The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!
— Donald J. Trump (@realDonaldTrump) March 7, 2018
The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!
— Donald J. Trump (@realDonaldTrump) March 7, 2018
Aside from Trump being the one saying what is being said,
Is there anything actually there to what is being said?
Below, David Stein makes a compelling case that the answer is “no.”
Leastwise, as far as other nations being “the enemy.”
Instead, “the enemy” is at once much closer and more pernicious.
“The enemy” are the ones seeking to place what otherwise may be considered “good” ends and seek to NOT have anyone pay attention to the Means to those Ends.
“The enemy” are the ones that seek to denigrate innovation, just because the form of that innovation is in a form that they “feel” should not be rewarded because for some reason, rewarding that innovation is somehow “taking” something from others.
This is the enemy that needs to be thrust into the spotlight, the sun light and its ignorance and vampiric tendencies made to sizzle and fry away in the light of inte11ectual honesty.
All of Trump’s tweets are the ravings of a deranged lunatic.
Except the ones that mention intellectual property. Those we should take Very Seriously Indeed.
Hence, post 1 below.
Mark, “deranged lunatic.”
You must be a Democrat.
?
I know plenty of people across the political spectrum who think that Trump is a deranged lunatic.
anon, Trump derangement syndrome?
I do not see the point that you are attempting to make with your reply Ned.
I doubt that Trump is the first to display what people call the deranged lunatic behavior, and I doubt that he deserves his name attached to that behavior.
Be that as it may, you do not seem to be actually responding to my comment, so if you could provide a little more as to where you are wanting to go with your comment, that might be helpful.
Anon, Trump derangement syndrome is a term of art that has arisen to describe the reaction of Democrats, fake news media and their fellow travelers to Trump. He is literally driving them nuts.
I recall something similar back in a day when Reagan was president. They constantly he tried to belittle him in one way or another. They ran in circles thinking that sky was going to fall, literally, when he made the joke about bombing Russian. They were in literal panic about the guy.
But Reagan turned out to be a tremendous success, perhaps the most successful president in the twentieth century.
Ditto the Trump presidency. The more successfully he is, the more derranged the commentary.
Thanks for clarifying that, Ned – I was not aware of that meaning.
I have heard of a different phrase that appears to fit: don’t get into a mud fight with a pig; the pig enjoys it.
FYI, that term of art has multiple meanings Ned
See link to urbandictionary.com
(and note the voting trends…)
I have heard that if you are successful in China, but want to expatriate that money to say your parent company, one has to ask the Chinese government to release your money from your bank accounts.
I would like to hear from others if they heard such things.
27 comments… and no one has addressed the underlying basis of the post. As IP professionals, shouldn’t we be interested in identifying and discussing the substance of the alleged IP theft? The internet has dozens of forums to throw generic shade at DJT.
Here’s the allegation (courtesy Forbes):
And here’s the response:
I have two general responses.
First: Kang’s explanation seems quite plausible that the partnerships aren’t legally compelled. The result may even be by design, but fairly achieved.
China has a massive domestic market. US corporations want to participate, but can’t do it flying solo – due not only to China’s massive manufacturing base, but also knowledge about Chinese marketing, distribution channels, regulatory compliance, etc. Partnerships happen; information is exchanged; Chinese companies mine the partnership information for valuable information, including IP.
What’s unfair about this? Where not legally compelled, this turn of events seems perfectly fair. Perhaps unfavorable to the US, but it’s the product of China’s market leverage.
I’m reminded that the original purpose of intellectual property systems was not to encourage inventorship, but importation of foreign technologies. The most basic form of “importation” is no longer relevant in the age of the internet, since we can access Japan’s public patent database as easily as they can access ours. But China’s actions seem like the next level in that strategy: “Bring your products to China and build them here, for our population and markets, so that we can learn how you design the technology.”
Second: What if the U.S. Trade Representative is correct, and China is legally pressuring U.S. companies into partnerships?
I guess the question becomes: What do we think of governments using the force of law to skew international competition in domestic markets toward domestic companies? Which is… er… a central plank of the economic policy of the current administration? Like this:
Or this:
Given those policies, Trump’s current actions don’t seem like complaints that China’s use of leverage is illegal – but merely more effective than ours.
