back to article EU politely asks if China could stop snaffling IP as precondition for doing business

The EU yesterday escalated its complaint to the World Trade Organization that China "forces" Western companies to surrender valuable intellectual property (IP) as part of doing business there. Five years ago, the US estimated that the value of IP stolen by the Middle Kingdom exceeded the value of US exports to Asia. As China …

  1. TheSkunkyMonk

    China has got this one right, no one should patents on ideas/inventions and if someone can make something better then so be it! Specially with drugs and medical equipment absolute joke we allow companies to hold patents on cures and treatments and allow research to be done behind closed doors. If humanity ever wants to progress we are going to have to start being more open the idea of sharing our ideas/designs/inventions. Ffs all IT folk should know this, without RFC's and sharing we would of never had the internet and the tools we have today.

    1. BebopWeBop Silver badge

      Its not a matter of if someone can improve it. They are stealing all of the ideas and development work.

      1. deive

        Downvote as they are not stealing - this is part of a contract to do business in China.

        If they chose to the companies involved could have not done business there, however they know there are a lot of people getting a lot richer there and they want a slice of that pie.

        1. j2f8j8j2fj

          "Downvote as they are not stealing - this is part of a contract to do business in China."

          Sure, and the US can just go declaring everyone's IP to be invalid and the property of the US. Don't be stupid.

      2. Anonymous Coward
        Anonymous Coward

        @ "They are stealing all of the ideas and development work."

        There is some evidence that the technology for the Western industrial revolution was ripped directly from China, so bitching when the tables are turned reeks of double standard.

        Sadly patents do not equal innovation, they are just a way for those that control the patents to use the courts to say this is mine when the majority, for years, have been just natural extensions of existing concepts.

        True innovation i.e. something unrelated to any previous technology comes from the small percentage of odd individuals who see the world is a different light. These people are rarely who the IP hunters employ and they tend not to profit from their innovation as much as say legal and money people.

        That the western IP controlers might have, in the past, purely incidentally, provided work in their own countries changed when they found it cheaper to train up the high population/low wages countries and manufacture there instead. Thus patents and the idea of protecting techology was written off for a quick buck, i.e. yet another example of classic western business greed and stupidity and proof that giving control to self serving know-nothings is a path to disaster.

        So for my part I would say that patents are only a way of limiting technical advancement so as to maintain the status quo for the existing rich and their croanies, that China are replacing the non-innovating leeches via the latters own greed is just ironic. That China is also doing their own R&D and will have to increasingly do more in order to continue to advance once they have the lead means that innovation will continue but with different people taking the profit.

        The odd individuals who come up with the "tech beyond" will continue to exist, perhaps and unlike in the western world would be promoted by China, certainly the current idea that people other than the true innnovators are allowed to give away innovation out of greed hasn't working too well for us.

    2. codejunky Silver badge

      @TheSkunkyMonk

      "Specially with drugs and medical equipment absolute joke we allow companies to hold patents on cures and treatments and allow research to be done behind closed doors"

      I dont work for free. I dont imagine many do. The capital costs to develop a drug is huge and then it has to pass testing and various country safety standards. None of that is cheap, none of that is easy. So an amount of time to recoup those costs is necessary if we want anyone to develop new drugs, medical tech, etc. Then when the patent expires anyone can take that hard work and make a generic version.

      Much cheaper (still expensive) to make a generic than to develop new cures, but new cures are what we want.

      1. Anonymous Coward
        Anonymous Coward

        Re: @TheSkunkyMonk

        It would be a lot cheaper if they did't have such a huge advertising budget, 30%ish on average is the figure I have seen. I.e. the bribe to unscrupulous doctors to push the drug out like candy.

        1. codejunky Silver badge

          Re: @TheSkunkyMonk

          @AC

          "It would be a lot cheaper if they did't have such a huge advertising budget, 30%ish on average is the figure I have seen. I.e. the bribe to unscrupulous doctors to push the drug out like candy."

