Friday, November 17, 2017

How the Neglect of Innovation Nearly Cost Britain the War Against Hitler

One of the many lessons we should remember from Word War II is that England's neglect of innovation nearly cost it the war against Germany. This is a minor but important aspect of a major new book on England's fight to survive in World War II. In Churchill and Orwell: The Fight for Freedom by Pulitzer-prize winning author Thomas E. Ricks (New York: Penguin, 2017), we learn about some of the reasons England struggled to defend itself from Germany. A key weakness discussed by Ricks was England's poor state of preparation with inadequate machinery, feeble industrialization, weak supply chains, etc., that made it hard to fight a serious war and led to embarrassing disasters like the rapid loss of Singapore, their imagined secure fortress in southeast Asia.

Closer to home in Europe, Britain often had a hard time just moving their troops around -- they often had to walk -- and the Brits were amazed at how quickly their American cousins could mobilize when they came to the rescue. Why was England so poorly prepared?

England, of course, was the birthplace of the Industrial Revolution, yet by the time of the War, they were far behind in many of the basic technologies they would need. How could this happen? Ricks provides helpful insight in this passage from pages 203-204:
Managed by family members more interested in reaping dividends than investing in new machinery and other gear, “British firms were unable to adopt modern, best-practice technology,” concluded business historian Alfred D. Chandler Jr. As a consequence, Britain’s brilliant university research generally did not make the transition into factories. Britain had led the first Industrial Revolution of coal and steam power, but generally sat out the “Second Industrial Revolution” of the late nineteenth and early twentieth centuries, built around oil, chemicals, metals, electricity, electronics, and light machinery, such as automobiles. By the end of the 1940s, it would have neither an empire nor an economy capable of competing with those of other major powers. As Correlli Barnett put it, the reality was that by the time World War II ended, the British “had already written the broad scenario for Britain’s postwar descent to the place of fifth in the free world as an industrial power, with manufacturing output only two fifths of West Germany’s.” Interestingly, Barnett was the keeper of the Churchill Archives at Cambridge University from 1977 to 1995.
Something similar happened in China, which once led the world in innovation and GDP, but from the Qing Dynasty until the late 20th Century, in part due to apathetic leaders unwilling to invest in or even open the doors to innovation and technology, China missed out on much of the Industrial Revolution. Only through massive reform and exerted effort in recent decades has China begun its return to a position of global leadership in innovation, IP creation, and economic growth.

In the paper industry, which I've been close to for many years, it's clear that the American paper industry has largely fallen into the same trap that nearly cost Britain its freedom and did cost many lives unnecessarily. The American paper industry has largely failed to invest in new technology and relies heavily on antiquated paper machines and pulp mills that are decades behind what we have in Asia (China and Japan in particular). Their slower, less efficient machines and less efficient plantations put them at a distinct cost disadvantage. Instead of taking steps to compete better, the US industry too often tries to rely on protective legislation to raise tariffs on imported paper and make everyone in the nation pay much more for their paper than they should. The real problem is not Chinese competition, but American businessmen falling into the same pattern that nearly cost Britain the war: focusing on immediate profit and dividends while neglecting the future.

Each industry, whatever it is, needs to build for the future with investment in innovation and a willingness to boldly cope with the threats and opportunities of disruptive innovation. If your industry is dominated with leaders who feel like they can just milk their business as a cache cow with no need to invest in the future, that industry will fail.

Friday, January 6, 2017

WIPO’s New Patent Translation Tool Beats Google Translate (At Least for Chinese/English)

One of the many challenges in IP work is translation of foreign documents, especially patents. Translating between Chinese and English is especially difficult for machine translation, where strange or even nonsense results are common due to the complexity of Chinese and the difficult legal and technical phrasing that is common in patents. Google Translate is quite poor in this context, and the outstanding translation tools at also generally don’t work well for patents.

Fortnately, WIPO (the World Intellectual Property Organization) has recently released a powerful tool specially for patent translation, WIPO Translate. The results have been stunningly good in my testing so far, vastly outperforming prior systems.

