Tag Archives: Intangible Investor

Up to $600 billion in U.S. IP is stolen annually by foreigners, says report

An IP Commission study finds that foreign sources, especially China, are responsible for the bulk U.S. theft.

Counterfeit goods, pirated software, and theft of trade secrets together represent a “systematic threat” to the US economy of between $225 billion and $600 billion annually, according to the findings of a 2017 research report from the bi-partisan IP Commission, The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy.

The massive theft of American IP—from companies and universities across the country, from U.S. labs to defense contractors, from banks to software companies—threatens the nation’s security, says the report.

The research, and update of a 2013 report, is the work of the bi-partisan IP Commission and was published by the National Bureau of Asian Research (NBR) NBR conducts advanced independent research on strategic, political, economic and other issues affecting U.S. relations with Asia, including China and Russia.

The Intangible Investor in June’s IAM features a full perspective on the report, “Foreign sources responsible for most IP theft.” Subscribers can find a copy here.

Pioneering Research

Kudos to the IP Commission for establishing a beachhead in the global war to combat IP theft and cyber crime. Its pioneering research provides American and other lawmakers, businesses, investors and the public, with data about IP infringement that are cannot be ignored.

However, the report falls short. Identifying and stopping infringement, including cyber-espionage, should not be restricted to sources outside of the U.S.  The IP Commission’s research zeros in on foreign counterfeit, trade secret and copyright violations. It does not account for increasing domestic patent infringement and copyright abuses, which have profoundly affected the software, recording and other industries, and impacted U.S. jobs.

To be fair, this IP Commission’s focus is foreign IP threats, and it is a daunting task to estimate the financial impact of domestic invention theft on U.S. businesses – not just what gets reported in the press about settlements and licenses.

But speaking to a range of IP attorneys and holders, it becomes clear that much IP abuse comes from domestic IT businesses, Internet providers, streaming services, individuals and others that know they are unlikely to be caught infringing rights or will have to pay for a license. By the IP Commissions own admission, IP theft is less benign than it might appear.

The theft of American IP is not just the ‘greatest transfer of wealth in human history,’ as General Keith Alexander put it; IP theft undercuts the primary competitive advantage of American business—the capacity for innovation.

Inspiration and a Challenge

The IP Commission’s timely report is a challenge to IP holders, and lawmakers alike who are concerned about innovation and commerce. It is a call to examine the source, type, and level of domestic IP rights theft, including patents, on SMEs, inventors, and universities, and how they affect the economy now and are likely to in the future.

The full 24-page update, The Theft of American Intellectual Property: Reassessments of the Challenge of the United States Policy, is well worth reading. Visit  www.ipcommission.org.

The original 2013 report, Report of the Commission on the Theft of American Intellectual Property, is also available and useful for comparison. 

Image source: ipcommission.org; linkedin.com

Bloody AC-DC patent war depicted in new novel by Oscar winner

If you thought the 19th Century was a kinder, gentler time for the people responsible for break-through inventions, you would be mistaken – it was not much better than today. 

The bitter battle for the electricity standard between Thomas Edison and George Westinghouse was nastier than a bar room brawl. It has all the drama of a Hollywood movie, which, in fact, it is currently being made into.

Last Days of Night is a New York Times best-selling historical novel written by the Oscar-winning writer of “The Imitation Game.” It tells the true story of the battle between direct and alternating current for the electricity standard, one that involved fundamental patents, lawyers (Paul Cravath, 18 months out of Columbia Law School), lawsuits (312 of them), bankers (J.P. Morgan), a phobic inventor (Nikola Tesla), the press, and electrocutions of animals and a human.

Keen Observer

Last Days of Night is not classic literature. Its short chapters give it the feel of a pot-boiler. However, the book’s is timely for an ability to reveal character – good and bad – in the face of adversity and is a keen observer of the inventive process.

It is no surprise that its author, Graham Moore, won an Oscar for his adaptation of The Imitation Game, the story of British mathematician Alan Turing, who cracked the Nazi’s enigma code, but who was a victim of his time.

Moore is currently adapting Last Days into a major motion picture starring Eddie Redmayne, who won the Best Actor Oscar for his portrayal of the young Steven Hawking in The Theory of Everything. The Last Days movie, with an all-star team in control, has a good shot at achieving what few books and films have: a realistic portrait of the relationship between inventions and the people and systems that drive them.

Deeper Dive

IAM subscribers go here for the May issue, which contains “Book Sheds New Light on an Epic Patent Battle,” a deeper dive into this strangely inspiring, mostly factual, novel that reminds us that the premium on new ideas is as tied to people as it is to capital and genius.

Much to his credit, Graham Moore’s provides a lengthy note from the author, detailing what he condensed in the novel and why. His historical timeline (mrgrahammoore.com) helps readers to separate fact from fiction, for a fuller appreciation of the people and events that helped to secure a bittersweet victory for AC.

To purchase Last Days of Night, go here.

Image source: mrgrahammoore.com


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