Patents, Copying and IP Protection
By LARRY ROMANOFF – October 01, 2020
The area of IP protection is
one that deserves more international attention by voices other than American
ones. American belligerence on the subject
notwithstanding, IP and patents are neither a religious nor a moral issue, but
are inherently a cultural matter that should never have been permitted to
become so embroiled in legalism. China's
pluralism makes it much more a kind of 'open-source' or 'public domain'
society, while the Americans live in a black and white world where - back
to Galbraith - individuals have a higher standing than does society as a whole,
and where private wants and ownership are inherently superior to those of the
public good. It isn't that the Chinese
have no patent laws, nor that China's government or the Chinese people don't
respect 'intellectual property rights'; it's just that their pluralism gives
them a very different perspective of society's priorities. The Chinese have
much less concern about the absolute ownership of ideas, concepts and
creations, much like you telling me a humorous story and not being offended if
I fail to credit your 'ownership' when repeating it to someone else. This is
not a moral failing but just a different way of looking at the world, and there
is no basis on which we can claim the American way is morally 'better' than
anyone else's. In fact, China's approach is true of much of the world, mostly
the parts that are not politically Right-Wing and embroiled in Christianity.
In
China, when someone sets about commercialising a new product, many other people
may be taken with the idea and do the same, and in the resulting flurry of
activity we have true competition, rapid evolution of ideas and products, and
the greatest resulting social good. To the extent there is any social utility
in the creation, it will have been expanded to the maximum by virtue of the
Chinese system, and society as a whole will derive the most benefit. The first
attempt in the invention of any new item will almost certainly be primitive and
not fully formed. It is precisely at this stage that the thoughts and ideas of
many others can contribute to a desirably short evolutionary process, creating
a multitude of improvements that would never otherwise occur, as we saw when PC
architecture became open-source.
In
2012, the Atlantic magazine reported on a group that called itself DIY Drones,
which was an online community of individuals working without pay in their spare
time, and who produced a UAV that possessed 90% of the functionality of the US
military's $35,000 Raven drone, but which could be produced for $300. The
article ended by noting that this result was typical for open-sourced projects that
were not limited by the multiple self-serving restrictions and legalities of
the American individualistic IP and patent system.
And
this development is precisely what the American system now prevents. In the American way, nobody benefits except
the one person who created the original because the focus is on the individual
rather than on society or the overall good of the nation. American claims
about fierce IP protection fostering creativity and competition or creating the
highest good, are complete rubbish belied by all the facts. We need only open
our eyes and look. This is just one more example of the utopia syndrome in
action, where false ideals are substituted for reality.
Americans
obtain patents, copyrights and registration not only for an original idea, but
have also succeeded in patenting what they call the "look and feel"
of an item. Consider a hammer: to be effective and useful, this tool can have
only one 'look and feel'; if the look and feel is totally different to escape a
claim of patent infringement, it will also be useless. In the US system, if an
American were to patent a hammer and its look and feel, no other person would
be able to design or produce any kind of hammer without paying extortionate
royalty fees to the inventor. How does this fit with the American claim that
their brutal pursuit of IP protection is for the purpose of fostering
competition and innovation? In fact, it prohibits all competition and
terminates innovation. How can it be otherwise? The same pattern is true for all
American patents and inventions, and the claims of high-sounding morality are
just rubbish propaganda and 180 degrees from the facts. If you think my claim
too strongly-worded, please explain to me the benefits to society and the
encouragement for innovation and competition when the US system permits Apple
to patent "a rectangle with rounded corners".
