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All SNS member levels can purchase past issues of the SNS Global Report and SNS FiReBooks at the SNS Store. Premium-level subscribers can also access the complete searchable archive at login, at www.stratnews.com. "Protecting Your IP Flows" A FiRe 2016 Panel Evan Anderson, Director of Research (and now CEO), INVNT/IP With host Jeff Hudson Future in Review 2016 Conference
All photos © 2016 Kris Krg
Jeff Hudson: This is the low-circadian-rhythm portion of the day, is that correct? Does everybody need to stand up and wave their arms around? We're going to talk about a really important topic so I need you [waving arms] thank you, thank you. I need you to be on it because it's kind of really important to the future and just about everything we do in the world. Pay attention to the video we're going to show, because it is the most watched - this is an excerpt from the most watched investigative segment ever shown on 60 Minutes, and we're lucky that we have people here that contributed to the intellectual property that drove the story line and did the investigative work on that. So, you want to roll the video? [Click here for video and transcript of the 60 Minutes segment "The Great Brain Robbery"] Hudson: So there you have it. Daniel McGahn: That was the sad part. Hudson: That was the sad part? McGahn: Yeah. Hudson: We'll get to the sadder part. So China is stealing intellectual property with impunity. They take inventing countries' IP - companies like American Superconductor's IP - they do it with impunity, there are no laws that reach to them, there's no ethical or moral boundaries or strictures that they work under. So now I'd like to introduce a very smart group of people that are going to hold a conversation with all of us about what this is about and what we need to do about it. First of all, my name is Jeff Hudson. I'm the CEO of Venafi, and we fight the bad guys, like China, on behalf of our global customers - the Global 5000 - every day. [Gesturing to Evan Anderson] Introduce yourself. Evan Anderson: Evan Anderson, Director of Research, INVNT/IP. Richard Marshall: Rich Marshall. I'm the wringer in the group. Picture me 20 years younger, 40 pounds lighter, with a ponytail. I was a hacker. The statute of limitations has run out [laughter]. So, I've done a lot of policy work at the national level and also with corporate groups to help formulate strategies to help address this particular issue. McGahn: I'm glad I'm sitting far from the hacker; that's good. [Marshall scoots closer, laughter] Now ... Marshall: I've already got your password. McGahn: You're funny. The funny thing is I don't really log in, so you could tell me what it is and I don't think you'd really get anything. I'm Daniel McGahn. I'm the president and CEO of American Superconductor. [Gesturing to Hudson] Is that what you wanted? I want to make sure we deliver what you ask us. Hudson: Thank you. I really appreciate that. As a moderator, trying to control this panel ... McGahn: We're under control. Hudson: Ok, good. McGahn: For now.
Anderson: Right. That's probably the most important question in this world in terms of the broad spectrum that we're looking at, and to understand it requires that you also understand a little bit about where the Politburo is in their own, you know, "personal journey" through running the country. So, China has been growing at an immense rate, and in large part that has been supported by the massive theft of intellectual property. The endgame is obviously and declaredly - on behalf of the Politburo, in their medium-to-long-term plans - to take over sectors of the economy. So they're envisioning building an economy. A huge part of that is, and they use different terms for it - "tech transfer," "redigestion" of someone else's IP - but the idea there is to take over sectors, essentially dominate the global market, and they have 402 sectors that they've outlined. They usually pick a few at a time, so they're kind of piece by piece trying to become dominant in the global economy. The other important aspect to that story is that they have to do that in some way; they have to have some sort of growth in order to maintain power. So they're hitting really good GDP numbers, and now they're slowing down, and we've all seen what's been happening in the South China Sea. While that's not going to be the only cause, a huge factor involved in that entire dispute is that if you don't have economic growth and you're an oppressive regime, the people will rise up at some point. If they're not getting anything from you, if your raison d'etre is to provide value for people even if the rule of law is harsh, and that stops happening and that value goes away, then you've got a serious problem. You need to rely on something like ultra-nationalism or something else to try to create a new explanation for your existence and for your cause of rule. So I think their endgame is broadly to build a new economy in China, and so far they've been mostly doing it by stealing. Hudson: Just in China, or to dominate the world economy? Anderson: They're clearly trying to dominate the world economy sector by sector. I mean, we see that over and over again. The way that they take out competitor firms and do it with such impunity. Hudson: So we have a capable adversary, they're attacking, and they're trying to dominate everybody in this room, and on a worldwide basis. Anderson: Yes. |
Hudson: Great. So, big first question: We know China is active; we know they're stealing IP. Evan, let me pose this question to you, and then we can all chime in. What's China's end game? Where does this go?