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China Becoming Intellectual Property Powerhouse

eldavojohn writes "A lot of Westerners view China as little more than the world's factory manufacturing anything with little regard to patents, copyrights and trademarks. But it seems as far as patents go, China is moving on up. According to the WIPO, the company that applied for the most patents in 2008 was not an American or Japanese company but China's Huawei Technologies. And China has made astonishing ground recently moving up to third place with 203,257 patent applications behind Japan (500,000) and the United States (390,000). It remains to be seen if these patents applications will come to fruition for China but it is evident that they are focusing on a new image as a leader in research and development. The Korean article concentrates on 2008 but you can find 2009 statistics at the WIPO's report on China along with some statistics breaking down applications by industry."

28 of 140 comments (clear)

  1. This ought to be good. by Penguinisto · · Score: 2, Funny

    I wonder how long it will be until "intellectual property" lawyers start complaining about their cases being outsourced?

    --
    Quo usque tandem abutere, Nimbus, patientia nostra?
  2. Do they even care over there? by danomac · · Score: 2, Interesting

    Given that there's massive infringement over there (not just software or entertainment, physical as well) does that mean that they might actually start enforcing IP rights?

    That'll be interesting to see.

    1. Re:Do they even care over there? by malkavian · · Score: 2, Insightful

      Given 50 years or so, maybe.
      The USA was built in this fashion; it lifted designs, works and all kinds of "Intellectual Property" from Europe, and used it as it wished. Unsurprisingly, unencumbered by restrictive laws, it grew fast in the intellectual works arena, at which point people (the ones who'd made a profit this way) wanted to keep things as they were, and so lobbied for ever more restrictive legislation to ensure nobody could get a slice of their pie.
      And now, another country starts doing exactly this, and unsurprisingly, starts racing onwards, catching up fast.
      The difference in this is that with China, the State rules all. There aren't these pesky wildcard businessmen who can lobby all the time. Yes, there's corruption, but if it's uncovered and exposed to sight, the reprisals are nothing other than draconian.
      The State can, and will, modify its IP laws to best support the growth of the country, rather than the growth of an individual company; that's where it could very easily steal a march on the west.

  3. I think we found step 2 by bersl2 · · Score: 3, Informative

    1. Disregard foreign patents
    2. Acquire patents for use against foreign firms
    3. PROFIT!

    1. Re:I think we found step 2 by EEPROMS · · Score: 4, Insightful

      You may laugh but America did the exact same thing when they were industrializing, many European companies complained about American companies ignoring copyright and patents. It was only after the US started inventing their own unique designs that they started enforcing IP rights. China has reached that same stage were they are now producing their own unique products so you will see IP right enforced more rigidly. If this is a good or bad thing time will tell, for Europe it didnt work out well as many industries collapsed as more innovative products came out of the USA.

    2. Re:I think we found step 2 by antifoidulus · · Score: 2, Informative

      How is this different from any other aspect of Chinese economic policy? Ever listen to Hu Jintao rail against protectionism? Then ever look at Chinese economic policy to see that it is, by FAR, the most protectionist large economy on the planet? Thats pretty par for the course for China.

      See the thing about China is that they don't know when to quit. When they were a tiny economy they could get away with a lot of this bullshit but now they are acting like a big kid whose parents never disciplined him. Sure it's cute when he is 7, but now that he is 20 if he keeps this shit up he is going to get into a lot of trouble but he seems blissfully unaware of that fact......

    3. Re:I think we found step 2 by TheLink · · Score: 2, Interesting

      When you owe a bank $100,000,000,000, the bank has a problem. If the U.S. ever decides to default on its loan to China

      It's not even the same problem. Why would the US ever have to default?

      The problem is more like: when TheLink owes the bank 2 trillion payable in TheLink tokens, the bank has a problem, not me.

      Since I can create as many tokens as I want :).