Chinese society, by contrast, is much more
about the group, the family, the community, society and the nation, and it is
difficult to argue that this is not the best way. Why should the interests of
one individual take precedence over those of the community or of society as a
whole? American individualism is
ideology and religion, not a law of the universe. There is no valid moral
or philosophical argument to support this American position of the supremacy of
the individual, and their belief in it does not make it true. By contrast, it
is very easy to argue that the reverse should be true - that the interests of
society will almost always trump those of the individual. This means China must develop its own laws relating to
things like patents and copyrights which accurately reflect the culture and
traditions of China and its people. Regardless of the forceful US political
push, it would be senseless and a betrayal for China to relent to US pressure
and duplicate US IP laws. Those laws were created for, and enacted by,
Americans, according to their society and supremacist ideology, and no valid
reason exists for these laws to be promulgated worldwide. It is really only
recently that China began to enact copyright and patent legislation, not
because China is backward but because the matter was not so important to the
Chinese as to Americans. The US complains that IP is not adhered to as
rigorously in China as it would like, and superficially that may be true but
the reasons are worth examining and understanding. The current heated IP
environment has been fostered by the extremism in both American society and
US-style capitalism, further stoked by US delusions of world domination of the
entire IP universe. This is a case where once again the Americans are
attempting to choose the game everyone will play, then set all the rules and
determine how the score will be kept.
The proposed universal
extension of US copyright law to all nations is not to protect a nation's
domestic creativity, but only to serve the interests of deep-pocketed European
bankers and their large corporations who will use each nation's courts to
stifle innovation and eliminate competition.
Individual designers, writers and inventors rarely can enforce copyrights or
patents, and are at the mercy of the large multi-nationals. US laws on patents
and copyrights are very different from those in most nations and are used
mostly as weapons to prevent competition from new players, and indeed we have
seen many instances in China where American firms have abused their rights to
extort money from, or gain power over, smaller domestic competitors. While
large companies with big legal teams can (and do) patent even trivial
innovations, small companies struggle to contend with the legal fees,
procedures and other roadblocks even for major inventions. And even then, the
large players will either kill the innovation outright or force a sale. Again,
this is not fostering creativity and competition, but domination. These large
firms often attempt to create a kind of defensive wall around a useful
discovery by filing for hundreds of patents on every tiny part of a product to
prevent anyone from even attempting further development. If Apple were a car
manufacturer, they would sue other firms for having round steering wheels. And
in fact, Apple did almost precisely that. They obtained a US patent on "a
rectangle with rounded corners", then sued Samsung for violating their "invention"
and IP. In spite of all the American
propaganda to the contrary, this process serves only to eliminate innovation
and competition, not to encourage it.
Patents
were originally granted to a designer or inventor to give him a short time to
profit from his creation, either by commercialising it himself or by selling
his rights to other parties. The protection under these patents was granted for
only three years, and even then only for products that were deemed to be
"of social value". The creation of yet another shampoo had no
protection at all. Those original stipulations make a great deal of sense even
today. We can argue that an inventor should be given a bit of time to profit
from his handiwork only if his invention is useful to society. Most 'new'
products today are not. Patents were never intended to perpetuate royalties for
Barbie's plastic breasts or to permit the US-based courier UPS to have
perpetual legal protection for the charming excrement color of UPS delivery
trucks. Copyrights to written or artistic material are essentially the same,
and in the US this has been carried to a ridiculous extreme, to the point where
Disney has had its copyrights extended for what I believe will total some 120
years, but if Disney didn't milk enough money from the world's bank accounts in
the first 60 years of "protection", I see little justification for
giving them yet another 60 years to continue trying. And in any case, how does
giving an additional 60-year copyright to a dead man encourage competition or
innovation? American ideology tells us
that US patents and copyrights are necessary and valuable because they protect
the originator of a work and encourage competition and innovation. Both claims
are false. The only purpose of American patent and copyright ideology is to
ensure that no competition ever occurs, stifling product evolution in the
process. As with almost everything else, the Americans never know when to stop,
and obsessively push things to a ridiculous extreme.
Most
people are aware that the Mattel Corporation owns the 'Barbie' brand of dolls.
