The apple is one of the most accessible forms of food for human beings. It grows on smallish trees, and when it is picked up from the ground or plucked from the tree it is ready to eat. Apples of different varieties mature at different times from early summer to late autumn, and many varieties can also be stored well into the winter; though it is well known that if one apple in a barrel goes bad, it quickly causes the rest to rot: hence the phrase 'a rotten apple' applied to a disruptively antisocial person.
When people in the earliest stages of civilisation created their accounts of how society came into being, they built up a marvelous story of the creation of the world, of humanity being set into that context as a uniquely competent species, and how that species developed a power to be destructive as well as constructive. The tale that of the first woman, Eve, being tempted to eat the forbidden fruit - an apple - and leading her male partner to do the same is still fascinating as an insight into human nature. The idea that there are good and evil impulses in humanity, derived from the fatal decision of the first people to break the orders they had received from the universal creator, became well set in religion in the 'fertile crescent' in the middle east [the area now being devastated by 'Islamic State'] and thence globally. The humble apple remains a symbol of the power that human beings have to use their abilities constructively and creatively, or destructively in terms of how their actions impinge on other people.
Isaac Newton apparently really did get the idea that the force of gravity is universal by exercising his imagination on the simple question of why do apples - among all other terrestrial objects; and with the earth's moon - tend to descend towards the centre of the earth unless that progress is stayed by some intervening force or structure. Thus the apple is recorded as part of the origin of scientific thought.
Today the corporate results for Apple are due to be published, which are forecast to confirm that it has been consolidated as the biggest business in the world; by turnover, profits and the valuation of its stock by the markets. The apple - with a human bite taken from it - was chosen as the logo of a business which was not a substantial processor or manufacturer of any material commodity. While the huge oil companies and motor manufacturers sold billions of dollarsworth of material commodities, many of which were processed into final products by the application of manifold patents and sold under copyright brand names, their ultimate dependence on material resources was unambiguous. Apple grew by franchising out the manufacturing processes, and thus the capital that had to be tied up in material manufacturing facilities came from other sources. Apple could incorporate products - some of them highly sophisticated - that were devised by other firms into the products that they sold, and thus maintain the momentum of their inventiveness without the burden of investment in factories or in the sort of human resources management that inevitably attaches to material production.
Apple, Google and the other leading brands in what is [rather strangely] called the 'technology' sector of the economy are not dependent on the ownership of materially productive facilities. Most of the 'hardware' through which customers access their intellectual property are made by other corporations. The assets held by the tech companies include billions of dollarsworth of financial assets that have been accumulated from their past profits, alongside their ownership of the patents and copyrights and trademarks and brands that are defended at huge cost from 'piracy' by anyone who tries to make illicit use of their technology.
The essential difference between these 'tech' companies and those that trade in material assets is that the companies in the material sphere, exemplified by the big oil producers and by the firms that make the components of the iPhone [and assemble the final product], are selling products made from finite resources of which reserves are limited. Constant exploration has so far found enough new resources to meet foreseen demand into the medium-term future, but the material components of the planet are finite and a growing population is capable of exploiting them to the point of exhaustion. The assets belonging to Apple are capable of indefinite expansion. New ideas can be implemented all the time, new experiences can be offered to customers, and there is no obvious limit to that expansion as the collective of human minds appears to be capable of delivering an infinite expansion of intellectual property. There is a potential limit to the physical facilities through which intellectual concepts and processes can be accessed, of course, when the human race destroys the resources of the planet on which our material existence depends. At some point in that final self-destruction of the human economy the material ability to generate electricity will fail, and then the 'technology' sector will be unable to operate; but that point will be well down the process of societal and economic decay.
I was privileged to know the mathematician who served as a professor of English Literature and who explored the capabilities and ambiguities of the human mind in an unusually profound way; who wrote a book entitled Seven Types of Ambiguity. He could have selected more than seven types but his message was that the expression of human thought is infinitely flexible, and ultimately all concepts are ambiguous. That is the basis on which the 'tech' sector has been founded, and from which its continuing productiveness will stem.
Showing posts with label copyright. Show all posts
Showing posts with label copyright. Show all posts
Wednesday, 2 August 2017
Saturday, 22 July 2017
Intellectual Property and Point Protection
Patents were invented in Europe, specifically in Monarchical France, and the concept was taken up enthusiastically around the continent. During the eighteenth century, France was way ahead of the UK in the number of patents registered; but by 1800 a clear difference was emerging: while most patents were never to make much money for their owners, some patents - notably British patents - were massively generative of wealth because they were fundamental to the change that was sweeping the United Kingdom into the predominant position in the process that was soon to be called 'the industrial revolution'. Then, into the nineteenth century, the process that led to the unification of Germany ran in parallel with the industrialisation of key areas in that territory; most notably in the Ruhr and Saxony, and around Hamburg and Bremen; and German industrialisation was accompanied by a flurry of patents that included an increasing proportion that were based on methodical research.
