rampant trade secret theft,
02:38the inability to enforce a non-compete agreement can really cripple a company's ability to stop the theft of trade secrets.
02:45And we've seen this repeated over and over in many high-tech, with regard to many high-tech companies.
02:52In fact, in California, you could be originally employed at a competitor.
02:57Let's say you're at Microsoft.
02:59You get hired by a California company.
03:01You're sent to their Beijing office.
03:03And now you're free of the Microsoft non-compete agreement because of the historically great interest
03:08that the state of California has in not enforcing non-compete agreements generally.
03:12So this is an issue that I can understand that for California's purposes, this is how California envisages its labor market.
03:22But when it goes overseas and starts affecting American competitiveness, we also have to think of its consequences more generally.
03:28Well, thank you.
03:28I appreciate that.
03:31And Ms. Temple, I wanted to ask you about IP.
03:36And the U.S. is behind many other countries in terms of combating pirated content, much of which comes through foreign entities impacting American rights holders.
03:50Some of the EU member states have adopted or voiced support for a no-fault injunction system for the most blatantly infringing sites.
03:59What are the pros and cons of that?
04:02Would you advocate we adopt something similar?
04:05And what stakeholders in the U.S. might be opposed to that adoption?
04:10Thank you for the question, Senator.
04:12As I mentioned in my testimony now, we have more than 55 countries who have adopted no-fault injunctive relief, otherwise known as sight blocking.
04:20That has now allowed us to have significant experience in how those regimes work.
04:26The EU actually has also done studies in terms of how those regimes work and how they can be implemented in both a safe and effective way.
04:35And so I think that we have a lot of experience in terms of establishing a sight blocking regime here in the United States.
04:42Overseas, in fact, those stakeholders who are involved, like the ISPs, are actually partners.
04:49A lot of the regimes overseas, we have collaborative partnerships with the ISPs.
04:55We're working with them day in and day out in terms of making sure that the systems are implemented properly.
05:02So I would be very, very hopeful that the ISPs here in the United States as well would follow their lead and work with us to collaborate on a way to effectively implement sight blocking in the United States against these rogue piracy sites.
05:16And have they been thus far in opposition to it, the American ISPs?
05:20I would say that in the past, the American ISPs have been opposed to legislation.
05:25I know that you all have been looking at this issue for some time.
05:30And again, really thanks Senator Tillis and Coons for all of their work on this issue.
05:34I think now that we do have a wealth of experience of sight blocking regimes throughout the world,
05:43and now that we do have those partnerships with other ISPs in other countries, such as in the EU region,
05:49I'm hopeful that the ISPs here in the United States will not have the same level of opposition that they've had in the past.
05:56I'll go back, Mr. Chairman.
05:57Senator Blackburn.
05:58Thank you, Mr. Chairman, and thank you all for being here.
