Patents, Theft of Intellectual
Property (IP), Product Piracy and US-China Relations
By Larry Romanoff,
December 17, 2019
There is one factor that contributed heavily to the
wealth of America today that US history books seem to neglect. The US
government and corporations today produce volumes of propaganda accusing China
of copying American products or ideas, of having no respect for American IP, but
the Americans for 200 years or more have been the world’s masters of IP theft
and product piracy.
During most of the nation’s early existence, American
companies freely and without compensation copied everything that was made in
Europe. Not only did they freely copy, but the US government erected impossibly
high tariff barriers against foreign products, so that the originals from
Europe would be too highly-priced to sell in America, while manufacturers of
the local copies of course flourished. Moreover, as far back as the late 1800s,
the US government often offered cash rewards of US$20,000 to US$50,000 – as
much as the earnings of several lifetimes – to anyone who could steal and copy
foreign technology, as happened with the cloth weaving machines that were the
backbone of British industry for a century.
When the great American Thomas Jefferson was
US Ambassador to France, he conspired to steal and smuggle out of Italy a
strain of ‘miracle rice’ which was banned for exports and sales to foreigners.
Jefferson was a brave man because, diplomatic immunity notwithstanding, the
theft was punishable by death had he been caught. This theft process was true
with almost every imaginable item. Many English authors despaired of ever
selling their popular written works in the US, due to import regulations and
high duties but, on travelling to America, were more than surprised to discover
their books widely on sale in shops everywhere. When Charles Dickens discovered
the extent of the piracy of his works in the US, he wrote a book condemning
Americans as thieves, a book which was immediately pirated and offered for sale
everywhere in the US.
For most of 200 years the US ignored the IP, the patents, the copyrights, of any person or company in any nation. The truth is that Americans, as Americans, have never invented much of anything, their only domestic creations being hardware that could kill more people faster and from a greater distance. But now being the engineer on the IP train, American firms have suddenly gotten religion and become sanctimoniously possessive, condemning others for precisely the same things they did so freely for so long.
Stephen Mihm wrote an excellent book in which he deals at length
with 200 years of American patent and copyright violations and widespread IP
theft. He perceptively recognises a “fast and loose brand of commerce” as
simply a stage in a nation’s development, a stage which the US experienced in
the same way that Japan did 30 years ago and that China is doing today. It is
only the moralistic Christianity pervading American society that drives
Americans to condemn China today for something they did so freely not very many
years ago, and which they still do today. In truth, the US was by far the
most rampant thief of all nations in the world’s history. (1) (2)
One American columnist wrote that if it were Europe or
Asia that produced all those Hollywood movies, the US would very quickly find a
way to reproduce them at home without paying royalties or recognising any IP
rights. There is more than ample evidence that the US even today will freely
copy anything it wants, while ignoring other nations’ claims to copyright or
patent.
This is another of the prime reasons the US became a
rich nation – because over two centuries it copied, stole, or took by force,
much or even most of the world’s inventions, recipes, patents and processes,
while refusing to permit imports on any reasonable or fair terms, thereby
enabling America and its corporations to prosper at the expense of the world. There is little to be proud of, in America’s
inventiveness or innovation. Few Americans today are aware of this part of
their nation’s history because most of the perpetrators are now dead and
because their history books have all been nicely sanitised – cleansed of all
the facts of piracy, forcible theft and dirty tricks that are so much a part of
the American legacy.
The US media have constantly accused the Chinese of
using copied or unlicensed American software but, while some claims were no
doubt valid, the picture of America being a hotbed of morality while the rest
of the world consisted of thieves is patently false. Software copying
originated in the US, not in China, and I can testify that unlicensed
commercial software has always been in widespread use by corporations and
governments in North America. Microsoft and many other firms have had this
problem even with many branches of the US government and the military, and US
corporations of all sizes installing many tens of thousands of copies of
unlicensed software without paying the license fees. The US media ignore these
stories, preferring to write about China.