Let’s put that aside and ask what the US should do about this, if we believe it’s occurring and it is problematic. Tariffs and trade wars are economic forms of mutually-assured destruction. What are the alternatives?
(1) Diplomacy. If China really is engaging in this behavior “across virtually all business sectors,” then it should be easy to amass a wide body of evidence to this effect. Put together a compendium of evidence and bring it to the UN.
(2) Strategy. Supply and demand is a two-way street – China wants our goods and IP at least as much as we want their business – so we have some counter-leverage here that we’re apparently not using. Create stateside initiatives to explore why China has leverage. Create localized resources that can substitute for the value-add that these Chinese companies provide. Form business networks, including participation by the federal government – and even European trade partners (which may have similar experiences) – to share information and resources about breaking into Chinese markets.
More options have to be available than lazily lashing out with tariffs. But these options require finesse, deep analysis, patience, and strategic thinking… all of which seem to be in short supply at the Oval Office these days. Shame.
Excellent post, David.
But you forget one (and one critical to the IP angle):
Make US patents strong. Make it so that innovators seek to obtain US patents. While (as you point out) the knowledge aspect is not contained within borders, the enforcement (the thing that brings out the “Tr011” boogeyman) is what will draw in innovators into our Sovereign.
China’s leverage was a large and untapped market (hidden though was that market while huge in size was not economically ready for harvesting. To get to that transition point, China played the same low “Factor cost” game that most all developing nations played.
THEN they played the JV game, and strategically strengthened their patent system – and untimely as it has been, our Court and captured Congress and captured Executive Branch administrative agency whined about “Tr011s” and drove the once gold standard of patent protection into the dirt.
There will have to be a certain amount of “reap what you sow,” but the very first thing we need to do is to stop sowing that weak patent system.
In general, anon, I agree with you about US patent enforcement – but I don’t see much connection between the strength of our patent system and the “Chinese IP theft” narrative.
Think of the evolutionary steps during and post-“Pirate” stage.
The carryover is the lure/protection against established interests who could more readily compete on non-innovation factors.
A strong patent system lures the vigor of new lifeblood.
With that new lifeblood comes the secondary effects of innovation to support the initial innovation – truly a virtuous circle.
David, you remind me of that old quote about democracy being the world’s worst system of Government. It was ever thus.
We in the West put our trust in the 2nd half of the quote, to the effect that all the other systems of Government known to Man are worse. Is that still true?
And, if so, what should we do? Do all we can to nourish Democracy, not talk it down, or even piss on it? After all, it is as ever, that: “You don’t know what you’ve got till it’s gone”.
maxdrei, there are plenty of arguments that the U.S. no longer really practices democracy, but rather an aristocracy, in which extreme concentrations of wealth are amassed and then used to maintain and advance the further concentration of wealth.
The signs are everywhere. We’re seeing extremes of wealth inequality that rival those of the 1920s. Practically every administration has promoted deregulation; increasingly regressive tax policy; the dismantling of antitrust laws, social programs, and unions; and the growing influence of PACs on election results. All feeding the trends noted above.
An even more stark picture comes into focus when comparing popular views and government action. Americans overwhelmingly support network neutrality, gun control, drug law reform, Planned Parenthood, and government-sponsored healthcare (or at least something like the ACA) – and yet, the government is either stuck in neutral or operating fully in reverse. The disparity between what the voting public wants and what our elected representatives enact is stunning.
My hope with with the millennials. Time will tell.
David, your folks claim it was the Russians who stole the 2016 election, not PACs, who by the way turned out to be pretty ineffective.
First, I don’t know who you consider “my folks.”
Second, the argument is not that they “stole” the election, since it’s pointless to speculate on the alternative universe where such meddling didn’t occur.
However, it is beyond doubt that they influenced the election, which is illegal – as demonstrated by the indictments. The extent to which certain U.S. parties cooperated, participated, and benefited from such interference – as well as tried to hide it from the American public – remains to be seen, but it’s already looking like the biggest political scandal in U.S. history.
Your folks are the folks who keep looking at nothing and seeing collusion.
Funny that “nothing” has already led to 16 indictments and several guilty pleas. How do you suppose that happens?
Those indictments and guilty pleas were not for colluding with the Russkies.