A few years ago in Canada a young woman named Barbie opened a small clothing
shop named "Barbie's Store". The honeymoon was a short one. The shop
had barely opened before a swarm of Mattel's lawyers swooped on this
unsuspecting young woman with enough lawsuits to terrify Attila the Hun, and
enough potential expense to intimidate the Bank of England. Fortunately for
Barbie (the live one), a Canadian court threw out Mattel's claims of IP theft,
brand infringement, loss of income and value, etc., and awarded the real Barbie
recovery of her court costs for what was seen as a vicious and unjustified
intimidation example of US corporate terrorism. These examples are common and
not all end happily, but we need to ask where was Mattel's devotion to
competition and to increasing innovation and creativity?
MNC's
are often surprisingly belligerent in defending their copyrights or logos even
when no apparent damage exists, and are altogether vicious in even small instances
of actual infringement. It's primarily the Americans and companies from a few
politically Right-Wing countries who have this rather savage approach to
intimidating competitors while flying a flag of morality. Disney is one of the
worst for pursuing anything it imagines as a violation of its IP. One thing people need to know about the
Disney Company and its executives is that the nice man who draws the cute Bambi
cartoons is not the same rotten son of a bitch who calls the lawyers when you
appear to have copied one of those cartoons. But not all humans are
American. In early 2014, a Chinese father produced an accurate scale model of a
Lamborghini for his 6-year-old son to drive. Lamborghini said they were
flattered and had no intention of prosecuting the man, even though his work was
technically an IP violation.
Copying
is not sinister, immoral or evil, but simply part of a natural human process
with stages that almost every individual, company and nation will experience. Consider
this:
Let's
assume I have a supply of good clay and want to make teapots. My first attempts
will most likely be amateurish and primitive, and quite possibly pathetic. As I
persist, it readily occurs to me that my task would be much easier if I had a
model to work from. I therefore find a teapot, or a photo of one, and attempt
to reproduce whatever is represented by my model. I am copying. Eventually, I
acquire enough skill and know-how to repeatedly duplicate this one item in
acceptable fashion. I then proceed to other models - copying again - and
acquire more knowledge, skill and know-how, until I eventually master the
processes from initial design to forming, and from firing to glazing. At some
point in this process, I begin to lose interest in copying things others have made.
I now have sufficient skill and confidence to step out independently and begin
to create my own designs and perhaps to even refine methods and materials. I
may even discover something new. I am now a master in my own right and no
longer have need to look elsewhere for ideas or designs. If we think about it,
this is what we all do, with each new thing we try. We look to see what others
have done before us, and attempt to duplicate their actions or results. This is neither immoral nor deserving of
admonishment; it is a perfectly human process. And when we eventually
acquire sufficient skill to become creative and innovative, there is nothing
especially moral or praiseworthy in our actions. It is simply part of the
process.
And let's be realistic. Some
copying is harmless, and some is not. The
young girls who buy the $5 pink Gucci wallet made of 'real leather' are not
prospective Gucci customers, at least not today. They would not, and could not,
purchase the genuine items anyway, so Gucci is not losing any sales. And one
could argue that this is little more than one kind of free advertising for
Gucci. And yes, it's wrong to use the name, but in the overall scheme of things
the amount of harm done is exceedingly close to zero. On the other hand, to
copy another person's work down to the last fine detail and attempt to pass it
off as a genuine item, is another matter involving the legal definition of
fraud.
In
early 2013 the China Daily carried
an article on innovation in which the writer claimed that despite leading the
world in patent applications, China was
still far from being an innovative country. Shanghai's IPR College claimed
that only by increasing what it called "the technology transfer
rate", the frequency with which academic research can produce inventions
that succeed in the commercial marketplace, can China stake its claim as
"a creative country". An official of China's State Intellectual
Property Office said that the growth in patents proved that Chinese were paying
more attention to intellectual property and used this as evidence of China
"making great strides toward becoming an innovative economy". All of these statements are untrue and
unfair, reflecting not an understanding of creativity and innovation but merely
pollution from American propaganda and so-called values.