      Think about it more, and you'll see how even more ridiculous the scaremongering about Evil China screwing and holding America to ransom is.

      Sure if the USA creates too many trillions out of thin air, people might stop lending them money, but I think they've already created trillions without too many problems (google for: federal reserve trillions).

      And that's not really China's fault the US is borrowing trillions etc. You can say they are artificially controlling the price of their currency. But it's relative to the US dollar ;).

      If someone is selling stuff too cheap to you, and you are paying them for it with money you borrowed from them, and the debt is payable in money that you can create any time you like, how is that screwing you?

      If you somehow screw yourself as a result, it's your own fault.

      People can say it's all very complicated finance stuff, but I'm telling the truth as it is :).

      --
  4. Re:Probably Stolen by ThorGod · · Score: 3, Insightful

    I agree. Last I heard, they only enforced IP rights when non-Chinese companies infringed (or appeared to infringe) upon a Chinese company's IP.

    Anyone know if China's still doing that? (with references)

    --
    PS: I don't reply to ACs.
  5. Who didn't see this coming? by Bloodwine · · Score: 5, Insightful

    I remember back when outsourcing and offshorting really started to ramp up and the whole mentality was, "The U.S. will become a nation of intellectual property holders and high-level managers while the rest of the world does the grunt work".

    China is known for making knock-offs and stealing intellectual property. If China controls the majority of manufacturing and "grunt" work, then they ultimately have complete access to everything and nothing will really stop them from yanking the rug out from under the idiot outsourcers who didn't see it coming and assumed they could maintain all the power and wealth without doing any of the real work.

    Who run Bartertown?

    1. Re:Who didn't see this coming? by DukeLinux · · Score: 3, Insightful

      The current US and European managers could care less. They are reaping profits for themselves in the here and now. When the stinky stuff hits the fan they will have their money and will cut and run. Just ask Carly Fiorina how well that worked out for her. Too bad she was so mean and nasty not even cancer could kill her.

    2. Re:Who didn't see this coming? by mattack2 · · Score: 3, Informative

      You presumably mean they COULDN'T care less. Saying the exact opposite of what you mean is a bad way to (try to) communicate.

    3. Re:Who didn't see this coming? by scamper_22 · · Score: 2, Interesting

      Anyone who actually believes is in the 'innovation economy' is an idiot. The includes a surprising number of academics for some reason.

      Apart from 'stealing' technology, there are a whole host of other reasons.

      1. Without low-level work, you won't get good people going into the field in the first place. Just picture yourself as a top 10% high-school kid planning your future career. You can risk becoming and engineer/scientists/entrepreneur who will work their ass off in the rare hope of making it big.... or you can get a 'good' job joining the government or government protected field (legal, medical). That's right... your best and brightest will stop going into the field. Contrast that to say China, where their best and brightest will go into the field. Many won't fulfill their potential... but they'll still have jobs as network administrators, sustaining engineering... It makes sense for them to invest in their field. In 20 years, it will be their best and brightest versus our C students in the R&D field. Not to mention... you know all those brilliant immigrants who seem to make up a large percentage of our grad schools... China and India are both working extra hard to keep their best talent there.

      2. You often need to work in an industry to 'innovate'. As more and more functions are moved overseas, they'll be able to innovate on those processes and products that we never get exposure to.

      3. China especially has pursued trying to establish its own industry as opposed to just being an outsourcing hub. And as they get 90% of the functionality, they'll get 99% of the sales. Huaweii is a good example. They don't have to get 100% of the functionality or service as Cisco. But most of the world isn't going to pay for that when Huawei can undercut them them. With those sales comes market share, R&D dollars. Before the US and Europe would export a lot of tech to the developing world. Today, any sane developing country is going to choose a Chinese company. Cheaper, most of the functionality...

