

China Corporate Espionage Boom Knocks Wind Out of U.S. Companies (2012) - kumarski
http://www.bloomberg.com/news/2012-03-15/china-corporate-espionage-boom-knocks-wind-out-of-u-s-companies.html

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AustinDev
I actually had a discussion with someone who holds a masters of law in China
and recently started attending law school in the US for their JD. The issue of
intellectual property came up when we were discussing possible career paths
after graduation and I was quite astounded when she told me that she didn't
think the industrial espionage was that big of a deal and couldn't be costing
US companies that much money. I was very surprised by the dismissive attitude
toward IP.

I'm all for more sane patent laws but outright source code theft seems to be
far past the line... Is this attitude common among educated Chinese or was my
experience just a one-off anecdote?

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analyst74
Traditionally, there is no such thing as "stealing knowledge", and to the
extreme, there is old saying about stealing books is not real theft.

IP law was enacted quite recently, heck, even the rule of law itself (as
opposed to rule of men) was fairly recent transformation of the society. I
feel this wikipedia entry describe it fairly well:
[https://en.wikipedia.org/wiki/Legal_culture#Chinese_legal_cu...](https://en.wikipedia.org/wiki/Legal_culture#Chinese_legal_culture).

So yes, IP and patents carry no where near the level of respect as United
States or similar countries.

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jobu
There was a great article on Ars Technica years ago (decade+) that talked
about weak property law in general and intellectual property in particular
being a necessary part for developing countries to succeed. As they grow the
value of all property increases to the point where property law becomes much
more important and strict. It was a really good read, but it doesn't seem to
be available online anymore.

Also, from the article: _" In the 1870s, American textile companies would send
employees to work in British factories. They would take notes on textile
equipment and bring back the information. The Russians and East Germans stole
U.S. computer and chip designs during the Cold War."_

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jgroszko
Since this article is 2 years old, the follow up is that China's Supreme Court
has ruled in favor of AMSC, but the lawsuits are still bouncing around Chinese
courts:

[http://www.bloomberg.com/news/2014-02-19/china-supreme-
court...](http://www.bloomberg.com/news/2014-02-19/china-supreme-court-ruling-
favors-amsc-in-two-sinovel-suits-1-.html)

~~~
mbreese
If my brief reading is correct, the ruling was that the case should be heard
by lower courts and not sent into forced arbitration. So, while this was a
"win" it isn't even close to being over.

Meanwhile, the Chinese company was being sued in US courts as well...

I think that the biggest risk for Sinovel to come out of this is that Sinovel
will have no international export market. It wouldn't surprise anyone if they
manage to get away with this in their home market, but if they try to export
anything, they'll have to contend with international courts. Which means that
they will have very few prospects for export sales.

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wlesieutre
Off topic, but "an industrial computer the size of a couple of cigarette
cartons" seems like an awfully strange comparison to make. Surely I'm not the
only one who has no idea what size boxes are used for cases of cigarettes? I
know how big a pack is, but I'd have to look up how many packs make up a
carton.

Why not something more universal like shoe boxes?

~~~
ertdfgcb
Amusingly, even though I've never smoked or even bought cigarette, I still
have a pretty good idea how big a cigarette carton is because everyone always
uses them for comparison.

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fspeech
"The arrangement was working the way it was supposed to: China would turn out
the commodity hardware -- the turbines -- and a U.S. company would retain
control of the high-margin intellectual capital-end of the business."

"AMSC’s products accounted for about 12 percent of a Sinovel turbine’s cost in
2008, according to public filings. By 2011 they made up 18 percent, said
Schwartz, the U.S. consultant."

"Even if Sinovel wanted to renege on its contracts, all its existing
1.5-megawatt turbines were powered by AMSC electronics. If the company wanted
the upgraded LVRT software, Sinovel would have to come to the table."

Is it that hard to see that this relationship was not sustainable?

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fspeech
With the help of hindsight we can now see that Sinovel got itself into a bad
deal (actually a series of bad deals with other suppliers as well not just
AMSC). It likely acted more out of desperation than greed. It is not even in
the top tier of Chinese wind power manufacturers any more.

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maerF0x0
tag this [2012]

~~~
kumarski
sorry.