          That is one way to look at it. The other is to blow billions on hard work, research, creating cures and improving health in the world- and then trying to actually make some money on it because otherwise it was one huge wasted effort and wont ever be done again.

          Yes they advertise and yes it costs. Because they have billions to recover in costs in a world where the few developed countries are the only available source of paying for it, a large portion of the world which will have access to it and generic producers just waiting until the patent runs out.

          Would you work for free? Would you work for negative billions?

          1. Anonymous Coward
            Anonymous Coward

            Re: @TheSkunkyMonk

            WTF does working for free have to do with anything?

            The biggest component in the cost of the development of a drug is marketing. Marketing exists for one of two purposes. 1, to let people know about your product, fair enough. 2, to make people buy your product even if it isn't suitable or appropriate. It is 2 that is the bribe paid to doctors. Publish studies of the drug in journals etc. and doctors will become aware of it. Pay doctors to push pills out like candy and you end up with serious problems.

            Not advertising in this fashion in no way precludes a company from making a profit.

            1. codejunky Silver badge

              Re: @TheSkunkyMonk

              @AC

              "WTF does working for free have to do with anything?"

              So you wouldnt? So you would work with the aim of trying to make money. And it doesnt matter how good your product is if it isnt marketed well. So you can take the rest of your comment and bin it because its value has suddenly reached the below negative the pharma businesses would be if they didnt have a decent marketing budget.

              Btw I hope you dont use mouthwash. The bad breath problem was invented to sell the stuff.

    3. Voland's right hand Silver badge

      You are mixing two completely different issues.

      1. Chinese theft of IPR

      2. The "unfairness" of the IPR monetization process in the western world.

      Those two have very little to do with each other.

    4. Phil O'Sophical Silver badge

      if someone can make something better then so be it!

      But that's the whole idea of patents. Without them people would have to keep their ideas secret, so that no-one can steal them. With a patent they have to be published (so others can see how to improve them), and in return the original inventor gets a short period of "exclusivity" to benefit from their idea.

    5. Sandtitz Silver badge

      @TheSkunkyMonk

      "China has got this one right, no one should patents on ideas/inventions and if someone can make something better then so be it!"

      China doesn't make things better, they just make it cheaper than the competition, partly because of lower labor costs and a big internal market, but also because they don't spend on R&D.

      "Specially with drugs and medical equipment absolute joke we allow companies to hold patents on cures and treatments and allow research to be done behind closed doors."

      The cost of drug development is super expensive.

      Medical equipment costs a lot, because they're specialty products, need many (local) certifications, and the companies producing them are not selling a several X-Ray machines, ultracentrifuges or electron microscopes in large quantities.

      "If humanity ever wants to progress we are going to have to start being more open the idea of sharing our ideas/designs/inventions."

      Homo homini lupus. Turning all mankind to work for the common good would be the ideal Star Trekkian future but that won't work by just abolishing patents or trade secrets.

      1. vtcodger Silver badge

        Re: @TheSkunkyMonk

        China doesn't make things better, they just make it cheaper than the competition, ...

        Replace "China" with "Japan" and that's pretty much word for word what American companies were saying in the 1960s and 1970s. And the 1980s as well right up to the point where the Regan administration "negotiated" a "voluntary" agreement with Japan to limit the number of cheap, high quality, Japanese vehicle imports that were destroying the US auto industry.

        I wouldn't be at all surprised to see the same happen with Chinese products sometime in the next decade or so.

        1. MrDamage

          Re: @TheSkunkyMonk

          Unlike Japan, China has the might, and friends, to tell any US president where they can stick the proposed "agreement".

          1. Anonymous Coward
            Anonymous Coward

            Re: @TheSkunkyMonk

            Unlike Japan, China has the might...

            ...and the US Treasury Bond holdings to really squeeze the USA, if it wants to.

            1. CarbonLifeForm

              Re: @TheSkunkyMonk

              Holding treasury bills gives China very little "power" over the US.

              The bills only give the bearer the right to expect an interest payment. Nothing more. (China can sell them, certaintly, but if they are sold en masse, their value drops.)