As one example of many, in November of 2013, a US firm
named Apptricity was planning to sue the US government for $300 million for
unlicensed copying and installation of the firm’s software. Apptricity
supplies the US military with logistics software used to track the locations of
troops and critical missions shipments. The license fees are $1.35 million
for installation on each server, and another $5,000 per computer using the
software. But it seems the US government had installed this software on almost
100 servers and almost 10,000 individual computers without telling the company
and without paying the necessary license fees, and had been doing this for more
than ten years (3). The company’s total loss in fees alone was more than $300
million but the military bullied the company into accepting a settlement of
only US$50 million. According to the company, “As on every other known
subject, American pronouncements of moral superiority are all just hypocrisy”.
More than this, Americans have no shame in claiming
credit for the inventions of others. There are hundreds of examples, a current
one being the military stealth aircraft of which Americans are so apparently
proud, and to which they repeatedly refer as evidence of their superior
innovation ability. But stealth technology is just one more thing the Americans
stole, in this case from Germany. At the end of the Second World War, US
troops arrived in Berlin well in advance of the other Allied forces and wasted
no time in looting the nation of all commercial and military secrets. By
the time the Allies arrived in Berlin, the US military and government had
packed up and shipped home more than 1,600 tons of documents on science and
physics, nuclear energy, countless commercial patents and processes, and the
German military’s research on stealth aircraft technology.
The US stealth aircraft today are a virtual copy of
what the Germans designed and invented 70 years ago, from the shape and
configuration of the fuselage, to the coatings, engine placements, everything.
The engines of course are modern and different, but all of the science and
technology, and most of the know-how was simply stolen from Germany. Similarly,
the F-86 Sabre jet was built using design principles stolen from German
aerodynamic research. It was German IP, not American inventiveness, that
permitted Americans to boast about this famous aircraft holding world speed
records for years. Also, much of current US aircraft technology was taken
from the Canadian Avro Arrow, which was the first supersonic aircraft of
its kind. Many Americans today claim some of this technology was American, but
the truth is that the Canadians at the time had no wind tunnels and had
contracted to do their aerodynamic testing in the US, following which the
Americans copied – and stole – all of it.
America’s entire space program resulted from
information stolen from Germany and from the post-war importation of thousands
of Germans – many of whom were known war criminals. Werner von Braun and countless people like him who had invented all of
Germany’s missile technology were brought to the US with all their knowledge of
rocketry and missiles, to help put America into space. It is absolutely true
that the US could never have managed any of those feats without the technology
and know-how stolen from Germany. American inventiveness is mostly a jingoistic
myth created by the American propaganda machine.
The US did the same to Germany after the First World
War. As part of the conditions of surrender set in the Treaty of
Versailles, Germany was forced to surrender all its patents to the US, in every
commercial and military field, from fabrics to printing inks, from rockets and
missiles to tanks and vehicles. Much of everything that Germany knew,
designed, created up to that time, was surrendered to the US military and US
commercial corporations. Countless German patents, including things as common
as Bayer Aspirin, were seized by the Americans. This is copying and stealing –
by military force – on very grand scale never before seen by any country. The
US did the same after the collapse of the former Soviet Union, approaching
former Soviet satellite nations as comrades in arms with the purpose of looting
everything available, especially anything with military value.
Kodak and Polaroid might be American firms, but their
IP was virtually all German.
Without those IP thefts they might well have disappeared generations ago. I
believe Intel also benefitted enormously from German semi-conductor research.
American aircraft manufacturers like Boeing likewise owe much of their
existence to stolen German IP. Interestingly, US automakers were so busy
selling fashion accessories it apparently didn’t occur to them to steal foreign
IP until it was too late.
An example from another category is the antiviral
drug Tamiflu, which controls the spread of influenza, and which was
patented by Hoffman LaRoche. The active ingredient in Tamiflu is
extracted from star aniseed, which grew only in China and had been used there
for several thousand years as a TCM prescription. There were many unhappy
people with that pharma patent, since it was seen as effectively entering
China, copying a Chinese medicine and claiming the worldwide rights to it. The
same was true with ephedrine, a plant drug now widely used for treating colds,
which was common in China for many centuries and introduced to the West only
rather recently, but now patented by Western pharma companies.
