Debating Chinese Innovation At Davos

The Chinese “Summer Davos” just ended yesterday (Sept. 12) in Tianjin with  Premier Wen Jiabao, several heads of state and senior leaders, Thomas Friedman, and many CEO’s and leading business officials attending and speaking.  The Summer Davos has a clear focus on intellectual property and innovation.    In his presentation, Premier Wen also sought to give comfort to foreign investors:  “I want to tell you that we will strengthen IPR protection and give foreign companies the same treatment in government procurement.”  The reassurance on government procurement at a high level was especially comforting.

I was invited to debate whether governments have gone too far in protecting IP.  If the debate was a microcosm of public concerns over IP issues, it showed that public knowledge of IP issues has a long way to go.  Many individuals in the audience voiced skepticism over the value of the IP system, and conflated concepts such as “patents” with “monopoly”, or “open source” with a system that “lacked IP”, or “patent trolls” with a need to discard the patent system, etc.

While we all acknowledged that the system isn’t perfect and needs improvement, China’s IP developments offered some interesting rebuttal points for many arguments voiced by a skeptical audience.

One participant noted that Davos had once considered what a world without IP might look like – with many CEO’s ultimately deciding that they could survive without IP.  A Chinese entrepreneur took a contrary position: the problem with the current system is the inability of innovators to fully recover their investments due to weak enforcement. Several participants noted that without IP, start-up companies would never have gotten off the ground, and that the IP system does provide a system for monetization and investment.  While I seconded these positions, I also argued that the laboratory for such a proposition had existed historically in China until the late Qing dynasty, where a lack of IP protection had condemned China to pre-industrial development, and there was no going back.

Patent trolls were also a topic.  Again, however, China offers an example of a country where there are not merely low quality patents, but no-quality patents due to the lack of substantive examination for utility model patents and designs.  The answer to the “troll” problem is not throwing out the patent system, but improving the legal system: examining patents, insisting on candor before the patent office regarding prior art, and providing legal disincentives against their assertion in courts.

Who won the debate? We were able to move the audience by a few votes in our favor by the end of the program.  In a modest way, the voices of greater IP protection in China won.

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