In recent years a series of reports have provided evidence about the erosion of America's scientific and industrial base. But 'strikingly,' as Pat Choate observes in Hot Property: The Stealing of Ideas in an Age of Globalization, "the massive theft of U.S.-owned intellectual properties as a contributing cause to America's technological decline has been almost totally overlooked in these reports." In this timely and important book, Choate sounds the alarm about the threat posed by such piracy.

Choate, who is best known as Ross Perot's vice-presidential candidate in 1996, has sounded alarms before. When he published Agents of Influence, his study of Washington lobbyists funded by the Japanese government and Japanese corporations, he was denounced as a Japan-basher. Today the assertion that Japan has practiced result-oriented mercantilism rather than free trade for decades is rarely disputed. When Choate, like Perot, warned that as a result of the North American Free Trade Agreement, American corporations would move their factories to Mexico to take advantage of low labor costs, he was portrayed as a Mexico-basher. Bill Clinton and Al Gore argued that Mexico would be a market for American manufactured goods. Instead, according to the economist Charles McMillion: "The large U.S. net export losses to Mexico since NAFTA are concentrated in autos, machinery, electronics, apparel and furniture. U.S. net export gains are largely in agribusiness and bulk commodities such as cereals and organic chemicals." Score two out of two for Choate.

In his latest campaign, Choate is likely to find allies in the business community -- and opponents among some champions of developing nations, as well as some libertarians who argue for weakening or eliminating intellectual property rights. Choate quotes the definition of "copyright industries" used by the International Intellectual Property Alliance: "music and book publishing, radio and television broadcasting, cable television, newspapers and periodicals, records and tapes, motion pictures, theatrical productions, advertising, computer software and data processing" -- to which others, like pharmaceuticals, can be added. According to the intellectual property alliance, "worldwide digital piracy costs America's copyright industry $20 billion to $22 billion annually, and that approximation excludes illegal Internet downloads."

Patents, copyrights, trademarks and other intellectual property rights are useless if governments do not enforce them against thieves. However, officials in many developing nations are more concerned about promoting national economic growth by disseminating know-how than with protecting the rights of foreigners. Choate tells the story of Haima, a Chinese corporation that is the largest woven-carpet manufacturer in Asia. After Milliken & Company, the largest private textile company in the United States, lost a Chinese contract to Haima, "Milliken personnel obtained a copy of Haima's 1999 carpet catalog. It featured 16 copyrighted Milliken designs." Although an American court ordered Haima to pay Milliken more than $4 million, the American company has been unable to collect.

Choate acknowledges that as an industrializing nation in the 19th century the United States engaged in many of the practices that it condemns today, including industrial espionage. He recounts the tales of Samuel Slater, who brought secret British spinning machine technology to the United States, and Francis Cabot Lowell, a Boston patrician who used his photographic memory to steal the trade secrets of British textile manufacturers. "The most important feature of the Patent Act of 1793," Choate writes, "was what it did not provide: protections for foreign inventors. Only American citizens were eligible for a U.S. patent. Thus, any American could bring a foreign innovation to the United States and commercialize the idea, all with total legal immunity." In later generations, Germany and Japan similarly manipulated intellectual property rights.

In the 1990's, concern about the theft of intellectual property inspired the United States to promote the Trade Related Intellectual Property System. "Ironically," Choate observes, "after leading the long, historic fight to put these global protections into place, Washington is now strangely unwilling to use them." He notes that "since June 2000, the U.S. has not filed a single intellectual property case at the World Trade Organization."

Choate contrasts the attention that the Clinton administration paid to these issues with the lack of interest the Bush administration has displayed. The difference may be one of constituencies. "Copyright industries" like the movie and technology sectors provide much of the financial support for the Democratic Party, and they are far more threatened by intellectual property violations than are the commodity producers of the Republican red states. This interpretation finds support in Choate's data on the World Trade Organization: "Overall, the Bush administration filed only 12 cases with the W.T.O. during its first four years in office. Six of those dealt with foreign impediments to U.S. agricultural exports -- beef, rice, genetically enhanced foods, corn, wheat, cheeses, dairy products and apples."

Choate says that while industrializing countries may benefit from piracy, the world as a whole loses. "Piracy and counterfeiting impede innovation: thieves do not invest in research, design, production, development or advertising. . . . The result is fewer new medicines, fewer advances in science, fewer new products, fewer new music CDs, fewer new movies, less new software and higher prices for whatever is created." Everyone is harmed, either directly or indirectly, "when thieves steal from Microsoft and Disney." And, he concludes, "What is missing is the will of U.S. political leaders to confront those who are stealing U.S.-owned intellectual properties and with them the future of the American people."