Coca-Cola, originally called Kola Coca, was invented more than 140 years ago in a small town
in Spain, the creators of the formula for the world’s best-selling soft drink
having been cheated of its ownership and billions of dollars. The process was a
well-kept secret at the time and quickly became a world-famous product, winning
dozens of international gold medals and other awards. Unfortunately, Bautista
Aparici, one of the company’s founders, attended a trade fair in Philadelphia
and gave a sample and a brief description of the process to an American he
happened to meet, and a short time later US pharmacist John Pemberton
changed the name to Coca-Cola and patented the product and process, the US
government refusing to recognise the original Spanish patent.
Nike is another famous American brand with an
airbrushed past, based on a similar manner of IP theft as was Coca-Cola, and
benefiting equally from the American government and judicial system. Phil Knight was a runner at the University of
Oregon, with Bill Bowerman as his coach, both on the lookout for better
quality running shoes. Knight was on a tour of Japan when he discovered the
Onitsuka Tiger running shoe, a product far superior to anything available in
the US at the time. Knight and Bowerman borrowed some money and placed an
$8,000 order which quickly sold out. The two men then began making Onitsuka’s
shoes in the US, selling the designs as their own. An Onitsuka executive, on a
surprise visit to the US and to Nike’s premises, was himself surprised to
discover his firm’s designs in the warehouse with an American brand on them.
Naturally a major court case ensued, with the US courts, always committed to
fair play and religiously following a rule of law, ruled that Knight and
Bowerman did no wrong and that the two companies could “share” the patents, the
IP and the brand.
American companies didn’t always steal from Europe or
Asia; sometimes they stole from each other. Microsoft today might be only a bit player if it
hadn’t directly stolen the ‘windows’ and the mouse concepts from Apple, and
hadn’t had sufficient financial backing to pay for litigation until Apple was
finally ground down and lost.
In spite of all the hypocritical noise made today
about China, the US is still one of the worst violators of IP in the world, making its own rules to benefit American corporations
and stubbornly ignoring the IP legislation and practices of other nations. The
Americans more or less invented brand advertising and jealously guard their
brands, but there are entire categories of famous names, products and
proprietary processes originating in other countries that the Americans refuse
to recognise even though they are fully protected in the other 96% of the
world.
These are not oversights; the US government
deliberately establishes its own rules as to which kinds of IP it will respect
and which it will ignore, with the rules always designed to benefit only
American firms. Any IP that doesn’t fit US political and commercial ideology
will simply be ignored. These names and processes have been protected by laws
and treaties in all developed nations and most undeveloped ones for more than
100 years – except by the Americans who adamantly refuse to sign despite
repeated requests dating back more than a century.
These products include French champagne and cognac,
Burgundy, Rhone and Chablis wine, Italy’s Chianti, Portugal’s Port and Madeira,
Spain’s sherry and Hungary’s Tokay. They include Japan’s Kobe beef and Italy’s Parmesan
cheese, and of course virgin olive oil. There are more than 600 of these
specialised registered copyrights for which the US permits its corporations to
violate all international copyright laws and profit illegally from the use of
famous names. Champagne, by both French and international law, is a name that
can be applied only to a wine produced by a particular method in the Champagne
region of France. But not according to the US, whose winemakers gleefully sell
US ‘champagne’, in clear violation of their claimed standards and of
international laws. On the other hand, anybody printing “Florida Orange Juice”
on a product that isn’t from Florida, will meet the full force of US law.
European patents on wine or cheese are not valid in the US.
One of the world’s most famous cheeses is Parmigiano
(Parmesan), from the Parma region of Italy. The cheese, the cows, the
ingredients, the methods and processes, even the animals’ feed, are patented,
trademarked, registered and protected by both Italian and international law –
except in the US. American firms produce a pathetically substandard version of
this cheese and market it as ‘original’ when it is no such thing, their
violations protected by their own government.
Bloomberg did a recent study of grated cheeses, and many
brands, including Kraft, tested for high cellulose content – cheese made of
wood. Michael Mullen, a Kraft spokesman, said, “We remain committed to
the quality of our products”. One company whose cheese tested high for
cellulose content said, “We strongly believe that there is no cellulose present
in our cheese.” Another company with high wood pulp content said, “We think the
test could have been a false positive.”
