When Is IP Theft OK?

If you spilled your morning coffee last week when you read that the Chinese army is behind the cyberattacks on US businesses, then we need to talk.

It may have raised eyebrows that the Chinese military was called out so publicly — so much so that they quickly denied any involvement. But that the Chinese are hacking North American (and other countries') networks should surprise no one, especially in the electronics industry.

We're all doing it, as Bruce Gain offers in his interesting perspective on cyberwarfare from his perch in Europe (America’s Declared (& Undeclared) Cyberwar).

Leverage:What if IP theft is a culturally acceptable form of innovation?

Leverage: What if IP theft is a culturally acceptable form of innovation?

Indeed, it's pretty much expected these days. We accept that it's a new form of espionage and warfare, but at the same time, in the west, we still rail against IP theft. But that's our perspective, our culture.

Stealing or innovation?
What if IP theft is not theft at all but a culturally acceptable form of innovation?

A lot of people argue that's the case with China, as Mike Bellamy did in this blog post about his China college days.

Recently, I met with an electronics executive, an old China hand, who said of working years ago in the Middle Kingdom, “They copied whatever they could copy.”

The executive described it in this way: The relationship between colleagues can be almost familial, and in this sense, the sharing of information and assets is almost an obligation.

Said the executive:

They don't understand the concept of building an intellectual property portfolio and licensing it for money. They have a different way of looking at life. You're not breaching confidentiality… it's not like you're stealing.

They are brilliant people who are really strong engineers. They don't find it too difficult to copy something if they can get the information at that level. That's why you give them a lot of the architecture but keep hiding the really smart stuff that makes it work.

A third of EBN audience traffic comes from China alone, so I invite our Chinese readers to comment on this.

Please let us know whether this assessment is accurate or not.

28 comments on “When Is IP Theft OK?

  1. hash.era
    February 26, 2013

    I dont think IP Theft is OK at any point plus it should not be encouraged too. IP thefts might be seen as a smaller set of entity which might not cause that much of a trouble but it can lead to other issues indirectly and will not be able to figure out from where it occured. The root cause will not be clear in such a scenario.

  2. Taimoor Zubar
    February 26, 2013

    @hash.era: Most of the people would agree that IP theft is not okay. But the problem is how to convince the Chinese about it. Their mindset and culture does not impose any restrictions on this and neither are the laws strong enough to discourage it.

  3. Taimoor Zubar
    February 26, 2013

    @Brian: While the Chinese may not find anything against copying a design from abroad and manufacturing it on their own, what about the scenario that's other way round. What if companies abroad start copying designs that were originally produced in China? Would that have any effect in improving IP laws within the country?

  4. Brian Fuller
    February 26, 2013

    @taimoorz, I hadn't thought of that. It certainly would work in the long term. What country do you think will be the “next China” that might have that effect on China? 

    Interesting point… 

  5. _hm
    February 26, 2013

    It is very difficult to read when internate espionage is atributed to only China. That is not fair by any standard. All countries do that and US may be defacto leader in internate espionage (but they mainly employ it for geo-political gain and control). There should be more trust and develop comity of nations.

  6. Brian Fuller
    February 26, 2013

    @_hm good point, as always… in case you didn't see it, Bruce Gain expanded on this idea last week:

  7. t.alex
    February 26, 2013

    I am curious how the law works when internal chinese companies are copying each other.



  8. Brian Fuller
    February 26, 2013

    @t.alex, that's a good question (and a humorous one at the same time!). 


  9. prabhakar_deosthali
    February 27, 2013

    If China is stealing IPs from US it is a good sign that the Chinese still believe that countries like US still have better IPs than what they could design.

    The trend may reverse in a few years when Chinese will start outsamrting the developed nations by having better IPs created and the roles of other counries will reverse where the countries like US will be tempted to steal the IPs developed by the chinese.




  10. hash.era
    February 27, 2013

    Taimoor: Forget about convincing the chineese since its impossible. They always think that whatever they decide is true and all those who reject it are as enimies. I have given up on convincing any chineese

  11. garyk
    February 27, 2013

    Quit tring to be politically correct. The Chinese know more about the US culture than we do!!!!!!!!!!!

