A core assumption of Western IP law is that innovation will not happen unless the government offers innovators and entrepreneurs a limited legal monopoly on the fruits of their labors. It is even written into the US constitution that: "The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Developments in open source have demonstrated that innovation can flourish in the absence of a monopoly, although the implementation of open source requires a wry twisting of compulsory copyright law. Emerging IP ecosystems, such as China's, come from a different cultural background. US IP pundits are quick to dismiss these emerging IP ecosystems as lawless, anti-innovation, and unproductive. However, my experience indicates that the weaknesses of the US IP system are understated, and the strengths of the China IP system are uncelebrated. This talk explores these weaknesses and strengths from the standpoint of an SME entrepreneur/innovator.

1. gong kai
Open vs. 公开
bunnie
blinkBL_NK
Singapore, April 2013

2. The Western IP “Social Bargain”

The Congress shall have Power ... To promote the Progress of
Science and useful Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to their respective
Writings and Discoveries.
Material reward for Sharing of ideas to
risk taking behavior promote crowd
via monopoly rights sourced innovation

3. A Technological Eternity

“Limited Times”:
− Patent: 20-year =
8088 (introduced 1979, 5 MHz)
Pentium III “Coppermine” (1999, 800 MHz)
− Copyright: 120 years (for corporations)

4. Motivations Change

Monetary wealth is no longer the sole driver of innovation
− Public recognition
− Legacy
− Curiosity
− Altruism

Open source was thus bourne of closed-source law
Liability protection Sharing of ideas to
and public promote crowd
recognition sourced innovation

5. “Open” is not “Public Domain”
Remember: Open is borne of IP law that defaults to a closed system.
<one line to give the program's name and a brief idea of what it does.>
Copyright (C) <year> <name of author>
This program is free software: you can redistribute it and/or modify
it under the terms of the GNU General Public License as published by
the Free Software Foundation, either version 3 of the License, or
(at your option) any later version.
This program is distributed in the hope that it will be useful,
but WITHOUT ANY WARRANTY; without even the implied warranty of
MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the
GNU General Public License for more details.
Copyright [yyyy] [name of copyright owner]
Licensed under the Apache License, Version 2.0 (the "License");
you may not use this file except in compliance with the License.
You may obtain a copy of the License at
http://www.apache.org/licenses/LICENSE-2.0
Unless required by applicable law or agreed to in writing, software
distributed under the License is distributed on an "AS IS" BASIS,
WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
See the License for the specific language governing permissions and
limitations under the License.

6. Open is Legally Intense

7. Open Software Everywhere

8. Open Hardware...where?

9. A Mismatch to Hardware?

OSHW mailing list debate topics:
− Is sharing schematics in Orcad format (proprietary editor) “Open”?
− Is it open if manufacturing methods are not also released?
− Is it open if you incorporate closed components?
− Is it open if you don't disclose certain firmware components?
− “Layers of openness” – at what point do we stop?

“And in practice, documenting the full set of procedures to make any technological item is
not just silly, but nearly impossible. (I only have a vague notion of how to extract copper,
tin, and gold from ore. But I don't think that a given circuit board design is "closed" when the
designers fail to include those procedures as part of their documentation.)” – Windell Oskay

Hardware, the OSI underdog:
− “Can you give an entity that actually is going to own patents a reason to sign this?
That's the really hard part. I think to do that, you need to be providing something
of value.” - to-remain-unnamed open source software “thought leader”

10. Does it have to be this way?
Typical 公开 Hardware, as Typical Open Hardware, as
practiced by 山寨 (Shanzhai) practiced by Hackers
- 260 MHz 32-bit CPU, 8MiB RAM - 16 MHz 8-bit CPU, 2.5k RAM
- Quad-band GSM - USB serial interface
- Bluetooth - Voltage regulator
- OLED display - $29 qty 1
- MP3 player
- Li-Poly battery
- $12 qty 1

11. Docs for both are Accessible...

12. The Fruits of 公开

13. 公开 doesn't “play by the rules”
 Many documents are
marked as
“confidential” or lack
copyright notices
 Acquisition through
sharing sites with
“mutual exchange”
rules (contribute-to-
download)

14. Different Systems:
公开 vs. Open

公开 isn't “open” in the legal sense

However, from the standpoint of enabling
access it is similar
− Enables innovators to 'rip-mix-burn' in hardware

Is 公开 the realpolitik of Open Source
Hardware?

15. How does 公开 survive?

According to Western IP theory, the “basic bargain” is
broken:
− Innovators & investors should have no motivation to take
risk
− But, business is booming – and most of us have never even
heard of these companies

16. Does 公开 Destroy Innovation?
 Child's phone:
− Call home in case of emergency
− No ability to send SMS or play games
 Numerous attempts to design/launch
this in the US
− US: Firefly Mobile raised $10mm in
2005, today still in venture stage
− China: This product is produced by a
white-label factory in China, purchased
for $20, probably < $50k invested
− Recall: Xiaomi Started in 2010, sales
1.8 million units, valuation $4 billion,
2012

17. Observation

Everyone is still profiting from this arrangement
− Mediatek, whose confidentiality agreements are so
flagrantly violated, is the largest seller of chips in China
− Carriers sell more SIM cards
− App makers have more user terminals to target
− Contract manufacturers are employed to make devices
− Distribution & supply chain players largely unaffected
− Users have more choice, more competitive pricing, and
more products to choose from

18. Parting Thought:
Two Cultures, Two Methods

Western open is like one-to-many 
China 公开 is like a network:
broadcasting:
− Ideas are traded on a piecemeal basis
− Compulsory licenses granted to the
masses: either everyone can use it, or you 
Equivalent exchange (idea-for-idea)
must negotiate a license or monetary exchange (buy an idea)
− Rights to an idea persist “for an eternity”

Rights to an idea exhaust at point of
sale

19. Thanks!