The United States developed as a group of former British and French colonies, with a significant proportion of German-speaking settlers helping to drive industrial growth in that vast continent. For a considerable period there was considerable piracy of European intellectual property in the emergent economy of the United States; and eventually the US legislature recognised the good sense of mutual protection of industrially valuable intellectual property [simply because, if the US stole from others, others could steal from them: and thus they could undermine each other]. But, even then, copyright in literature, drama and art seemed less important - especially in the context of US law which was designed to make the acquisition of information and education as cheap as possible - so such property was to be protected mutually much later; hence arose Charles Dickens' famous endeavours to get his new output into the hands of American readers before all the revenue was lost to pirates.
There are pseudo-scientific explanations as to why the UK and Germany, in particular among European states, have been prolific in inventing useful things and processes; but those theories do not explain why the USA has been at least equal to the European leaders in invention and innovation. The Great Exhibition in London in 1851 was meant to show the British people and the rest of the world the range and brilliance of British industrial output, and [to a certain extent] it did: but it also shocked the British visitors to see how sophisticated and clever the French, German and American innovations were. Britain was still primarily an agricultural country in 1851, and most of the urban population had only recently moved into town and still had links to the countryside: so to a huge proportion of the million or so Brits who walked round the Exhibition the most amazing device on display was the McCormick Reaper from the USA. The great plains of the USA were beginning to be prepared to grow crops, and the sort of mechanisation that the reaper represented showed how the American farmers would be able to undercut labour-intensive European suppliers of the principal cereal crops without needing to wait for a mass of immigrant labourers. One of the bizarre side-issues to emerge from the conversations that were driven by the perceived shift in the balance of advantage from Europe to America [and, to a much lesser degree, to Australia] was that Russia remained a peasant economy: the development of that vast empire would have been utterly transformed if the same extensive mechanised farming were to be installed there as in the USA. Russian peasants were still enslaved as serfs in 1851, and the Cossacks roamed free over the future wheatlands. The potential short-cut to massive advancement and wealth was not taken up.
Over the decades since 1851, Britain, Germany and the USA have remained the global leaders in invention and innovation: France and the low countries have been in the league too, but the dominant three have remained in the lead. And now the UK is going through the throes of implementing the decision to leave the protectionism of the European Union; and there is frequent mention of the notion that Britain can 'go it alone' with a hotch-potch of free-trade agreements with other countries: notably China and India, and maybe Brazil, alongside the USA. As the strongly emerging economies develop their industrial capability, they know that the mutual protection of patents will become ever more important. Chinese goods can simply be frozen out of the US and the EU if they are produced in breach of patent: so it is in the interests of the Chinese economy that the state becomes more and more forthright in protecting foreign patents.
On quite different grounds, the major economic blocks can close their markets to specific Chinese exports - or slap punitive tariffs on them - if Chinese exporters try to 'dump' that output in export markets at less than the cost-price of making the equivalent in the receiving country. Raising such barriers is what I have called point protectionism. Big economies, or economic communities, can retaliate against each other if they believe that point protectionism is unfairly being applied against them. This is a powerful tool in the armoury of each major economy. An isolated Britain will not have adequate leverage to apply against the emerging mass economies that might infringe British patents or apply unfair point protectionism against the UK. This is the decisive reason why the crazy Tory Brexiteers must be exposed for what they are, now. The European Union stinks, from the Parliament to the Commission to the Court; the UK must get as far away from those institutions as is feasible; while remaining in the necessary protection of the economic community.
The United States developed as a group of former British and French colonies, with a significant proportion of German-speaking settlers helping to drive industrial growth in that vast continent. For a considerable period there was considerable piracy of European intellectual property in the emergent economy of the United States; and eventually the US legislature recognised the good sense of mutual protection of industrially valuable intellectual property [simply because, if the US stole from others, others could steal from them: and thus they could undermine each other]. But, even then, copyright in literature, drama and art seemed less important - especially in the context of US law which was designed to make the acquisition of information and education as cheap as possible - so such property was to be protected mutually much later; hence arose Charles Dickens' famous endeavours to get his new output into the hands of American readers before all the revenue was lost to pirates.