David, my worries go wider than the USA. I worry about trends today in Europe, which is the origin of Democracy and respect for the Rule of Law. Looking in on the USA, from outside, we can see what’s coming in our direction, over the next few years. In short, ever-widening inequality, till the State eventually collapses. It was ever thus, in every civilisation since pre-history.
See the scholarly book “The Great Leveler” by Scheidel:
link to theatlantic.com
Or read Robert Harris’s Cicero trilogy. I see striking parellels with today’s London, UK. Perhaps you will recognise in it something of DC today. And we both know what happened next, when the Roman Empire collapsed
What to do, to avert the upcoming end of Democracy and the Rule of Law? I have no idea.
How to survive? Start to learn Mandarin perhaps.
Regardless of the cause of the weakness of the Western Empire, the reason it ceased to exist was because it was overrun by barbarians. One hammer blow after another.
Regarding inequality, the Roman Republic was one of the vital institutions of all history; and it was based on inequality of wealth. However, the rich got richer by conquest, and that is what happened — over centuries. This suggests that we have to tie the interests of the rich to the maintenance and security of the state — something that the late Empire did not have. By that time, the rich had every interest in getting rid of the Empire.
Ned,
Your view continues to ring hollow.
MaxDrei,
Interestingly enough, your article would go hand in hand with Joachim’s writings and the VALUE of a strong patent system with both carrot and stick approaches that you seem to completely disagree with (based on your elevation of Prior User Rights).
I suggest that you slog through Joachim’s articles (admittedly not an easy task at times) and see how he portrays the patent system as a rather unique “resetting” mechanism. This may provide some insight to you as to why it has been so deleterious that the US patent system has come under attack from multiple angles and the Strong patent right has been made into a weaker one (and then note exactly to whom’s benefit this transformation of the US system has been for).
Other than that, I would disagree with the conclusion of the article that ONLY catastrophe can serve as a resetting mechanism.
I “get” why that view may be appealing, but I think that it overplays a Phoenix/Ragnarok/Redemption mythology. The article glosses over the seeds of disparity planted in its portrayal of the mechanism of “resetting” and appears to celebrate things that in themselves were loathful (but appeals to the author’s sense of “what is right”).
It also does not approach what a true view must approach: natural equilibrium and the plain fact of the matter that the human population is excessively out of equilibrium on any natural sustainability view. It misapplies one of its prongs (the fourth prong) – and does so badly.
Any treatise that does not address that underlying dynamic is necessarily incomplete.
All in all, the piece comes across merely as one as disparaging democracy, but not offering anything better in its stead.
Who is “Joachim”?
Joachim has been a pretty active poster on this and other blgos for some time now.
Further, his name (and use thereof) is rather unique.
I trust that your question then is not asked with any sense of really wanting to know the answer.
David, my lament about democracy was prompted by your post at #9, but I should have written more, so you could see “where I’m coming from”, namely the democracy called Germany.
Here in Germany it is taking forever to build an Airport for Berlin. Not so, in authoritarian regimes like China or Turkey. For example, the new Istanbul Airport will soon be ready, built in only 4 years, and with only about 400 construction workers per year perishing in on-site accidents. If even Turkey can manage that, what force on Earth can halt The Middle Kingdom’s aspirations and scruple-free determination to be world leader in science and technology?
IP rights? Forget it.
Scruple-free…?
You are revealing more than you think that you may.
“Americans overwhelmingly support network neutrality, gun control, drug law reform, Planned Parenthood, and government-sponsored healthcare (or at least something like the ACA)”
Editor, strike “Americans” and substitute “Democrats.”
No, that’s precisely my point: I mean Americans.
83% of Americans disagreed with the FCC proposal to end network neutrality. (source)
63% of Americans support stricter gun control laws, and 60% of Americans believe the NRA has too much political influence. (source)
64% of Americans favor legalizing marijuana. (source)
78% of Americans support federal funding for Planned Parenthood. (source)
54% of Americans support the Affordable Care Act (vs. 42% opposed). (source)
Compare those metrics for what Americans want with what the federal government is pursuing.
Possibly freed:
Your comment is awaiting moderation.
March 10, 2018 at 8:55 am
David,
Your numbers are hiding spin.