        2. Sandtitz Silver badge

          Re: @vtcodger

          "Replace "China" with "Japan" and that's pretty much word for word what American companies were saying in the 1960s and 1970s."

          I'm aware of that.

          You seem to imply that China produces better goods than the West World. Foxconn and others may produce some great gadgets, but they're just following Apple's and others' blueprints. What I'm thinking about Chinese manufacturing is the junk that fills AliExpress, everything from fake cosmetics to fake shipping containers, the melamine milk scandal and other faulty or dangerous goods.

      2. MonkeyCee Silver badge

        Re: @TheSkunkyMonk

        "Medical equipment costs a lot, because they're specialty products, need many (local) certifications, and the companies producing them are not selling a several X-Ray machines, ultracentrifuges or electron microscopes in large quantities."

        The medical manufacturers around here cover all ends. Small cheap field units to proper diagnostic kit.

        Most of the big stuff that you mention is sold with 12-20 service contract and the capital cost financed across the same period. The clinicians need it kept up to spec, and it means that you get the same team building and supporting them.

        In general medical kit is over engineered and over priced. But there is demand for that, and if you're going to insist on holding quality to the max, then we all know what other parts of the iron triangle have to give way.

  2. devTrail

    Have the cake and eat it

    I don't think the problem is just China forcing them to hand over their IP. If they want to squeeze western workers by outsourcing all their production to countries with lower wage they can't do anything else than handing over designs projects and industrial processes with all the related industrial secrets. So they teach them how to manufacture their products, but then they complain because they copy their products.

    1. Valeyard

      Re: Have the cake and eat it

      Have your cake and eat it is the perfect title for this. So it costs to lose IP, what they need to ask themselves is that cost lower or higher than a local manufacturing facility rather than outsourcing. Then pick one.

    2. vtcodger Silver badge

      Re: Have the cake and eat it

      The problem is more one of access to the Chinese market. That's 1,300,000,000 consumers many with some amount of disposable income. Average Chinese income looks to be about $10000 USD per year. That's real money, not PPP. It's a big market and growing at a respectable rate despite the efforts of President Dingbat to spread chaos and disharmony across the planet -- a process known as "Making America Grate Again"

      Average Chinese incomes appear to be only a fifth of American, so probably China should still be given some special treatment. But it may be time to start slowly phasing special treatment out. After all, China will likely have the largest economy on the planet within a few years and it does seem a bit weird for an economy that size to get special treatment designated for the "least developed countries"

      1. devTrail

        Re: Have the cake and eat it

        The problem is more one of access to the Chinese market. ...

        I beg to disagree. It's been American outsourcing that turned China into a big market. I heard corporations wailing that the Chinese were copying their products for decades, back then there wasn't a Chinese middle class making China an interesting market.

  3. I_am_not_a_number

    Questionable quality...

    Even if they can't restrict the IP theft, the phrase "cheap chinese knock-off" is not for nothing.

    They put great value on image, but f* all on quality.

    People aren't stupid and will vote with their wallets.

    1. Zog_but_not_the_first Silver badge

      Re: Questionable quality...

      But that's changing fast...

      I'm old enough to remember the utter horror of receiving a Christmas present that was "Made in Japan".

      1. bpfh

        Re: Questionable quality...

        Good old may by J. A. Pan. Now it's all made from premium quality chinesuim.

    2. Simon B-52

      Re: Questionable quality...

      "People aren't stupid"

      Oh, if only that were true, if only........

  4. An nonymous Cowerd

    and ECHELON?