There was a company named Castle Cheese in Pennsylvania
that marketed fake cheeses for 30 years before the FDA caught up with them and
discovered their “Italian Parmesan” was actually imitation cheese containing
cellulose from American trees and leftover rinds and trimmings from other fake
American cheeses. But the American Cheese Association claimed, “The
wholesomeness of our dairy products is a treasured part of our story”, and one
media report wrote, unbelievably, “[American] Parmesan suppliers have been
mislabeling products by filling them with “too much cellulose”, made from wood
pulp, instead of using cheaper cheddar.” If we’re talking about Parmesan
cheese, I would have thought anything above zero would be too much cheddar, to
say nothing of cellulose, but then this is America, and things are different
here. So, genuine Italian Parmesan cheese, made in Wisconsin with wood pulp
from Idaho trees. No IP problems here. And no food adulteration like we have in
China.
Olive oil is one of the culinary delights of the world, something that has been produced for centuries in
Southern Europe and the Middle East, with processes that have long been proven
to produce the best product. The most valuable oil, which we call “Virgin Olive
Oil” or “Extra-Virgin Olive Oil” is produced by a gentle cold physical pressing
of the olives done in a particular manner. The oil that flows from this ‘first
press’ is rather thicker, is a dark green color, and is the most fragrant and
tasty, and the most healthful. Virgin Olive Oil carries a substantial
financial premium.
But the US has its own rules here too. American
species of olives cannot meet international standards, being grown in a climate
not especially suited to this fruit, and produce only a poor yellow oil – which
is almost invariably adulterated with inferior and leftover vegetable or seed
oils. American marketers thus claim that “color is irrelevant” in olive oil.
Recognising that many people refuse to buy into the ‘irrelevant color’
propaganda, American producers bottle their olive oil in dark green glass
bottles, which of course makes it impossible to see exactly what one is buying.
The American story is that the dark glass – always green, just like the color
of Virgin oil – is to protect the oil from the ravages of exposure to sunlight.
It must surely occur to thinking people somewhere that cooking and salad oils
are normally stored in a dark kitchen cupboard and seldom left sitting out in
the parking lot fully exposed to blinding sunshine, and therefore not actually
requiring protection from sunlight. But then this is America, and maybe
things are different here.
Few of us may remember that pistachios used to be dyed
a pretty red, with a powdered food coloring that happily transferred itself to
hands and clothing, but we still sometimes see them at Christmas, festively
dyed in red, green and white. The American marketing machine tells us that Iran
dyed its pistachios because the hulls contained unappetising splotchy stains
from primitive and backward Iranian harvesting methods, these Moslem terrorists
covering their sins by dying them. There was never any evidence presented for
this accusation, but then California produces large volumes of both pistachio
and pecan nuts which have naturally splotchy hulls (and no taste) and which the
Americans have peroxided, hypochlorited, chlorinated, and dyed for generations,
and still do today, to disguise their unattractive appearance. So when
patriotic, hard-working, god-fearing Americans dye pistachios, they are simply
employing modern agricultural best practices while making the world safe for
democracy, but when Iran dyes pistachios this is precisely the kind of
deceitful conduct we would expect from those primitive non-Christian ragheads.
Americans are such a pain in the ass.
*
Mr. Romanoff’s writing has
been translated into 32 languages and his articles posted on more than 150
foreign-language news and politics websites in more than 30 countries, as well
as more than 100 English language platforms. 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 is one of the contributing authors
to Cynthia McKinney’s new anthology ‘When China Sneezes’. (Chapt.
2 — Dealing with Demons).
His full archive can be seen at https://www.moonofshanghai.com/ and http://www.bluemoonofshanghai.com/
He
can be contacted at: 2186604556@qq.com
Notes
(1) Stephen Mihm: A Nation of Counterfeiters:
Capitalists, Con Men, and the Making of the United States;
archive.boston.com/news/globe/ideas/articles/2007/08/26/a_nation_of_outlaws
(2) https://history.uga.edu/directory/people/stephen-mihm
(3) https://www.se7ensins.com/articles/us-government-caught-pirating-military-software.1052