For example, the issue has never been a blanket federal funding for Planned Parenthood, so your “source” number obfuscates the actual issue as can be seen with minimal digging (emphasis added):
“Three-quarters of the public support continuing current federal Medicaid funding to Planned Parenthood to pay for non-abortion services received by people on Medicaid…”
I suspect that spin exists in each of the sources you provide.
You live in a monarchy Max. One that jails ordinary people for saying they don’t want muslims everywhere in the country killing people they consider infidels.
To be clear, to the extent that you can even call your country a “democracy” yours is barely even a democracy at all.
6, Germany is not a monarchy.
However, I think it is very socialistic in that it favors big companies over startups. I expect that crony capitalism is alive and well there, just as it is in the United States.
David, China has been doing this is far as I can remember. Companies like to move manufacturing to China take advantage of costs – from taxes, safety, environmental to labor. But the Chinese require a domestic partner. As soon as the workforce is up to speed on the technology, the partnership is no longer needed from the Chinese point of view.
As you correctly pointed out, England first used patents precisely for the same reason as do the Chinese today – to attract to England skilled artisan’s for the purpose of educating English workers in new skills and to provide England with new manufacturing capability. The some extent, the European guilds that had educated the skilled artisan’s might have felt that England was a pirate nation. But in the end, backward England became an economic powerhouse.
I see nothing wrong with this except with naivety of U. S. companies thinking they can somehow ride the Tiger without being eaten.
To the extent that that the United States does not want its companies to manufacture in China in the first place, we have to figure out how to level playing field so that companies would like to manufacture in the United States instead of China and still make a profit. Lowering taxes and imposing tariffs on imports are two steps in that direction. But the alternative of an action will result in the continued slow drain of U. S. manufacturing and U. S. manufacturing know-how to China and just about everywhere else but the United States.
To an extent, I disagree – because of comparative advantage.
Every nation has limited resources: manpower, skill, materials. It benefits each nation to allocate its resources to the tasks in which it has the greatest proficiency (and efficiency) relative to other nations, to allow other nations to do the same in other areas, and to make up the difference in trade.
Design is hard, and the United States is still ahead in many areas: the iPhone is still the best mobile device in the world, for instance. Yes, other nations are catching up, but we could maintain our specialization and edge by continuing to push the envelope. This is a much better use of our resources than trying to recapture areas that we previously surrendered, like manufacturing – in which we are (a) now far behind and (b) at a major comparative disadvantage.
The current strain exposes some vulnerability: if trade relations between the U.S. and China degrade, well… China can still make stuff, but we can’t exactly eat our designs. We should be countering this not by picking a fight with China, but by diversifying and strengthening our trade partnerships. If we decide to shift away from Chinese manufacturing – for legal reasons or whatever – we should have trade agreements with 20 other nations that could step in to fill the gap (and that would also prefer to take our business away from China).
But all of this requires strategic thinking in trade and economics. Again, it’s just in critically short supply at the moment.
Your “cum-by-yah” is a fallacy David.
It mirrors the sound of “from each according to their skill, to each according to their need.”
Er – no, this is a really basic principle of international trade. Literally dates back 200 years and is nearly universally accepted. It’s the climate change of economics… critics exist, but the overwhelming weight of consensus and evidence puts it beyond question.
The fact that it is poorly understood by many politicians does not make it less valid.
The principle of international trade is to get the best possible – just on an expanded playing field.
There is NO such “to each their own” in the sense that you portrayed (the “cum-by-yah” reference).
You appear to be not able to see past your ideology here.
another one needing liberation:
Your comment is awaiting moderation.
March 10, 2018 at 12:09 pm
Your choice of words in your reply speak more to the kool-aid that you have been quaffing their David.
“the climate change of economics”
Notice how the Liberal Left moved from Global Warming to Climate Change?
Notice that no one – ever – denies that climates change? (that is what climate DOES).
You err here in presupposing that an aspect of a noted difference (that different nations have different resources and different capabilities) turns a descriptive notion into a proscriptive one of what nations must do and then act all out of sorts when that proscription is (rightfully) challenged.
There is NO “overwhelming weight” of ANY proscriptive effect – you confuse observations of the differences with the lamenting about what to do with differences.