  12. Taimoor Zubar
    February 27, 2013

    I hadn't thought of that. It certainly would work in the long term. What country do you think will be the “next China” that might have that effect on China? “

    @Brian: It doesn't have to be a “next China” type of country. Can be any country which uses a Chinese developed product and comes up with its own copied version. I wonder how the Chinese will respond to that. 

  13. kilamna
    February 27, 2013

    This situation would arise only if the next copier was also significantly cheaper than China; not very likely for some years.

  14. Taimoor Zubar
    February 28, 2013

    This situation would arise only if the next copier was also significantly cheaper than China; not very likely for some years.”

    @AzmatMalik: The recent trends in manufacturing have shown that China is no longer the low-cost producer in the world. Other countries have begun to match China's costs of production. A lot of companies are also looking to move the manufacturing back to their own countries. So I think a foreign company copying China's product is a possibility.

  15. Houngbo_Hospice
    February 28, 2013

    You can share IP information with your friends or work colleagues, but copying other companies/people' work without their consent is theft. We can't always prevent IP theft, but I don't think it should be “legalized”.

  16. itguyphil
    February 28, 2013

    “IP thefts might be seen as a smaller set of entity which might not cause that much of a trouble”

    That's always easy to assess when you're not the original creator. Many people think thaty they're just borrowing  the content and that makes it OK because no one is losing anything.

    But if you borrowed someone's car without them permitting you to take the keys, it would be categorized as theft.

  17. Mr. Roques
    February 28, 2013

    Well, the Japanese did a lot of that back in the day, they were so smart that they just took a good product and made it better. Was it illegal? I'm not sure they went as far as China but the results are there, its better for innovation.

    Any time we standarize, we are settling and it doesn't help innovation.

  18. t.alex
    March 4, 2013


    I did not realize it was humorous 🙂 The answer probably is they would fight without law.

  19. hash.era
    March 6, 2013

    pcharles: True but for how much do we have to do it ? I dont think its practical.

  20. itguyphil
    March 11, 2013

    I'm not saying it has to be done.

    But it is. Imitation is the greatest form of flattery.

    It's also a way to minimize risk in the product development cycle.

    But there's a thin line between imitation and blatant infringement.

  21. Wookey
    March 13, 2013

    Right, but whilst stealing a car is indeed theft, copying data is not theft. And IP is not property. Trying to treat copying and infringement as 'theft of property' is just nonsensical. Theft requires the original owner to have been deprived of their property, but with copying  they always still have it. It's not the same. It's a different area of law and has different effects.

    The correct question to ask is 'When is unimpeded dissemination of information more effective than a market in information which itself generates revenue but is much slower and less efficient'? The answer probably depends on circumstnaces, but on the whole the freely-transferrable infomation scenario will bring a higher overall benefit. We've seen this in the steady rise of free software, and to a lesser degree open hardware, developments over the last 20 years.

  22. hash.era
    March 14, 2013

    @Pocharles: I don't think limiting can be done that easily plus limiting towards one area or two might be misleading as well. You need to be open and ready for anything.  

  23. itguyphil
    March 20, 2013

    So you're saying that IP law is unnecesary?

  24. itguyphil
    March 20, 2013

    From whose perspective? The original creator or the copier?

  25. Wookey
    March 20, 2013

    @pocharle: How did you manage to read that into my post?

    I'm saying that copyright infringement is different from theft, and requires different laws. I'm also saying that restrictive application of copyright and patent law often does more harm than good. Going round shouting 'all copying is theft' is just wrong, and very shortsighted. Patent law, in general, and certainly in the area of software does _much_ more harm than good. The entire sphere would benefit from a return to the situation prior to 1991 where software was simply not subject to patent law, because it's maths, and because it's _also_ already subject to copyright law.

    Copyright in software has its uses, although the most useful use is to enable copyleft. In general everyone is much better off if they have access to the software that runs on their machines such that they can fix it or change it. So long as the software on your machines is owned by someone else you have ceded control, and if that company goes bust, or changes things in ways you don't like, you have no redress. These are good things to avoid, and vital to avoid in some circumstances.

  26. itguyphil
    March 20, 2013

    I wasn't trying to push it to the limit. Just asking a quick question to see your answer.

    I understand where you're coming from and appreciate that you are not thinking like the software patent troll that control the industry as wek speak.

  27. hash.era
    March 26, 2013

    @Pocharles: The original creator of course.

  28. itguyphil
    March 26, 2013

    gotcha. OK understood

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