    Quote REPORT, FINAL Session document, 7 September 2001 A5-0264/2001 European Parliament

    "on the existence of a global system for the interception of private and commercial communications" (ECHELON interception system) (2001/2098(INI))

    pardon me if I shout, but some ex-members of the royal tank regiment are possibly a bit hard of hearing

    Concern was aroused in particular by the assertion in the report that ECHELON had moved away from its original purpose of defence against the Eastern Bloc and was currently being used for purposes of industrial espionage. Examples of alleged industrial espionage were given in support of the claim: in particular, it was stated that Airbus and Thomson CFS had been damaged as a result

    this is from http://cryptome.org/echelon-ep-fin.htm Page 11 of 88, I've no idea if the docu has been hidden since then

    ECHELON of course is now subsumed into the PRISM mess, apparently, and the previous attackees are now tier-pardner consumers of the raw intel, apparently.

    so China is evil for IP theft today, (maybe true) but may well be a PRISM tier partner in seventeen years?

    explain international integrity & statecraft to me once again, please, I'm slightly confused

    1. ArrZarr Silver badge
      Coat

      Re: and ECHELON?

      Officially, as a country, you aren't supposed to steal knowledge.

      Unofficially, as a country, you are supposed to steal knowledge.

      The line between Officially and Unofficially is quite fuzzy.

      China can't see the line. They are taking, as it were, the IPiss.

    2. Jack of Shadows Silver badge

      Re: and ECHELON?

      Yep. There is a reason why the US Trade Representative is on the CC: for all NSA intercepted traffic.

  5. Jay Lenovo
    Facepalm

    Short-sighted Stupidity

    Companies go to China:

    Stockholders cheer, local workforce depends more on government.

    Companies get hijacked from China first polices:

    Stockholders demand government involvement, local workforce shares their knowledge of this place called "The Shaft".

  6. Anonymous Coward
    Anonymous Coward

    so just like the US before 1914 then ?

    no wonder the US are pissed. Someone has stolen their trick of stealing IP to become a world leader.

    1. J. R. Hartley Silver badge

      Re: so just like the US before 1914 then ?

      Yep. They don't like it up em. Well, some of them do.

    2. vtcodger Silver badge

      Re: so just like the US before 1914 then ?

      Someone has stolen their trick of stealing IP to become a world leader.

      We (the US) largely gave up stealing IP many decades ago. For example, we passed on the opportunity to grab the tooling for the VW Beetle after WWII. So did the British -- on the grounds that the car was "Ugly and noisy". http://www.bbc.com/culture/story/20130830-the-nazi-car-we-came-to-love

      (But we did grab Werner von Braun and much of his rocket team from Peenemunde.)

      1. Anonymous Coward
        Anonymous Coward

        @vtcodger - Re: so just like the US before 1914 then ?

        and Avro Arrow from Canada, Lampyridae from Germany and perhaps many other we don't know about

      2. Anonymous Coward
        Anonymous Coward

        RE:We (the US) largely gave up stealing IP many decades ago.

        Of course. Once you've nicked enough to make yourselves a mint, you can afford to play nice and bully others.

        The only reason I know about the rather ... lax approach to IP is because Gilbert and Sullivan were forced to put on shows in the US themselves to establish prior art, as (at the time) the US did not respect international copyright.

  7. Gene Cash Silver badge

    Biggest market

    This is what happens when a country is the biggest market in the world... they get to set terms and conditions for accessing that market.

    If you don't like them, then just don't do business in China.

  8. Anonymous Coward
    Anonymous Coward

    When asked for IP details, schematics, software etc., just generate something that looks good - don't give them the real thing. So far they have never come back to us and said, "But your software doesn't work all the time."

  9. RobThBay

    So now presidiot Trump wants the WTO's help. Didn't he say the WTO was useless and irrelevant earlier this year?

    Oh yeah, now I remember.... the WTO is only useless when it disagrees with Mr MAGA.

  10. SuperG

    Cry us a river

    For all the bawling about IP theft...No one's forcing anyone to sign those contracts - they're more than welcome to walk away.

    It's just like those "arbitration" employment agreements the wingnuts here are so enamored of.

    1. Frank Gerlach #2

      FALSE

      By means of the state-level trade policies and practices, Chinese companies enjoy many advantages over their EU and US competitors. It is by no means "free trade", but a one-sided affair which hugely benefits Chinese corporations.