The
so-called “technology transfer rate” is a Jewish-American disease that should
not be permitted to infect China. A
university exists to educate our young people in important aspects of knowledge
and life; it is not an incubator for corporate profits. Philosophy and
logic, culture and history, languages and humanity, have disappeared almost
entirely from American universities because of this disease. China cannot betray its own people by
following the Americans in a race for profitable patents.
It is disturbing to watch
the progress Americans are making in inflicting their warped capitalist values
onto Chinese society. It is the US that concocted
the idea of using academia for commercial and military research, with both the
large multi-nationals and the military extensively funding university research
departments and projects, but this thrust had little to do with a desire for
creativity or innovation. It was primarily a drive to discover new weapons of
mass destruction, nothing more. I have described elsewhere the fact that MIT
was created entirely for the purpose of military research and for most of its
life was funded almost entirely by the US military. And it is only the US that has perverted its institutions of higher
learning into mere incubators of commerce, whose major purpose today is not to
educate but to groom unwitting students into priests for Goldman Sachs and
missionaries of predatory capitalism. There is nothing here about
creativity or innovation within the common meaning of these terms. Innovation
in the US today is a badly-perverted concept.
There
are probably thousands of ways to measure creativity and innovation. Patent
application numbers are far from being the most important metric, and many of humanity's most important
discoveries cannot be patented. The irrational focus on patents is due
entirely to the intense US pursuit for legal control and domination of industry
sectors, evidenced by their determination to patent everything including the
human genome and extending their copyrights to 100 years. This is not about
innovation; it is about domination. It
is true that China must patent its discoveries in all areas, perhaps especially
in Traditional Chinese Medicine, not from a drive for innovation but to protect
China from the predation of American and other firms. This is not creativity,
but self-defense. And self-defense is necessary because the Americans have
become crazy, to the point where they are attempting to patent the human
genome. Each time they decipher a portion of the DNA code, they try to patent
it so no one in the entire world will ever be able to do anything genetic
without paying royalties to either the bankers or their MNCs. The medical
profession used to share widely all information on new methods of treatment or
surgery, but no more. The Americans are
now patenting hospital operations and their methods, with the intent that if a
surgeon anywhere in the world wants to perform an operation he will have to
obtain permission and pay royalties to some banker or hedge fund.
The
above article went on to say that while Huawei led China in the number of new
patents it failed to make Reuters' list of the top 100 global innovators
because all the measurement criteria were patent-related, including the
"influence" of one's patents evidenced by their being cited in
journals and "the global reach" of one's patent portfolio. This is
hardly surprising. It is just one more case of the US moving the goalposts and
revising the scoring system to ensure they win the game. When the US was
leading the patent game, the metric was numbers of patents; when China
surpassed the US on this metric, the Americans quickly moved to much less
measurable nonsense metrics like the "influence" of patents and their
"global reach", and the number of times a patent was cited in some
(American) publication. And of course the Americans continually adjust the
meanings and definitions of these terms to ensure they win the game.
Again,
it is true that China must, entirely for reasons of self-defense, patent
everything within reach, because the Americans with their new TPP are
effectively declaring war on the world and exercising an intense determination
to force the entire globe to accept US supremacy in the definition and control of
intellectual property. But the Americans are not the whole world; they are only
4% of it, and both their ambitions and greed need to be resisted. The worst
thing China can do is agree to play a game where the rules are so one-sided
that the opponent is virtually assured of victory. But self-defense is not
innovation and patents are more about control than about creativity.
The
above article also stated that of the millions of patent invention applications
filed in China during the past 25 years, about 40% were filed by foreign
multinationals and only about 30% from Chinese firms. And this is a much more
important place to focus attention than on adopting American values or playing
the US innovation game. Chinese individuals, especially those involved in research,
should make every effort to ensure that their work and the eventual benefits of
their work will flow to Chinese firms and to the overall benefit of China. China absolutely cannot afford to have its
best and brightest individuals invest their future in producing inventions that
US firms will then use to take advantage of China.