WIPO Translate can handle a variety of language pairs both ways, all involving English and either Chinese, French, Korean, Portuguese, Russian, and Spanish. Only about one paragraph at a time can be translated, so you can’t yet dump an entire patent all at once into WIPO translate. I hope that limitation will be lifted in the future.

In using the WIPO Translate tool, you can select a technical field to help focus the translation and improve the chances of the appropriate terminology being used.

Wednesday, October 7, 2015

Recognizing a Major Chinese Innovator: China's Answer to Gutenberg

For those interested in the contributions of China to innovation throughout history, a significant event will take place in a quiet little Midwest town this month that may interest you. On October 15, 2015, the  Paper Industry International Hall of Fame in Appleton, Wisconsin will induct six people into its Hall of Fame. This unusual industrial hall of fame has around 120 or so honorees at the moment, mostly North American and European business leaders and scientists. This year, though, one of the new inductees is an innovator and leader from ancient China who can be considered as China’s answer to Gutenberg.

Gutenberg is frequently honored as one of the most important inventors ever for giving us the world’s first book printed with movable type. The printing of Gutenberg's Bible was a remarkable achievement from around 1455. As with many inventions long thought to have had European origins, there’s a touch of Eastern flavor in this one, for Gutenberg’s work came 142 years after the world’s first actual mass-produced printed book made with movable type, a Chinese book you probably haven't heard of. It's the large Book of Farming (or the Nong Shu) from China, printed in 1313 by Wang Zhen, as Wikipedia explains.

Wang Zhen was an official in central China in a difficult economic era in which famine was a serious risk. He recognized that vast amounts of agricultural technology scattered across the nation needed to be preserved to help all of China reduce famine and be more agriculturally productive. To achieve his quest of broadly spreading and archiving information, he took a Chinese invention, movable type, and improved it to create a practical way of organizing and selecting individual characters to print an entire book.

He used carved wooden blocks for each character, and developed a sophisticated way of arranging them on two rotating tables to allow typesetters to quickly find needed characters to place them in his press. The Nong Shu was printed and preserved many notable inventions in China, including an early form of a practical blast furnace for making molten iron driven with a reciprocating piston attached to water works, something long that to be a later European invention.

Recognizing Wang Zhen in the Paper Industry International Hall of Fame ( for his important role in the advance of printing and, indirectly, the growth of the paper industry, is a significant step.  I look forward to many more Asian inventors, scientists, and business leaders being recognized in the Hall of Fame in future years. The historical contributions of China in numerous fields have received far too little attention, and I’m delighted to see folks in Appleton taking the lead in rectifying this problem. Kudos to the Paper Industry International Hall of Fame!

Monday, March 16, 2015

Rep. Dana Rohrabacher Warns Against the Loss of IP Rights with Misguided Patent Reform

Many IP experts are growing concerned about the weakening of the IP system in the United States. Some are so concerned that they are wondering what steps can be taken to save it from the steady erosion of IP rights that has been occurring, often in the name of solving the "fake" problem of so-called "patent trolls."

One man who wants to prevent further harm to our IP system is Rep. Dana Rohrabacher (R) from California’s 48th District, who is a member of the House Science and Technology Committee. He recently wrote an op-ed article for the Washington Times called "Patent ‘reform’ is killing the right to invent: How a congressional misstep could imperil creativity" (March 1, 2015). I agree with much of what he says.