We didn’t surrender manufacturing. It was stolen.
Er… how so? U.S. corporations gradually chose manufacturing in China provided efficiencies over domestic manufacturing.
If you mean that U.S. corporations and federal government “stole” the opportunity from blue-collar Americans to work in these jobs, I may agree with you. If you mean that China exerted some form of pressure on U.S. corporations to choose Chinese factories over more economical alternatives – then I’m going to need to see some supporting evidence of that claim.
Yes, I agree that China had more economical alternatives, and they involved wages 10% of American wages, absence of OHSA, EPA, labor unions, etc.
The American companies that chose to open Chinese factories while closing American factories at least still held onto a few manager/salesman jobs. Those who did not went bankrupt.
Silly, China is not unusual. There are many countries trying to get industrial countries to move manufacturing to their lands, offering bribes of all sorts. The problem with China is that it is an enormous country that can use that newfound technological base and the wealth it produces to become a world superpower and threaten the lives and futures of all Americans. This is a problem.
Ned what makes you think that China’s aspirations to be a world superpower “threaten the lives” of “all” Americans? I mean, does the USA as current hegemon currently “threaten the lives” of “all Chinese” just by being a “world superpower”.
What’s the difference? What are you seeing, that I am not?
Of course, being European, I would rather have a multi-polar than a unipolar world.
Max, ever hear a country called England? They always opposed most powerful rival in Europe in order to protect their own security.
Taking a page from history.
SVG,
key words: “that chose”
Some choice. Move operations to China or go bankrupt.
or…. innovate and compete on THOSE factors as opposed to the non-innovation (oh-so-typical) cost factors.
That’s kind of the point of having a patent system, after all.
The Chinese did not get all that business by innovating and patenting, anon. They just took existing technology and use cheap labor and ignored environmental protection, worker safety, etc.
My comment was NOT to what the Chinese did, SVG.
You are correct that the Chinese did a number of things.
However, that point being conceded changes nothing about what we are talking about here.
Your comment of “Some choice. Move operations to China or go bankrupt.” is off because the patent system provides a mode of competition that is NOT based on the non-innovation COst factors (that the typical Big Corp Transnational Efficient Infringer would rather compete on).
Your being correct on China’s past willingness to self-immolate (as to disregard for environmental factors) and play to its advantages of cheap labor change nothing in regards to how the patent system plays into the equation.
You will note as they now emerge with a growing middle class (and losing some of those low Cost Factor advantages) that they are rapidly making their patent system stronger.
You should take note of that – and understand why that is happening.
I agree with David here – the movement was a conscious choice by the juristic persons involved.
David, elitist theory vs. practical reality. If all nations were alike, and we had a stable international government policing the world, elitist theory could be adopted. People would go and live anywhere in the world without loss of opportunity, security, or rights. They could get jobs, plan for the future, retirement, etc.
But the real world is not like that, and is not like that at all. We need to husband our critical resources whatever they are. Manufacturing steel and aluminum is a critical resource.
Even as you would take “elitist” theory and break that down to the people that form the commune – that system simply does not jibe with reality.
In other words, it is not the matter of the subjects being “elite” that makes that theory not sustainable in the real world.
anon, agreed.
Assume a system of worlds where each made something unique and supplied it to all via a system of wormholes. Adam Smith would be happy. But, if the wormholes collapse?
If the wormholes all collapsed, Lincoln would kill all the vampires and Dr. Who’s Tartis would be 3D printed providing everyone all the access points to support a new system.
Or not.
Many more angels on the head of that pin.
David,
Coming to your post from a slightly different angle, part and parcel of the “problem” is that China orchestrated a government/industrial move that largely cannot be (will not be) replicated in the US.
This is due to the US government being at most a subservient “partner” to the industrial powers. By “subservient,” I mean that the industrial powers are the ones choosing how to influence government action (through such “Might makes Right” as the moneyed voices a la Citizens United).
See: link to theatlantic.com
When the corporations are not making the government their lackey, they are going elsewhere (as witness the tax battles of Coke).
A problem here is that corporations are using their “outsized” “voice$” at the same time that their “citizenship” role is immensely weaker than a real person’s relationship of citizenship and duty.
We have let the juristic person overpower the real person.
