TGIF: Vacuum Cleaner Inventor Says The Darndest Things

Thank goodness it is Friday

Sir James Dyson was quoted by Dan Milmo in the Guardian, here, saying:

"They are running the risk of being expelled from the WTO. They are creating an unlevel playing field by taking our technology and selling it all over the world." 

With "they" Mr Dyson means China. I understand Mr Dyson's frustration, but the quote is grotesque. China cannot be simply pulled out of the World Trade Organization (WTO) equation. China is one of its key players. The idea about the WTO is to resolve the issues via a binding dispute resolution system. When Mr Dyson would have said that a dispute resolution procedure could be started against China's lack of IP enforcement or non-compliance of the national treatment principle (treating foreign companies at least as good as domestic ones), it would have made more sense.  

Police in Shenzhen. Aren't we ... visible?
Photo: Danny Friedmann

In the piece Mr Dyson, who invented the bagless vacuum cleaner and the bladeless electronic fan, makes the following clueless allegations to China:

- "China benefits from strictly monitored IP regimes outside its own border, but has failed to crack down on domestic offenders as it pursues rapid economic growth." Does China benefit much from strictly monitored IP regimes, if their alleged infringed products cannot enter into other countries? Did China fail to crack down on domestic offenders? One can argue that China failed to crack down on domestic offenders inadequately or insufficiently. But to assert that China failed to crack down on domestic offenders is simply not true (think about all the campaigns with the fancy names, see here 2010 and here 2011).
Mr Dyson backs up his claim with anecdotal, evidence: a patent infringement case he won, but where the infringers did not pay the fine nor stop their infringing activities.
- "China's reputation among foreign investors is being diminished by the flouting of product copyrights and a two-speed patent system that appears to discriminate against non-Chinese applications."

With "product copyrights" probably intellectual property protection is meant, which includes invention-patents, utility-patents, design-patents, trademarks, copyrights and trade secrets. To make such sweeping statements is not useful unless they are backed up by research that gives the status on how the intellectual property rights of British industries or European industries are protected. Until now Chinese foreign direct investments did not correlate much with China's level of intellectual property enforcement level. It seems more to correspond to China's economic growth. And I have not come across evidence that foreign patents on average are examined slower. Very broadly speaking a utility and design patent takes about half a year and an invention patent can take up to two years time. 

Dyson, the company, is spending 10 million UK pounds per year on legal costs (according to an article by James Hurley in the Telegraph, see here) and is also inventive to bring the intellectual property in China challenges under the attention of people in British government, such as David Cameron (prime minister) and Baroness Wilcox (IP minister). 

Inconvenient truth about intellectual property infringement

A Dyson bagless vacuum cleaner costs about 4,000 Yuan in China. Factory workers in Shenzhen make about 1,200 Renminbi per month and middle class earnings are about 4,000 Renminbi per month. The inconvenient truth is that the more a company has spent on research and development (as is the case with Dyson) or marketing and advertising (as is the case with luxury brands) the bigger the incentive for infringers to ride on the coat tails of some other companies' economic activities.

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Are Intellectual Property Rights A Subspecies of Human Rights?

Damian Reece, Head of Business of The Telegraph was commenting David Cameron's trip to China. According to Mr Reece his timing to talk about human rights was wrong and therefore counterproductive. Instead, writes Mr Reece, he should have focused on intellectual property rights related problems in China. Read here.

Mr Reece is most certainly right that timing when talking about human rights can be of key importance. But this applies equally well for bringing up the subject of intellectual property rights. When, if ever, is it a good time to point with an accusatory finger to an official of another country in public about a sensitive issue, such as human rights or intellectual property rights? It is understandable that an politicians want to be transparent toward their consitituency about their critique in regard to another country. Mr Reece also suggests that human rights and intellectual property rights are completely separate issues. Are they? This is an interesting issue.

Professor Daniel Gervais wrote an interesting article about it. He describes the two schools of thought about the topic: cohabitation (conflict) model and compatibility model. In the cohabitation the negative impacts of IP on human rights are emphasised, such as the possible restrictions on the expression of free speech, problematic access to medicines etc. While the compatibility model stresses that the two go hand in hand.

Read Professor Gervais' article 'Intellectual Property and Human Rights: Learning to Live Together' (March 1, 2008) for the book with the same name, edited by Paul L. C. Torremans, published by Kluwer, here.

With Professor Gervais and also with Professor William Alford (who wrote in his famed 'To Steal a Book Is An Elegant Offense: Intellectual Property Law in Chinese Civilizatation' that the rule of law is a precondition for private rights, such as IP) I think the latter theory has most merit.

Are intellectual property rights a subspecies of human rights?

Professor Peter K. Yu advocates a human rights framework for intellectual property, read his research paper 'Reconceptualizing Intellectual Property Interests in A Human Rights Framework' (2007), here.

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