There are pseudo-scientific explanations as to why the UK and Germany, in particular among European states, have been prolific in inventing useful things and processes; but those theories do not explain why the USA has been at least equal to the European leaders in invention and innovation. The Great Exhibition in London in 1851 was meant to show the British people and the rest of the world the range and brilliance of British industrial output, and [to a certain extent] it did: but it also shocked the British visitors to see how sophisticated and clever the French, German and American innovations were. Britain was still primarily an agricultural country in 1851, and most of the urban population had only recently moved into town and still had links to the countryside: so to a huge proportion of the million or so Brits who walked round the Exhibition the most amazing device on display was the McCormick Reaper from the USA. The great plains of the USA were beginning to be prepared to grow crops, and the sort of mechanisation that the reaper represented showed how the American farmers would be able to undercut labour-intensive European suppliers of the principal cereal crops without needing to wait for a mass of immigrant labourers. One of the bizarre side-issues to emerge from the conversations that were driven by the perceived shift in the balance of advantage from Europe to America [and, to a much lesser degree, to Australia] was that Russia remained a peasant economy: the development of that vast empire would have been utterly transformed if the same extensive mechanised farming were to be installed there as in the USA. Russian peasants were still enslaved as serfs in 1851, and the Cossacks roamed free over the future wheatlands. The potential short-cut to massive advancement and wealth was not taken up.
Over the decades since 1851, Britain, Germany and the USA have remained the global leaders in invention and innovation: France and the low countries have been in the league too, but the dominant three have remained in the lead. And now the UK is going through the throes of implementing the decision to leave the protectionism of the European Union; and there is frequent mention of the notion that Britain can 'go it alone' with a hotch-potch of free-trade agreements with other countries: notably China and India, and maybe Brazil, alongside the USA. As the strongly emerging economies develop their industrial capability, they know that the mutual protection of patents will become ever more important. Chinese goods can simply be frozen out of the US and the EU if they are produced in breach of patent: so it is in the interests of the Chinese economy that the state becomes more and more forthright in protecting foreign patents.
On quite different grounds, the major economic blocks can close their markets to specific Chinese exports - or slap punitive tariffs on them - if Chinese exporters try to 'dump' that output in export markets at less than the cost-price of making the equivalent in the receiving country. Raising such barriers is what I have called point protectionism. Big economies, or economic communities, can retaliate against each other if they believe that point protectionism is unfairly being applied against them. This is a powerful tool in the armoury of each major economy. An isolated Britain will not have adequate leverage to apply against the emerging mass economies that might infringe British patents or apply unfair point protectionism against the UK. This is the decisive reason why the crazy Tory Brexiteers must be exposed for what they are, now. The European Union stinks, from the Parliament to the Commission to the Court; the UK must get as far away from those institutions as is feasible; while remaining in the necessary protection of the economic community.
Monday, 26 March 2012
Boxed Patents
One of the good things that the Gordon Brown government did in the UK was partially to recognise that the economy has no hope of getting out of the hole that the political class has made for it unless the state recognises and rewards the creation of 'intellectual property'. Unsurprisingly, they did not understand the simple basic nature of ik, as explained in my PPE [see link from this site], but this was a step on the road to rational management of the most important of national resources.
Under the coalition the grasping hand of the Treasury has been allowed to influence the deign of the concept for protecting British intellectual property, and consequently the government announced their intention to create a 'patent box' . Under this category a company [or possibly a high-net-worth individual] would be able to secure a patent, and to implement it into production, and get tax exemptions and reductions at various stages in the process. The 2010 Coalition government declared that they would implement the plan and a few companies, including Glaxo, entered discussion with the government about using the process. Glaxo planned to extend their UK factories under a Box agreement specifically to exploit a new product for which it was in process of securing a patent. The company announced its decision to invest in the UK on Budget Day 2012 [as featured in the previous Post here], to accommodate the squalid spin doctoring of sad politicians who would seek any propaganda point in the absence of evidence of real economic progress. In this case, there was real potential in the investment. But [as already noted] the Patent Box is not the only inducement to locate industrial plant in the UK. British labour is becoming relatively cheaper as Chinese workers begin to enjoy consumerism with larger wages, and the tax system in the UK is becoming a little less oppressive. UK and EU Labour law and the omnipresent intrusion of inept and officious 'health and safety' regulations are still deterrents to investment, especially in physical production. But steps are being taken in the right direction, albeit they are hesitant and indecisive.