I do not begrudge that juristic persons should have some legal rights and carry some of the protections that make those legal rights viable.
But it is a sad mistake to turn a blind eye to the differences between juristic persons and real persons.
Those differences should be noted and implemented in legal constraints on the reach of juristic persons. In a vey real sense, when we simply let “Might” to make “Rights,” and we lose the sense of the individual person and that person’s actual inalienable rights, we have turned a blind eye to a critical element of the foundation of the great US national “experiment.”
This too touches on why I have been so adamant on this point of critical formation of this country with Ned.
As to Ned’s comment here, I agree with the historical perspective of the evolution of countries along a vector that early on, the label of “pirate” was often applicable. I would also directly add that early on, this label was applied to the United States as well!
This notion first arose from the guilds.
It is NO mistake that it is those same type of guild entities that today seek to elevate Trade Secrets and denigrate patent systems.
To a guild, ALL innovation (outside of its immediate control) is a threat.
Ned alludes to another point that I would like to emphasize:
“ Companies like to move manufacturing to China take advantage of costs – from taxes, safety, environmental to labor.”
First, as I touched on already, these “cost factor” decisions are made (typically, albeit not exclusively) by juristic persons – corporations. And these corporations are again (typically) of the Trans-national variety, whom simply feel NO “duty” to any one single country.
There is to be recognized a critical difference along the vector of duty between a real person and a juristic person.
This too touches on why Prior User Rights (again – typically something that would be more employed by a juristic person) are fundamentally a B A D thing.
Second: To the extent that the Liberal Left want to force “ultruism” on American citizens (through at least two different avenues: lack of patent exhaustion that drives the average US citizen to float Big Pharma market entry into other national markets through an outsized cost to individual US citizens, and many of the “Climate Change” mechanisms that penalize MORE SO already industrialized nations while turning a blind eye to “disadvantaged” nations (ostensibly, to let them “catch up”), we allow the turning of perhaps decent Ends into self-defeating Means. All the while that the “enemy that is us” tries to “help the world,” they do so in conjunction with vilifying the very individual entrepreneurial spirit that went hand in hand (even invisible hands, a la Adam Smith) with the notions of inalienable rights and a past view that strong patents were a good thing.
You know anon that’s an interesting story in the atlantic, but I note that nobody definitively proved that the guy’s journal was faked or whatever. It’s all just speculation, and a bad citation in a few court decisions (allegedly I haven’t even looked at it).
Nobody even addresses the fundamental argument that the attorneys were making: that corporations had already long enjoyed the benes of “persons” as it was, and if anything that constitutional change was just a codification.
As a single story, I would not be expecting any “hard proof” of the kind that you seem to be looking for, 6.
However, I would not have the takeaway that you have (“it’s all just speculation“).
I suggest reading the article again. The description is not one of speculation:
“Years later, historians would discover that Conkling’s journal was real but his story was a fraud.” pretty much states this in a NON-speculative assertion.
““Years later, historians would discover that Conkling’s journal was real but his story was a fraud.” pretty much states this in a NON-speculative assertion.”
“historians” totally not anti-capitalistic leftists I’m sure.
“journalist” that wrote the story totally not an anti-capitalistic leftist I’m sure.
But yes, I noticed that part as well. They should have dug deeper into that part if it’s so well established, that’s the entire meat and potatoes and dessert of the article, or would be if written by someone half competent. The supposed fraud.
Again 6, you are trying to hard to make the reading into some type of court case – it’s an article, not a court case.
” it’s an article”
More like propaganda but somewhat true.
No 6, this is not to be confused with propaganda.
If you feel strongly about the nature of the items listed, perhaps you can follow up with the authors.
As is, I just do not see your “counter points” having much substance. Do you have anything other than feelings as to why you want to challenge any of the statements in the article?
Anon: Herp I can’t see how an article that attacks the very foundations of legal protections for corporations (protections in a thousand ways) as being absurd/a lie is propaganda Derp.
Ok bruh. I’m not going to bother to point it out for you, you’ll figure it out eventually. Friendly reminder that there are actual people that want the state to own everything.
No one is saying that a juristic person is one that does not get ANY protections, 6.
Try reading what I have stated before you go into the weeds and project what you think that I am saying.