      4. Even if you are able to be innovative, it's not an economy. Maybe if you're a small country of a few million, you can sustain yourself off a few innovative industries (singapore, finland...). But there's not enough innovative wealth to sustain 300 million people. Like it or not the vast majority of jobs are regular work... and you're not 'too good' for them. Assembling widgets, farm work, textile work...

      5. There is a certain colonial mentality that people seem to think the West must always be on top and relaxing. While the developing world serves them. It's why you have western people talk about guaranteed incomes, while they need to hire mexicans to work their farms... That world ended long ago... but the mentality is still there...

  6. Re:Probably Stolen by mrsteveman1 · · Score: 2, Funny

    Because these patents come with a side of sticky rice, its totally different.

  7. and when china workers stand up for rights then mo by Joe+The+Dragon · · Score: 2, Insightful

    and when china workers stand up for rights then manufacturing will just move to next cheap place.

  8. Re:Probably Stolen by Anonymous Coward · · Score: 3, Funny

    Well I asked a Chinese graduate student in my lab what intellectual property meant in China. He smiled and yelled out "Nothing!"

  9. This has already happened by Infonaut · · Score: 5, Informative

    The first time around, it was the United States that started as a stealer of inventions from other countries, then over time became far more interested in protecting intellectual rights. When your own industry isn't generating the ideas, you figure anyone's ideas are fair game; when your industry is coming up with new ideas, you want to protect your position.

    --
    Read the EFF's Fair Use FAQ
    1. Re:This has already happened by pipedwho · · Score: 2, Insightful

      Interestingly, I believe this points out the fallacy of IP protection being a driving force to innovation. It appears that the people most in the position of inventing new products are those that are already in a similar or related industry. Since most innovation is incremental, we see a dozen companies come out with similar products even though most of the engineers doing the development would have never even seen their competitors patents.

      Yes, I will admit that occasionally you see an invention that is clearly worthy of a patent. But, far too many are just small incremental changes that have already been thought of by numerous other engineers in that industry. The lawyers, of course, jump in and start a patent 'land grab' to justify their salaries. And the patent office doesn't seem to care that most of those ideas are obvious to other skilled engineers. So we end up with the mess we have today.

      Now, China comes along and starts taking out patents with equally trivial incremental advancements. But, since they also make up the majority of the prime manufacturing industry, they are better placed to know what changes can be made. In the end, the US will be locked out of the manufacturing industries that they helped create in the first place. And, China's own internal regulations and legislation will have nothing to do with it.

      In the end, the US will either be forced to considerably raise the bar on what is patentable, or risk completely losing any technological manufacturing industries it has. And without a local manufacturing industry, there won't be any engineers 'close enough to the action' to draft up any useful patents to take the industry back. (Think of all the ridiculous 'inventions' that come out of people that have no clue how things work, versus the real innovation that comes out of people that are already skilled, experienced and working directly in their fields of expertise.)

      Back in the day, most IP portfolios were locally held and helped build and sustain the wealth of locally owned industries that also had state of the art technological know-how. This is fantastic in a closed system, and especially when export dollars can be generated as a side effect to this progress. However, if a majority of the ownership goes external (ie. foreign), then the legal protections no longer foster local wealth and will most likely work to stifle it.

      Remember, China is just a third party taking US IP law and turning it to it's advantage. In that way IMO, the faster the US drops it's patent system, the less long term damage will be done. If the patents continue on this trend, US IP law will effectively be protecting the foreign incumbents to the detriment of local industry.

  10. Re:Probably Stolen by siddesu · · Score: 5, Insightful

    How is that different from the good ole US of A?

    The mighty US publishing industry was built on infringing (or stealing, or whatever) the copyrights of European authors for so many decades it may be close to a century or two.

    Then, the markets grew and Hollywood developed a solid relationship with Washington during WWII doing propaganda shit. The studios and the publishing companies started making money off American productions.

    And suddenly - lo and behold - the US government changed its mind on the matter, joined the various copyright conventions and went on to become the world champion of copyright and related rights.

