During the last decade I have been involved with technology transfer and intellectual property issues related to China. I have come to recognize some basic patterns in this field, which are nothing new but are somehow my main take away from working in the technology law industry in an emerging market:
- Since the mid 80ies China has opened up its economy and in the course of the following 20 years it has established a well drafted intellectual property framework based on international laws promulgated by bodies like WTO or WIPO and modeled after foreign innovation system like Singapore or Germany.
- This national legal framework – in spite of poor execution measures - was sold to the Western world as China’s acceptance of international law and was one of the entrance tickets to the Western dominated world economy.
- In the tradition of the Chinese proverb 指鹿为马 [pointing at a deer and calling it a horse] China reiterated for years that it had fulfilled all requirements and obligations but actually undermined the IPR framework by industrial policies which force foreign investments to gradually give up technology and know how. James McGregor described these policies in an APCO paper “China’s Drive for Indigenous Innovation”. The German author Frank Sieren calls one of the main elements of these industrial policies pointedly “Concubine Economy”.
- This reality caused foreign businesses to develop their own protection strategies, which try to circumvent a seemingly not navigable system, i.e. protecting know how without resorting to the legal system. A Swiss research team on technology management analyzed these measures in a paper titled “How Managers Protect IPRs Using de facto Strategies”. These de facto strategies apply not only to China, but to any market, but its fair to say that Chinese industrial policies accelerated the
- I have the impression that such de facto strategies can delay know how loss, but in the long run a technocrat government will succeed in absorbing what it wants; and more importantly it is the peculiar economic development stage at which China finds itself that creates know how spill over and thus intense domestic innovation.
- I moreover believe that all the obstacles that humanity faces can only be resolved if East and West collaborate. That’s not a call for world peace, but a pretty rationalistic understanding of which problems we face and what it takes to resolve them – just think of environmental pollution on a global scale. It might as well be that some required inventions for humanity’s progress are only triggered by great turmoil, disastrous warfare and close to end of the world scenarios. In other words: all is good, even though it might look dim and dark, because there is an invisible hand guiding all of us, i.e. all that is.
We, the industrialists, are moreover invited to change perspective and adopt for a few minutes the outlook of traditional creatives, who make a living by being innovative not as an organization but as individuals who have to reinvent themselves day after day. I would like to summarize therefore a National Public Radio podcast, which aired a program at the end of June 2014 under the title “What is Original?”
DJ and producer Mark Ronson says there: “You know, in music, we take something that we love, and we build on it. That’s just how it goes. Pablo Picasso is quoted: Good artists borrow, great artists steal.” The British poet T.S. Elliot built on this quotation: One of the surest tests [of the superiority or inferiority of a poet] is the way in which a poet borrows. Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different. The good poet welds his theft into a whole of feeling, which is unique, utterly different than that from which it is torn; the bad poet throws it into something, which has no cohesion. Ronson continues: “Subconsciously we are influenced whether we like it our not.”
Filmmaker Kirby Ferguson claims that only the big bang is original, everything else is derivative. He describes Bob Dylan as a folk musician whose music was 2/3 copied from others, but acknowledges that in what he did, he followed the routine of all artists of that genre: folk musicians contributed to the body of folk music. He dismantles George Lucas Star Wars movies as a copy of the Japanese director Akira Kurosawa, and shows with the iphone that American copyright and patent laws run counter to this notion that we build on a common body by considering creations a private property although the common body of inventions is a public good.
Where is the line between copying and building something new? Steve Jobs showed that it’s more a question of perspective that anything else: in 1996 he quotes Picasso and confirms that Apple has always been shameless about stealing from others. In 2010, when Google’s Android mobile phone is launched, he says “great artist steal, but not from me”. Ferguson suggests to be transparent in using contents from others – what people want is credit for their contribution to the common body of inventions. I think that’s a reasonable approach. Johanna Blakely tells us that the fashion genius is really in curating from the past and reviving it in the present; and since copyright law barely touches fashion, the industry benefits in innovation and sales. Why not extend these best practices to other industries?
Earlier this year, Tesla Motors CEO Elon Musk decided to give away a big part of his company's patents for free. It might seem like a strange business move, but Musk said he wanted to inspire creativity and accelerate innovation. Writer Steven Johnson says this is the way great ideas have been born throughout history. Therefore, it’s probably time to rethink how we try to control our know-how. So why continue to spend a fortune on patent registration, IPR maintenance and enforcement, in particular in China, where as we have read earlier, it’s all in vain?
Ideas and innovation thrive in environments where ideas are free to flow from mind to mind and to be reused and repurposed and remixed in interesting and surprising ways. And a lot of the technology we're dependent on has come out of that kind of collaborative network. Johnson continues to explain that these collaborative networks and a change in diet [from alcohol to coffee] were the reason for many inventions made during the age of enlightenment. Visionary people would come together in coffeehouses in Boston, Philadelphia, London, Paris and Vienna to discuss visionary ideas.
I ask myself where these places happen to be nowadays. Where do visionary people meet to discuss visionary ideas? Silicon Valley or Shanghai Zhangjiang Hitech Park? Steven Johnson wrote a book about “What is the space of creativity?” but I am not sure if he only wrote about traditional Western spaces or new Chinese realms of creativity. I see innovation not only happening in China because companies absorb foreign technology and the central government coerces hitech enterprises to jump into JV with SOEs. I see bursts of innovation because technicians, engineers and executives from all continents and industry backgrounds meet on a regular basis in technology parks like in Shanghai’s Pudong district Zhangjiang Gaoke. They might not meet in fin de siècle Viennese coffee houses, but they equally exchange ideas and spill over know how. I see intense innovation happen, because Chinese entrepreneurs who have spent a few years abroad return to China with ideas which they adapt and improve. I see innovation happen, because humanity faces in densely populated regions like Eastern China new challenges, which do not exist anywhere else. Think of mass transportation within urban centers and between them. Think of food provision for million of people, but a scarcity of arable land. I have seen pork farms and green houses in Yunnan entirely shaded with photovoltaic roofs to use land twice: for agriculture and power generation; and I can’t agree more with Johnson on the impact of diet. Chinese are more innovative than they have been 10 years ago, because they slowly turn into a coffee drinking society. Starbucks already calls China it’s second home market.
Western innovation reports tend to emphasize the importance of formal basic research & development, but usually undervalue incremental research and development. Comparing European and Chinese businesses over the last years, I have the impression that the West sometimes innovates for the sake of innovation whereas China builds on top of existing inventions to commercialize.
Even the cold war created great inventions: Steven Johnson tells us that the launch of the first Soviet satellite caused the US to develop the global positioning system GPS. Insofar, even war and the build up of arms can do some good for humanity in the long run. Trust in the invisible hand and to throw in some Eastern philosophy, some Taoist thought and some Buddhist concepts: trust that all knowledge that is has only one source and worldly barriers and differences are nothing but avidya: a delusion. Abandon (intellectual) property law because it is the vehicle for division between yours and mine. In reality nothing belongs to us, but everything to all that is. Build property and value, but don’t cling to it.
The Tibetan Buddhist master Ringu Tulku explains the nature of avidya (ignorance) as follows: In the Buddhist sense, ignorance is equivalent to the identification of a self as being separate from everything else. It consists of the belief that there is an "I" that is not part of anything else. On this basis we think, "I am one and unique. Everything else is not me. It is something different."... From this identification stems the dualistic view, since once there is an "I," there are also "others." Up to here is "me." The rest is "they." As soon as this split is made, it creates two opposite ways of reaction: "This is nice, I want it!" and "This is not nice, I do not want it!"