He warns that Congress's zeal to stop "patent trolls" will actually result in them simply doing the bidding of powerful companies who are annoyed by little guys able to defend themselves with patents. In effect, Congress is being manipulated into apparently "reforming" the US patent system but in reality they will be weakening it for small inventors and making it more friendly to the big empires that see patents as unpleasant sources of cost and annoyance. Here is some of what Rohrabacher has to say:
With the best intentions, and naively going along with the corporate world’s hugely financed publicity machine, Congress is about to stomp on America’s most creative citizens, its inventors.
The target is not the much-hyped “patent trolls.” They are a minuscule matter. What’s at stake is average Americans’ constitutional right to own what they’ve created. We’re really up against corporate lawyers acting like ogres, devouring the little guy’s innovative accomplishments.
Many of my colleagues, without understanding the legislation’s impact, will soon vote on “HR 9,” a misnamed “patent reform,” also dubbed “pro-innovation,” that is anything but. In reality, it deforms our patent system beyond recognition.
This legislation — pushed by my Republican colleague, House Judiciary Committee Chairman Bob Goodlatte, and deep-pocketed multinational corporations — appears on its way, again through the House, to the Senate, thence to an eager President Obama for signing.
When that happens, America’s exceptional system of invention will be shoveled into the depths of mediocrity, there to seep into the murk in which less scrupulous global competitors spend their resources.
In the last session, a bipartisan band of my Republican friends (some of whom made their pre-political marks as patent-holding inventors); members of the Black Caucus; and a heroic Ohio congresswoman, Democrat Marcy Kaptur, failed to dissuade our House colleagues that the bill was not the litigation-curbing effort as advertised.
The bill went to the Senate where, fortunately, it stalled. It’s back, this time resurfacing in the House with just one hearing. A whole class of small inventors, among the many who will be injured, is being kissed off as scarcely deserving a voice. All in a day’s work for the corporate influencers who shaped HR 9 from start to finish.
Just because a measure holds itself up as “tort reform” should not mean it escapes the scrutiny of free-market Republicans. It should instead call for a skeptical second look, and then more throughout its progress. Guaranteed: Such close-eyed analyses of this bill will encourage deep suspicion.
Fair-minded members will find themselves aghast at how this leaves defenseless our individual inventors, small and midsized companies, researchers, even universities who depend financially on their patent portfolios. It is a coup in the making by the biggest and best protected operators....
Legislative reform efforts invariably build on a narrative of great injustice. This one moves wildly beyond the need to fix real abuses, wherein at considerable cost companies must defend their legitimately acquired patents against unscrupulous claimants.
But the term “patent troll,” directed against such bad actors, has been transmogrified by corporate marketers to include legitimate small inventors — many of them minorities, which is why my Black Caucus friends sized up the issue astutely — who are outgunned and outspent when they try to protect their intellectual property.
Almost all infringement cases are brought by people who own a patent legitimately. If not, such cases should be decided in court. There is nothing wrong with bringing such matters to court — a cornerstone, not of crony capitalism, but of the free market itself.
Our economy and culture depend on the disruptive nature of innovation. Our Constitution deliberately made all people equal, giving no advantage to those of social status, wealth or position. The founders, even before they added the Bill of Rights, secured the right to hold patents in the Article I of the Constitution itself, the only right mentioned prior to the amendments.
We all know our country’s history of innovation. Large companies reject new ideas. It is the innovator who challenges the status quo, not the corporation.
Under the proposed bill, the pretrial discovery process — just one part of many dubious sections — tilts heavily against the small inventor, who of course must share his or her secrets with an opposing corporation’s well-armed legal team. In another era, I might have considered this an innocent, unintended consequence of ill-considered drafting. Not now.
I implore my colleagues in both the House and Senate to stop this monster aborning.