    You're seeing China doing exactly the same thing, only 80 years later, using (and perhaps abusing) the very framework US put in place.

  11. Africa: Not unfixable by Infonaut · · Score: 3, Interesting

    Africa has been weathering the global downturn surprisingly well, and democracy is on the move across the continent. Ten years ago The Economist called Africa "The Hopeless Continent", but in a June, 2010 article they talk about the rise of entrepreneurs and better overall governance. If anything, this century may see Africa finally climbing out of the hole it's been in for so long.

    --
    Read the EFF's Fair Use FAQ
  12. Hmmm by Anonymous Coward · · Score: 4, Interesting

    > China's Huawei Technologies
    Would that be the same Huawei Technologies that stole Cisco IOS code and who's rep was caught photographing chipboards of Cisco gear in the Cisco booth after hours?

  13. Re:Probably Stolen by Halo1 · · Score: 4, Interesting

    I agree. Last I heard, they only enforced IP rights when non-Chinese companies infringed (or appeared to infringe) upon a Chinese company's IP.

    Anyone know if China's still doing that? (with references)

    Where are your references that they actually did that?

    On a side note, several years back I attended a speech by David Martin, who is founder/CEO of the company M-CAM, which is specialised in evaluating patent portfolios (such as determining how many claims overlap with other patents, likely validity etc). It was so interesting that I transcribed it. That page also contains the audio recording.

    One of the things he mentioned is that China has a requirement that whenever the state purchases technology from a foreign interest, all "IP" for enabling technologies and know-how must be transferred as well. Many Western companies figured the Chinese wouldn't know/comprehend the exact patent rights they gave to the Chinese, so they only transferred rights to second-rate patents that weren't worth the paper they weren't printed on (crappy patents don't only exist in the software world). Once the Chinese caught up with this practice,

    • Western companies suddenly started losing out on a lot of bids to large projects
    • the Chinese started closely scrutinising the patents supposedly held by these foreign companies

    It's easy to accuse the Chinese of "stealing" everything, but (just making up these numbers) what if 48% of what's supposedly stolen should actually have been transferred to them in the first place according to contractual obligations (nobody ever forced those companies to do business there if they didn't like the terms), 48% consists of bogus patents and the other 2% is simply the equivalent of the Nokia/Apple/Google/Microsoft/HTC/LG/... patent infringement lawsuits that you have in the US mobile industry (are all those companies "thieves", copycats etc)?

    I also think the "Probably stolen?" subject of this thread shows incredible ignorance. China probably has more engineering majors graduating every year than any other country in the world. Do you honestly think that the Chinese for some reason are inherently more stupid than us Westerners and cannot come up with anything innovative? Especially "innovative according to patent office standards"?

    As far as I can tell, they've simply learned the tricks of the trade. For decades, "intellectual property" allowed us to have the best of both worlds: cheap labor from China and nevertheless preventing them from making cheap knock-offs and importing those back into our territories (they could sell them over there, but nobody cared about that since nobody had any money so there was no real profit to be made anyway).

    Now they are starting to beat us at our own idiotic game. And still some people think they have the moral high ground and yell "but they steal everything from us, this cannot be". Wake up.

    --
    Donate free food here
  14. Re:Probably Stolen by siddesu · · Score: 3, Insightful

    Ignorant troll is ignorant.

  15. Re:Probably Stolen by Kagato · · Score: 2, Informative

    80 years? The US was stealing from Europe well before that. The UK had the death penalty for people caught stealing certain technology. However, there is a very big difference. The US didn't have a WIPO treaty back then that bound them to honer Intellectual Property. China does. They wanted all the benefits of WTO/WIPO, but doesn't want to actual honor their end of the deal.

  16. Re:Probably Stolen by Nerdfest · · Score: 3, Interesting

    Do you honestly think that the Chinese for some reason are inherently more stupid than us Westerners and cannot come up with anything innovative? Especially "innovative according to patent office standards"?

