Open vs. Gang Ki by Bunnie Huang (bb #28)


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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.

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Open vs. Gang Ki by Bunnie Huang (bb #28)

  1. 1. gong kaiOpen vs. 公开 bunnie blinkBL_NK Singapore, April 2013
  2. 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. 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. 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. 5. “Open” is not “Public Domain” Remember: Open is borne of IP law that defaults to a closed system.<one line to give the programs 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 modifyit under the terms of the GNU General Public License as published bythe 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 ofMERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See theGNU 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 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. 6. Open is Legally Intense
  7. 7. Open Software Everywhere
  8. 8. Open Hardware...where?
  9. 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 dont 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 dont 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? Thats 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. 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. 11. Docs for both are Accessible...
  12. 12. The Fruits of 公开
  13. 13. 公开 doesnt “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. 14. Different Systems: 公开 vs. Open 公开 isnt “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. 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. 16. Does 公开 Destroy Innovation?  Childs 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. 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. 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. 19. Thanks!