The bigger issue that is disclosed by the Glaxo announcement is that safeguarding intellectual property is becoming the most important consideration of companies in the global economy: and while the US government has become obsessive about China's 'theft' of such property the EU and European governments have still not grasped the heart of this issue. The leading British ministry, BIS, has focussed on reducing the period between the filing of a patent application and the manufacture of the product; which is a good thing if it can be achieved while maintaining the secret.
But the entire positive story is yet to be told: that Brits, including Glaxo research teams, are unusually fecund in producing both patentable inventions and marketable concepts. The world's leading advertising agents are British, and several of the world's best-known and highest-regarded brands are British: yet a major feature of British business is the sad fact that while ideas continue to bubble up, and patents are registered, there is a dearth of funding to develop products fast enough. Firms are sold in their infancy, usually to foreign owners who then reap the rewards for developing the product and its marketplace. To concentrate exclusively on implementing patents is to miss the point.
New patents can improve existing brands, or can be the basis for a new creation of brand value. The establishment of a new brand partly depends on marketing, partly on spontaneous shifts in fashion, partly on consumers' incomes increasing enough to embrace the new consumer experience in addition to the existing standard of living. Investment must be made, often over a series of years, in the development of brand reputation as well as in the technicalities of material manufacture. Investment in systems patents and copyrights, brand-names and trademarks, is needed: these aspects can be more costly than the technical patents that are embodied in a material patent. The total suite of investments is needed to build a brand; otherwise patent-owners who are discouraged from developing their firms and their brands by lack of investments will still be tempted to cash-in their assets and sell the firm and its intellectual property to be developed in foreign hands. The British government needs to move a lot further to meet the need!
Under the coalition the grasping hand of the Treasury has been allowed to influence the deign of the concept for protecting British intellectual property, and consequently the government announced their intention to create a 'patent box' . Under this category a company [or possibly a high-net-worth individual] would be able to secure a patent, and to implement it into production, and get tax exemptions and reductions at various stages in the process. The 2010 Coalition government declared that they would implement the plan and a few companies, including Glaxo, entered discussion with the government about using the process. Glaxo planned to extend their UK factories under a Box agreement specifically to exploit a new product for which it was in process of securing a patent. The company announced its decision to invest in the UK on Budget Day 2012 [as featured in the previous Post here], to accommodate the squalid spin doctoring of sad politicians who would seek any propaganda point in the absence of evidence of real economic progress. In this case, there was real potential in the investment. But [as already noted] the Patent Box is not the only inducement to locate industrial plant in the UK. British labour is becoming relatively cheaper as Chinese workers begin to enjoy consumerism with larger wages, and the tax system in the UK is becoming a little less oppressive. UK and EU Labour law and the omnipresent intrusion of inept and officious 'health and safety' regulations are still deterrents to investment, especially in physical production. But steps are being taken in the right direction, albeit they are hesitant and indecisive.
The bigger issue that is disclosed by the Glaxo announcement is that safeguarding intellectual property is becoming the most important consideration of companies in the global economy: and while the US government has become obsessive about China's 'theft' of such property the EU and European governments have still not grasped the heart of this issue. The leading British ministry, BIS, has focussed on reducing the period between the filing of a patent application and the manufacture of the product; which is a good thing if it can be achieved while maintaining the secret.
But the entire positive story is yet to be told: that Brits, including Glaxo research teams, are unusually fecund in producing both patentable inventions and marketable concepts. The world's leading advertising agents are British, and several of the world's best-known and highest-regarded brands are British: yet a major feature of British business is the sad fact that while ideas continue to bubble up, and patents are registered, there is a dearth of funding to develop products fast enough. Firms are sold in their infancy, usually to foreign owners who then reap the rewards for developing the product and its marketplace. To concentrate exclusively on implementing patents is to miss the point.
New patents can improve existing brands, or can be the basis for a new creation of brand value. The establishment of a new brand partly depends on marketing, partly on spontaneous shifts in fashion, partly on consumers' incomes increasing enough to embrace the new consumer experience in addition to the existing standard of living. Investment must be made, often over a series of years, in the development of brand reputation as well as in the technicalities of material manufacture. Investment in systems patents and copyrights, brand-names and trademarks, is needed: these aspects can be more costly than the technical patents that are embodied in a material patent. The total suite of investments is needed to build a brand; otherwise patent-owners who are discouraged from developing their firms and their brands by lack of investments will still be tempted to cash-in their assets and sell the firm and its intellectual property to be developed in foreign hands. The British government needs to move a lot further to meet the need!
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