In
recent news reports, officials of the (US-created) World Intellectual Property
Organization and the UN stated that China was "moving in the right
direction" by agreeing to establish dedicated courts to resolve IP
conflict cases, stating that this would "promote the protection of
intellectual property throughout the world", a claim that is largely
nonsense. Whenever praise emanates from
the West, it is a sure sign that the person or country being praised is in the
process of making a big mistake. Every nation has provisions in place to
protect those elements of IP they believe are important, but they apply these
provisions to themselves only. What is happening now, and the reason the US has
a problem with the world in the area of IP protection, is that it is attempting
to force its rules, values and system, including these dedicated courts, onto
an entire planet that doesn't want them. The
US is attempting to bully every other nation into accepting a system of rules
designed solely for its own benefit. It would be tragically naive for
anyone to believe American claims that their methods reflect what AmCham is so
fond of referring to as "best practices". In fact, these practices
have been shrewdly designed to entrench the US and its commercial enterprises
in a position of supremacy to the detriment of every other nation.
And
it isn't only the simple matter of establishing a court dedicated to a single
purpose. The Americans are already hammering officials in many parts of China's
governments and agencies to accept US values and parameters for the rules and
methods of operation of these IP courts, to ensure that judgments will be made
according to American preferences and 'values' and that the final advantage
will always accrue to American firms. It shouldn't be necessary to state that
the Americans should be firmly excluded
from playing any part in the design of these courts because their input will in
no way reflect any "best practices" that would be to China's benefit.
The reason the Americans are now so intensely bullying Asia-Pacific nations to
sign the IP portion of their TPP is that they hope to have irrevocable
agreements in place before these nations realise the extent to which they have
signed over their sovereignty to American multi-national firms. From what I can
see today, the dangers of dealing with the Americans on any aspect of IP are
still not all in the clear. There is still much of their intent that is hidden,
and any decision regarding IP, including the dedicated courts, should be
delayed until all is in the open.
Today,
the entire American drama about IP is just a cheap attempt to export US
so-called "rule of law" as part of a colonisation process, looking to
force a foreign ideology onto other
nations and to achieve cultural and commercial domination through the use of
intellectual property rights. And it does so while continuing to conduct
both state and corporate sponsored industrial espionage on a grand scale,
certainly the largest scale in the world. These American colonisation efforts
are disastrous because they often force weaker states to abandon the industrial
and agricultural policies necessary for their own development, while the US
continues to heavily support its own agriculture and industry at home. The US
uses economic, military and political coercion to enforce a uniform commercial
ideology that will ensure the perpetuation of economic dependence and poverty
in other nations.
In
one of the many efforts to denigrate China and perhaps also in an attempt to
derail China's progress, the European Chamber of Commerce in China - no doubt
as a favor to their good friend AmCham - produced a report trashing China's
patent progress. From this study, we learn that China's desire to move from a
"made in China" to "designed in China" economic model
"will curtail innovation standards", meaning that the more new things
you invent and patent, the less innovative you are, and that China should
really forget about designing and stick to making. The study further dismissed
China's success as "overhyped", claiming that the country's patent
applications have come with a price in quality, the Chamber having defined many
of China's patents as mere "utility models" or "incremental
developments that can advance an existing product but rarely result in
technological breakthroughs". European
Chamber Secretary-General Dirk Moens moaned with disappointment that
"This is not in the right direction." The study further informed us
that one cannot drive or force creativity, but only nurture it",
suggesting that China should back off its drive to discover and patent new
ideas and shift from "innovation" mode to "nurture" mode. Of course, the volume of China's patents
might fall to zero, but then that's the plan. And in any case, it is the
Americans who specialise in the so-called "utility" patents, which is
how they create their defensive walls of hundreds of patents surrounding every
useful product in attempts to forestall any evolutionary development without
the collection of exorbitant fees.
