With the growth of economically advanced countries, there is no shortage of technologically sophisticated and predatorial bad actors…engaged in economic and competitive advantage intelligence collection and IP infringement, and their targets are increasing in number. In circumstances where the ‘bad actors’ may variously be state sponsored, their undertakings range from the acquisition and integration of extraordinarily valuable ‘game changing’ technologies which can variously and rapidly render industries more competitive by providing rapid market entry and potential competitive advantage (trade) boosts. Once this occurs and is embedded as routine business (lucrative) culture, it is challenging to reverse, or make ‘go away’ merely by imposing unilateral sanctions or tariffs.
Theft, acquisition, use, and potential repurposing of another’s intellectual property along with the underlying intellectual and structural capital, is indeed, a global-phenomena…which I and others, have devoted many years of investigative research, writing, publishing, and public speaking, including visits to numerous countries to grasp its scope, including how, why, when, and its various (obvious) lucrative components
For context, please consider this example…the point at which an economic-competitive advantage adversary (globally), either through human or technological intelligence collection, can produce detailed images of targeted intellectual-structural capital, ala a product, which perhaps may still reside in R&D stage and ‘reverse engineer it’, its quite possible, within 7-14 days, there will be counterfeit (lesser quality) reproductions appear for sale at ‘swap meets’ if not, in the early stages of being integrated into heretofore legitimate supply chains.
I served as one of four principal investigators to…a nationwide study-survey sponsored by the American Society for Industrial Security International and the Office of the National Counterintelligence Executive regarding ‘theft of proprietary information’.
I have also had the privilege, as an academic (independent) researcher, to secure in depth discussions, with…
- numerous private and public-sector officials who are fiduciarily obliged to have operational clarity with a range strategic issues with respect to who, how, what, when, where, and why aspects of (economic) espionage perpetrated against U.S. companies and the U.S. government.
- individuals holding administrative oversight roles in Carnegie I and II research universities to acquire insights regarding their familiarity with theft, infringement, and/or misappropriation of researchers’ intellectual property and proprietary information.
A significant percentage of the latter whom I have engaged about IP theft matters…beginning in the early 1990’s, are (1.) very reluctant to admit, or (2.) wholly dismissive of their (company’s) vulnerability, probability, and the criticality of theft, infringement, misappropriation of their intellectual property and/or proprietary information, and (3.) the inevitable reputations risks that commonly follow.
On the other hand, the large numbers of business leaders I have engaged in conversation about IP theft who represent intangible asset intensive and dependent companies which are already engaged in trade – transactions with companies – countries where IP theft – infringement is prominent, frequently hold personal familiarity with such acts.
For obvious reasons, ala ‘company reputation’ and the necessity-pressure to repeat trade transactions…few business leaders convey comfort ‘to go on the record’, anecdotally, or otherwise, regarding their observations and experiences about their company being victimized, i.e., having incurred infringement, misappropriation, and/or theft to its intellectual properties, proprietary information, and/or trade secrets.
That said, when the current administration portrays IP theft – infringement as…being receptive to curtailment through deterrents, i.e., unilateral tariffs, I believe such portrayals actually-convey an (operational) unfamiliarity (historically, technologically, and culturally). Insightful unfamiliarity with specific subject matter of national importance spawns misconceptions and generalities which do little to advance the already contentious diplomatics occurring elsewhere.
It’s absolutely essential to recognize…private sector U.S. companies endeavoring to conduct profitable, long term trade and business transactions in China, will be dealing with Chinese government policies and practices in addition to the early stages of a second generation of privatized business. So, while the issue at hand for a single U.S. company may be safeguarding its intellectual property, for the U.S. administration, the issue should be far broader.
Brand, branding, and brand licensing…are other forms of intellectual property rights enforcement, for which infringement, misappropriation, and counterfeiting are not insignificant matters that necessarily require perpetual oversight, that is if competitiveness and profitability matter.
Again, the fact that China, and numerous other countries, and their governments…have variously sponsored, as well as, aggressively engaged in various forms of ‘economic espionage’, is nothing new. It has been occurring for decades, if not centuries. And, in numerous instances, the theft, infringement, and misappropriation of intellectual property, and/or product counterfeiting have become – are integral to numerous countries economic and social advancement and GDP (gross domestic product), China being no exception.
Generally, it’s a good thing. to elevate business and public awareness about the globalization of intellectual property theft…but, doing so through simplistic phrases and personalized quips as rationale for imposing tariff’s, as a presumed deterrent, may not end well. And, neither is presenting a complex, multi-variable, and deeply embedded matter as this, by espousing broad, angry, fist-clenched, generalizations. Too me, this suggests the speaker presumes the U.S. public may not be able to understand the distinctions, complexities, and consequences, and economic impact of stolen – misappropriated intangible assets and intellectual property. Through this lens, that is an error in judgment!
So, government officials and the multitude of echo-chambering pundits, with some notable exceptions, find it to easy to portray…the intricacies and nuances of intangible asset infringement, misappropriation, and data mining with presumably the more understandable and singular phrase ‘theft of intellectual property’. Doing this, based on my various experiences, does not draw sufficient attention to the significance of the matter into context, unless, of course, it is your company which has been victimized, causing significant employment cutbacks and other forms of downsizing along with other obvious adversities
It is particularly important for proponents of this and other similar papers, acknowledge…amid all-of-the discussions and debates regarding U.S. continued role in international trade and globalization, that, it is…
• an economic fact today, that 80+% of most company’s value, sources of revenue, competitiveness, sustainability, and growth potential lie in – emerge directly from intangible assets, parts of which are – may already be legitimately issued intellectual property, i.e., patent, copyright, trademark, trade secret.
• more companies are indeed ‘intangible asset intensive and dependent’.
I urge readers of ‘The Business Intangible Asset Blog’ and audiences to whom I speak…to avoid characterizing this global phenomena as merely distinctions without a difference. It is indeed much more. That-is to say, a company’s intangible assets, e.g., its intellectual, structural, and relationship capital, ala specific knowledge and know how, routinely and simultaneously underlie – serve as foundations to all (conventional) intellectual properties. https://kpstrat.com/wp-admin/post.php?post=3894
It is, after all, intangible assets which are the real targets…that produce the most lucrative benefits to those engaged in theft of proprietary information, economic-competitive advantage intelligence, and data mining. The latter being consistently conducted 24/7/365 globally by just about anyone – anywhere with a laptop connection and some rudimentary ‘business intelligence’ skill sets. So, to lay this entire matter solely at the doorstep of China, may be a starting point, but it’s far from being an ending point!
Michael D. Moberly – originally published April 5, 2018 – restructured and re-published on October 9, 2018 – St. Louis – [email protected] ‘The Business Intangible Asset Blog (since May 2006) where one’s attention span, business realities, and solutions converge’!
Readers are invited to explore other posts, books, and papers I have published at https://kpstrat.com/books/