      The chicoms have been playing the "third world country" card to gain unfair advantages and they still exploit it, despite commanding entire markets such as telecoms equipment. Our corrupt elite allowed them to destroy Nortel and Alcatel-SEL.

      This must stop or Europe will descend into some sort of third world area.

  11. Pier Reviewer

    >> Article 66 of TRIPS encourages developed countries to transfer IP to "least-developed" countries.

    ...

    With skyscrapers dominating the skylines of the Middle Kingdom's supercities, it's debatable whether China qualifies as underdeveloped.

    Least developed != under developed. The former is subjective, the latter objective.

    The simple fact of the matter is the US/EU whinge about it (understandably) but keep doing it. If it’s that bad, stop doing it (i.e. pay to build capacity in your own backyard) or STFU.

  12. Anonymous Coward
    Anonymous Coward

    A Chinese student once told me....

    A Chinese student at university once told me how in Chinese universities a small number of people do the work and the rest of the class copies. I suggested that the geeks could decide to not give away their hard work, to which he looked at me in shock and said that they would have no friends.

    I asked about interviews for jobs, he told me by way of example that if 20 positions are available for a job, 18 or 19 will be filled through 'who you know' and the remaining will be filled based on ability..... meaning that it is considered normal and acceptable to exploit the nerds.

    Could it be that western organisations are having their collective head flushed down the toilet, without realising that the culture they are partnering with is in the habit of waiting for their nerd 'friends' to produce and then unashamedly swooping

    1. David Pearce

      Re: A Chinese student once told me....

      Just like the West then. with the MBAs earning far more than the people who do the work.

  13. Big Al 23

    Don't cave to the pressure

    Companies should not cave to Chinese pressure to disclose IP. Eventually China will be forced to conduct business properly or lose out.

    1. This post has been deleted by its author

  14. JeffyPoooh Silver badge
    Pint

    Dumb...

    So Apple stops using Foxcon. Now somebody has to actually buy an iPhone and take it back to Shenzhen for examination and disassembling.

    Delta: One month.

    Same with electric cars.

    There are very few counterexample where the critical IP can be secured within an IC that cannot be penetrated or bypassed.

    1. Frank Gerlach #2

      Re: Dumb...

      More a matter of: China wants "Joint ventures" for high speed trains. They demand technology transfer from each "partner" (read: victim).

      A) Get the wheel and suspeńsion technology from Alstom

      B) Demand the realtime control software from the Japanese

      C) Require Siemens to share the motors and HV technology.

      D) Combine A to C in order to build a Chinese version

      E) Stop buying any train technology from the Japanese, French and German S4ckers.

  15. DeeCee

    so they took their IP to China knowing China WILL steal it(it was written in chinese law) just to exploit lower workers rights/pay and environmental standards, and now they complain?

    and why the hell western governments dont respond in kind against chinese companies?

    1. Frank Gerlach #2

      It appears that a tiny elite profits from shipping European and US jobs to China. Because they can then expand their IT empires a bit faster as compared to using US or EU hardware.

      Google, FB, Apple - megalomanics who care only about themselves and have a strong lobby in Brussels and Washington.

  16. Frank Gerlach #2

    One-Sided Contracts, Chinese Steamroller

    The Chinese (by means of Huawei and ZTE and the like) have already destroyed a major part of European and Canadian telecom equipment makers: Nortel, Alcatel-SEL. Nokia and Ericsson are in bad shape.

    The Chinese can export whatever they want into the EU at small customs rate, but our companies must produce cars and the like in China, if they do not want to suffer punitive customs rates. Plus we need to hand over lots of IP in the process of "local production".

    In other words: the incompetent elite of the EU has signed "one sided contracts" with China and the chicoms exploit it to the max. It is high time to stop this insanity, before we have more our our economy steamrolled. Plus, the Americans are right about the security and defense implications.

    http://altwissenschaft.ddnss.de/EDV_Spannungsfeld.html

    Google Translate will probably deliver a quite usable English version.

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