Sunday, March 15, 2015

Open Innovation and Intellectual Property Trends in China

China is undergoing a revolution in the realm of IP and innovation. In just 3 decades, China has gone from no IP law to leading the world in patents filed and litigation to enforce patents. The level of innovation in China may well be the next big surprise for many in the West.
“Open innovation” is often used to describe collaboration with outside partners to accelerate innovation. Dialog about open innovation frequently assumes that it is recent and Western, but successful open innovation is not unique to the West. Innovation via cooperation between unlikely partners has been a characteristic of China for centuries. Relevant terms are guanxi (often translated as “relationships”) and yuanfen (fate that brings partners together). In China, guanxi and yuanfen have allowed proximity and chance to bring business partners together when there was a basis of trust, resulting in innovative alliances. The fusion of skillsets in China’s manufacturing economy often stems from collaborative innovation, though the results are often decried as merely the machinery of copying.
Accelerated innovation in China, including advanced systems for responding to market feedback, is the subject of a report from the MIT Sloan Management Review, where Peter Williamson and Eden Yin survey China’s innovation in rapid manufacturing and parallel engineering. A key element is obtaining feedback and innovation concepts from outside partners or customers. The cited example of Mindray Medical International, China’s largest medical equipment maker, shows how R&D fueled by rapid response to outside feedback enables advanced new products to launch four times as fast as foreign competitors. This is not old-school copying, but the impressive fruit of aggressive open innovation.
Many more examples could be cited, such as Lenovo’s rapid acquisition of foreign patents to fuel entry into new areas, or Wuxi Pharma Tech (NYSE: WX) and their collaboration with Germany’s Targos Molecular Pathology to support WuXi's bioanalytical work for pharmaceutical customers.
The global IP community was surprised in 2014 to learn that a Chinese paper company had secured 8 billion RMB in funding (over US$1 billion) backed by its intellectual property. The story was reported in a Chinese paper-industry publication in March 2014, and a few days later we had the privilege of reporting this story to the Western world on the Innovation Fatigue blog, which was in turn quickly picked up by Intellectual Asset Management (IAM) magazine. IAM’s blog noted that this deal is one of the biggest IP-backed loans in history.
The company, Tralin Paper (Quanlin in Chinese, or Tranlin in recent US stories), has a modest portfolio with around 100 Chinese patents, several internationally-filed patents and a few trademarks. Their technical strength is in creating paper with natural characteristics from waste paper and straw. Even if guanxi rather than IP was behind the financing, the fact that IP was used as publicized basis for the deal underscores the increasing importance of IP in China and the diverse ways in which Chinese IP can generate value. For Tralin, even if the IP were window dressing, its role even as a prop at a minimum provided PR value and strengthened Tralin’s position as thought leader in its niche. The most reasonable assumption is that IP also provided direct financial benefits, not just window dressing.
In the US, where Chinese innovation and IP is often deprecated, the impact of this deal is being felt strongly as Tralin/Tranlin is investing $2 billion in Virginia and creating 2,000 jobs with the technology they are bringing to US shores. News stories so far have missed the connection between US jobs and Tranlin’s ability to get capital based on Chinese IP, but we hope that Americans might recognize that innovation and IP from China is at least partly responsible for this welcome job growth.
Tralin/Tranlin’s story is part of a landscape in China where entrepreneurs and creative leaders are discovering the many positive uses of IP, including its ability to secure capital and build partnerships. But many Western companies wishing to build partnerships with their technology fear China and the risk of misappropriated IP. This lack of trust is being addressed gradually as China strengthens its IP laws and IP enforcement systems. Lawsuits, no matter how fair, are a last resort. Successful joint innovation requires trust directly between parties, and both sides need more successful examples for inspiration. Fortunately, a powerful role model of the technical, cultural, and political bridge-building that can occur in a healthy relationship rooted in carefully-maintained trust can be seen in a remarkable experiment in technology transfer and international cooperation: the Utah-Qinghai EcoPartnership, a unique collaborative effort that is using IP from the United States to solve major environmental problems in China.
To read more about the Utah-Qinghai EcoPartnership, with some interesting photos showing the fruits of this unique collaboration based on respect for IP rights and mutual trust, see the article I published with two co-authors (Edgar Gomez, and Alan Smurthwaite) in the Diplomatic Courier, "Open Innovation and IP Trends in China: Insights from the Utah-Qinghai EcoPartnership."

Wednesday, July 30, 2014

The Tralin/Tranlin Paper Story from Shandong, China: An Example of Chinese Intellectual Property Creating Jobs--in the US!