    Stupid, no, but cultural differences do seem to have an effect on innovation. Cultures do change though, and the bar on 'innovation' is pretty low, especially in the software patent world. China will be able to hold their own in no time.

  17. Re:The last cheap place is Africa, It's a mess. by c0lo · · Score: 4, Interesting

    A really bad ugly un-fixable mess.

    As bad and ugly as it would be, the chinese are already there.

    China's investment in Africa has grown by as much as 30% annually, faster than in any other continent, from $1.6-billion in 2008 to $5.4-billion in 2009. About 2000 Chinese companies are engaged in 8000 projects in Africa, mainly in infrastructure and agriculture.

    And here you have some other numbers: "Beijing says its trade with Africa is on track to top $US100 billion ($A103.5 billion) this year" (this year means less than 3 months now, isn't it?)
    To put the things in perspective: in July 2009, US owed China 900+ billion (without counting the trade deficit with China) - 10% of money that US owes China will go into Africa in less than 3 month!?!

    For your survival: learn mandarin!

    --
    Questions raise, answers kill. Raise questions to stay alive.
  18. Re:Probably Stolen by siddesu · · Score: 2, Informative

    For a good overview of how "intellectual property" became what it is today in the US, see, for example, this book:

    http://en.wikipedia.org/wiki/Free_Culture_(book)

    It will answer all your questions above, and more, and provide quite a lot of examples. It is also free.

    The 1930s were a miserable time to live in the US.

    How is that even related to the topic at hand, which is history of copyright and related rights?

    (Incidentally, US may have been bad, but the rest of the world had it a lot worse, and a large part of that was due to the myopic protectionist legislation US passed in the wake of the recession)

    I'm pretty sure the US has never had the chance to abuse international trade in much the ways China has.

    US has been directing more or less unilaterally most of the international trade for its own benefit since the end of WWII. I'm pretty sure the effects of China's trade policies don't quite measure up in comparison.

    Do you know what does, for example, the phrase "Nixon shock" refer to?

  19. Re:Probably Stolen by Anonymous Coward · · Score: 2, Interesting

    Yes, I think they are not as capable. (I'm Chinese, so the rest of you can drop the racism accusations.) There are some cultural elements that cause this, but Chinese people are resourceful, and plenty of them are filing patents on this side of the Pacific, so there is no reason to think that the folks on the home front are not growing in capability. It is not a bi-level state. It is a continuum, and as a whole, Chinese people will catch up quickly and surpass the US.

    It is also not a single linear continuum. It is much more complex than that, and there will be areas where the Chinese will really excel, and it does not hurt that bozo American companies are cheaping out, and hoping to cash in on cheap Chinese high tech labor only to have their intellectual property walk out the door. (Ever heard of the stereotype cheap Chinese? Didn't realize your own cheap countrymen were selling you out, eh?) If you think the Chinese policy of supplying your whitey companies with cheap labor is just some high ranking general lining his pockets for the short term, you are totally missing the big picture.

    There is no way in hell some of that know how and experience will not leak (even if there is no policy to steal).

    Christine O'Donnell might be right in warped some sense (although she was a lying f.ck when she said she had intelligence documents on some Chinese conspiracy). The Chinese will take over, simply because they will become the 800lb gorilla, and they won't have to fire real missiles; they just have to dominate the world economy.

  20. Rampant Fraud in China by happyhamster · · Score: 3, Informative

    How many of those patents are legitimate, and not fraudulent of plagiarizing?

    "Rampant Fraud Threatens China's Brisk Ascent"
    http://www.nytimes.com/2010/10/07/world/asia/07fraud.html?_r=1&hp=&pagewanted=all

    One of the points the article highlights is that in Chinese culture, blatant cheating and shameless plagiarism is fine. It's just being "smart" to get ahead. Nice culture to force your hard-working population to compete with.