But
then, another gentleman, Elliot
Papageorgiou, an intellectual property expert at Rouse Legal in Shanghai,
permitted a bit of sunshine into this room when he said that utility model
patents were good for China. "In developing economies, you're not going to
get a new wheel, you're going to get an improved or cheaper wheel." And
that is precisely correct. The entire business of inventiveness and the
eventual appearance of patent applications, like so many other things, is
simply part of the process of development of a nation. At different stages of
development, nations exhibit different characteristics appropriate to that
stage and it is both ignorant and foolish to directly compare two nations at different
stages, and especially to assess moral judgments. Comparing China today to the
US or Germany today is silly; comparing China today to the US 50 or 75 years
ago might be appropriate. National development is a process, not an event.
Someone needs to tell Dirk Moens.
We
have also seen floods of accusations in the US media about China
"stealing" American IP. This multitude of articles is always long on
claims but surprisingly short on facts. Indeed, I have yet to see a valid case
where the Government of China or one of its agencies "stole" IP or
anything else. So "China" isn't stealing anything from anybody, and
it isn't China's NSA so heavily engaged in industrial espionage. It may be true
that some Chinese companies have illegally or otherwise copied US products or
technology, but then this happens constantly within the US itself, witnessed by
the steady stream of claims and lawsuits about IP infringement. In fact, the
only reason Microsoft is alive today is because Bill Gates stole the 'Windows'
concept as well as the mouse, from Apple, and had sufficient financial
resources and political connections to eventually get away with it. The moral
outrage exhibited serves to make good theatre, but most cases are based on
legal opinions in which courts could easily decide in favor of either party. In
most cases, these are not moral issues or criminal ones, but questions of
interpretation of contract wording and application of civil law. All
multi-national companies copy each other by studying each other's patents and
publications and look for loopholes to justify copying, and not always legally.
They see no shame in this, and do it routinely, which is why most patents and
products are virtual duplicates of each other.
Regarding
inventions and innovations, China has been forced to do its own research and
make its own innovations in key areas since about 1950 because of a
US-engineered international boycott on almost all useful products and
processes. China accomplished all its rocketry and space technology, its
nuclear ability and so much more, not only independently but beginning from a
third-world industrial base. Today, with its science and technological base so
much more advanced, and with its increasing emphasis and expenditures on
R&D, China will produce many more inventions and innovations. And it should
be pointed out that these successes have been accomplished independently of
'freedom' or 'democracy', which in any case contributed nothing whatever to
Western inventions.
In
any case, a single Chinese firm committing an offense is not a valid reason to
condemn the entire nation as the Western media are so fond of doing. It also
should be said that Chinese firms are also victims of these same acts by
American firms, the only difference being that the US media suppress the
information and Americans hear only one side of a two-sided story. We also hear
many reports that China fails to protect the IP of American firms, permitting
Chinese companies to freely copy American IP. But these reports are often flame-baiting,
intended to mislead readers, because China's domestic IP system provides
protection only if that IP has actually been registered in China. In many
cases, foreign companies have failed to register their patents or copyrights
and cannot therefore claim infractions or violations. The media neglect to tell
us that the US doesn't recognise foreign patents either.
*
Larry Romanoff is a retired management consultant and businessman. He has held senior executive positions in international consulting firms, and owned an international import-export business. He has been a visiting professor at Shanghai's Fudan University, presenting case studies in international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai and is currently writing a series of ten books generally related to China and the West. He can be contacted at: 2186604556@qq.com
Larry Romanoff is one of the contributing authors to Cynthia McKinney's new COVID-19 anthology ''When China Sneezes''.
Copyright © Larry Romanoff, Moon of Shanghai, 2020