In a previous post, I reported that a huge loan had been given to a Chinese paper company backed by its Chinese IP as collateral. The 8 billion RMB obtained by China's Tralin Paper (Quanlin Paper in Chinese, though they use for their website), one of the biggest IP-backed loans in history, not only shows that Chinese intellectual property is coming of age, but is now being used to bring Chinese technology to the US where it will help create over 2,000 US jobs. Tralin Paper, renaming themselves as Tranlin Paper, has just signed a deal with the State of Virginia, obtaining state support as Tralin/Tranlin/Quanlin invests $2 billion to create a new environmentally friendly paper mill and create over 2,000 US jobs. Recent news  from the office of Governor Terry McAuliffe of Virginia proudly announces the plans of "Tranlin Paper." Also see reports at and

As the West continues to decry Chinese IP and innovation, always viewing China as a source of IP theft and job loss for the US, this story may come as a pleasant surprise. Here is an innovative Chinese company that has created and protected their own IP in a green technology, used innovative financial tools (and plenty of solid Chinese guanxi) to obtain massive financing based on that IP, and then brought their money and their technology to the US to create many jobs. At least some parts of this story are going to be repeated in many ways in days to come. The old paradigm of China lacking IP or lacking valuable IP is fading.

After the announcement at, the first report on this story to the English-speaking world, as far as I know, was my original March 6, 2014 report here at followed by an update here on the Shake Well blog that gave a translation of the Chinese story. It was picked up by Intellectual Asset Magazine and by World Trademark Review, but is still a generally unrecognized but important story.

China still has a long ways to go in overcoming its problems and strengthening innovation and IP, but the trends here are remarkable and should not be discounted. Meanwhile, we should welcome stories like Tranlin's, and watch for many more to come. But for some US companies, this will mean even tougher competition that won't be easily avoided with restrictive, protective tariffs or antidumping legislation.

(Similar account cross-posted on the Shake Well Blog.)

Wednesday, March 26, 2014

Chinese Paper Company Relies on IP to Gain 7.9 Billion RMB Loan

March 6, 2014: I recently learned of important news from the Province of Shandong in northern China. A Chinese paper company, Quanlin Paper (also known as "Tralin Paper") has used its portfolio of patents and trademarks to secure a loan of 7.9 billion RMB (about $1.3 billion). The story was reported on March 3, 2014 on the website for the Chinese magazine, China Paper. This deal may be a record for China in terms of how much value IP brought in seeking financing. To emphasize the significance of this development, the normally dry China Paper publication begins with a somewhat flowery statement based on an interview with the Chairman, who expresses surprise and delight at how much money they were able to obtain with their IP. Here's my loose translation, followed by the actual Chinese:
"I never thought that intellectual property could have such a big effect in obtaining this loan. IP was a big part of it," according to Quanlin Paper Company's Chairman of the Board, President Li Hongfa, speaking today to a reporter about the 7.9 billion yuan from bank lenders that began this week. He said that this money will help them rapidly expand and seize market opportunities. Money has been tight for business, and this new addition is welcomed just as the mist-covered earth rejoices in the spring rains from the night before. 
That may be overly flowery for some tastes, but again, this is big news for China and things get flowery when big news is good. This development shows that IP in China can be valuable (though the portfolio includes some international patents, it is mostly Chinese IP). It also shows that Chinese companies, even in seemingly dull industries like the paper industry, can be innovative and create valuable IP. I haven't reviewed their IP to assess its value, but I understand they have over 100 Chinese patents in areas such as technology for using straw and other renewable or recycled materials for making paper, with alleged benefits of enhanced environmental friendliness and cost effectiveness. Shandong Province's IP Office has also created some publicity about Quanlin's IP estate (see the Chinese article here), though this was before the news of the massive loan secured with the help of IP. Expect more publicity from them shortly.

Further background comes from Baidu's wiki-like entry on Quanlin Paper.

When nations develop strong IP systems, companies can use their IP to protect their innovations. This also motivates them to take the risk and spend the money need to drive further innovation, and gives investors courage to fund growth and innovation. In this case, it helped give a lending partner (a Chinese financial organization) the courage to loan a giant sum of money to help Tralin grow. Tralin has been pursuing IP not just for tax breaks it seems but also for strategic purposes, and information coming out about this story shows that they have been developing expertise in their staff to develop their IP estate. Sure looks like that has paid off for them.

This is one of many signs that China is becoming serious about IP and innovation, and not just low quality IP, but IP that can provide significant value. For IP to apparently be a crucial part of such a large loan in this challenging economic times is a remarkably positive sign for China, in my opinion.
On the other hand, the loan may be due to politics and guanxi with officials, and the IP is just window dressing. That's possible. But to even choose IP as the window dressing for publicity and hype is a remarkable thing in it's own right, and still a sign of China's rapid transformation in valuing and pursuing intellectual property.

