Copying Is Not Stealing: Asian Companies, Especially Chinese, Are Constantly Being Accused by Western Manufacturers and Media of Stealing and Copying Ideas, and Infringing Patent Rights. but Professor Kwaku Atuahene-Gima Argues That This Is Not the Case. Reverse Engineering Is Perfectly Legal and, Indeed, the Most Efficient Method of Adapting Products to Emerging Market Needs

Article excerpt

N0 ONE LIKES TO BE CALLED A THIEF or a cheat. Indeed, the easiest way to break the spirit and confidence of someone in any competitive activity such as sport, music, research, and other such endeavours is to charge them with being is a thief and a cheat for having stolen, copied and used someone else's ideas.

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So it is in the corporate world where the battle for the use of ideas to create products and services, business models and technologies has multi-billion dollars of market revenues at stake. In this world of high stakes, a key weapon to break competitors' spirit and confidence is to charge one with stealing ideas, patents, designs and technologies. Witness the running patent litigation war between Apple and Samsung in recent times and the billions of dollars at stake. This is scary stuff and only the strongest companies can withstand such charges on theft and the associated litigation wars.

Stifling competition

The 'thief' or 'cheat' label is also frequently used in an attempt to stymie the emergence of new competitors, particularly from emerging countries. In the latter game, it is not only individual companies making these derogatory charges, the cheerleaders are the print and electronic media with outlets such as BBC, CNN and The Economist serving as the conductors.

For example, products and services made by Chinese companies are frequently branded by Western companies and their media cohorts as imitations, knock-offs, counterfeits and copies. This is done for two purposes, both of which are aimed at stifling competition. The first is to instil in the subconscious of the world's consumers that Chinese-made products are of inferior quality and therefore not worth buying. The second purpose is to kill the spirit and confidence of Chinese companies as innovators and to brand them as companies incapable of coming up with original ideas in creating products and services. An implicit charge which you can spot without much effort is the one that says--Chinese people are not creative. If you think all this sounds like a conspiracy theory, just go back a few decades and hear what was being said about the Japanese, the Koreans and Taiwanese. Or wait a few decades from now to turn on your TV and read The Economist at a time when indigenous companies in Africa start to innovate the way the Chinese have.

Charges that companies in emerging economies are thieves and cheats are not only disingenuous, they are outright lies. Those who make those charges would like you to believe that to innovate you have to start from scratch with an original patentable idea.

Yet they know from history and the relevant laws and business research that reverse engineering, whereby a company disassembles a product or service, measures and analyses it in order to copy and imitate, is not only a better route to innovation for emergent firms, it is also legitimate and legal.

Listen to this: the US Supreme court in a case in 1974 ruled that patent and trade secret laws do not offer protection against discovery by fair and honest means such as by reverse engineering when a company starts with the known product and works backward to define and understand the process which aided the development and manufacture of the subject product or service.

Ralph Hanson in Motor Authority reports the story of Chery QQ, a compact city car produced by Chery Automotive in China. GM charged that the QQ infringed its design patent and was an illegal copy of Chevy Spark. A GM official stated that if both brand names were removed, one could not tell the two cars apart and that you can pull a door of the GM Chevy Spark and fit it on the QQ so well would the seals on the door hold. Yet the burden of proof of infringement was on GM to demonstrate how Chery got information about the Spark by illegal means, because reverse engineering is not illegal.

Patent law and copying

Indeed, one of the pillars of patent law is that once a patent has expired, copies can be made by anyone who so desires to do so. …