Here is my loose translation of the China Paper article:
Quanlin Paper Crafts the Nation's Largest IP-Backed Financing 
On Feb. 21, 2014, Quanlin Paper secured a loan using a pledge of intellectual property. The pledge, recorded with the State Intellectual Property Office (SIPO), includes 110 patents and 34 registered trademarks. The Shandong Province Intellectual Property Office has verified that this is the largest amount ever financed in China using intellectual property. 
"With this funding obtained, we will be able to accelerate our large projects. Market opportunities wait for nobody!” said Chairman Li Hongfa. The primary project Li refers to is a straw-based pulp manufacturing complex for papermaking that will process 1.5 million tons per year of straw. Quanlin company is headquartered in Liaocheng City, Gaotang County (Shandong Province). Quanlin’s core business among their large-scale enterprises is pulp and paper manufacturing using straw to create “natural color” paper. Quanlin turns waste into treasure and promotes a healthy environment, transforming both the impression that people have (of the industry) and their habits of consumption. 
After the enterprise brought this large project forward, it rapidly gained approval from the Environmental Bureau and the National Development and Reform Commission. The project is an important program for the nationwide comprehensive utilization of resources and a model project for China’s recycling economy. It was also considered a provincial key construction project in 2013. Currently, capital construction is fully underway and should be complete by year-end. Once production begins, the expected annual sales revenue will be 8.165 billion RMB, with anticipated sales taxes of 489 million RMB and annual profit of 1.24 billion RMB. 
For intellectual property to receive this high level of approval from the market is without doubt a giant benefit for technological enterprises in general. Although Quanlin company's own development has now benefited from their intellectual property, they continue to invest steadily in their core technology—continuing even during the times when investment is most difficult. This is an area where the company has never gone “short.” The result has made a deep impression on Li Hongfa: in the process of obtaining these loans, the appraised value of Quanlin’s patents reached 6 billion RMB and played a key role in successfully obtaining the financing. This means that patents and other IP rights are not just about obtaining a monopoly in the market, but can be used to creating long-term profit for the enterprise. They can be used as collateral for significant financing to resolve one the biggest headaches for high-tech businesses, the hunger for funds to grow, to capture hidden potential, grasp favorable market opportunities, and to let the company “grow up.” 
This financing will stir the interest of banks other technology enterprises. Not only did the China Development Bank and their affiliates issue Quanlin a loan of 7.9 billion RMB, but the Bank of Communications also signed a strategic cooperation document with the Provincial Science and Technology Department, and launched a specialized intellectual property financing product. Jiang Lurong, General Manager of the Retail Credit Department of Shandong Branch Bank, said that while intellectual property seems invisible, it reflects value creation and the ability to continue operations without increasing banking risk, and can help obtain more high-quality customers, improve the system for customers of the bank such as companies like Quanlin.
Kudos, by the way, to Dr. Ian Feng of Goldeast Paper in Zhenjiang, China for alerting me to the story in China Paper.

Note: IAM Magazine issued a blog post on the use of IP in lending in China: "Chinese companies have secured over $10 billion in patent-backed loans since 2008" by Jeff Wild, March 4, 2014. The news I share below (cross-posted at definitely supports their article. Great timing! Further, responding to the news that I first broke to English speakers on the Innovation Fatigue Blog, IAM Magazine has written a blog post about this story (kindly citing my announcement), wherein they observe just how big of a deal this is. I agree, though I also think it's fair to wonder how much of the transaction actually depended on IP and how much was due to guanxi and other factors. I have not yet evaluated the IP and if I do look at it in more detail, do not plan on sharing my analysis publicly, but may still offer further updates on this story here. IAM's post includes a translation of the Chinese article behind this story. My independent translation above was prepared before I saw the IAM translation. If there are significant differences in meaning, I'll defer to them since my Chinese is still rough.

Cross-posted on the Shake Well Blog.