Intellectual property (IP) is often the lifeblood of a company. Unique IPs can help manufacturers attract customers, reduce costs, and increase productivity by improving products or processes.
The competitive advantages of having a unique IP is part of the reason why manufacturers in different industries spend so much time and money on research and development. According to statistics from the National Association of Manufacturers (NAM), “manufacturers in the United States perform more than three-quarters of all private-sector research and development (R&D) in the nation” and that R&D spending in the manufacturing sector was “$229.9 billion in 2014.”
So, when intellectual property is stolen and used by a competitor who hasn’t spent any time or money on developing it, the damage can be severe. Instead of being the only source for a particular solution, there’s a cheaper knock-off from a competitor who doesn’t have to recoup R&D expenses.
IP and trade theft was the theme of the discussion between BBC Radio 4 and Marlin Steel CEO Drew Greenblatt in their August 2017 broadcast.
Why Talk to Marlin Steel?
In the past, Marlin Steel has fought against IP theft at the hands of foreign competitors. As Drew noted in his interview:
“If you Google images of baskets, there’s many Chinese companies that have my baskets that they’ve cut and pasted from my website, and posted on their own website, and it’s deflating. Because, we have 20 percent of our employees are degreed mechanical engineers—crazy-smart people—very expensive. We’re investing big bucks to empower them to do tremendous research and development and then you see our ideas posted on Chinese websites or foreign companies’ websites where they’re literally pilfering our technology and our ideas and what makes us unique.”
These thieves have benefitted from the investments that Marlin has made into product research and development without paying the costs.
How IP Theft Can Impact Consumers
When IP thieves manufacture knock-off baskets for clients, the clients don’t know that they’re getting a cheap knock-off that might not fit the right specifications for their needs. After all, the IP thieves are simply copying a static image most of the time, instead of creating an entire design file that has the proper measurements and material data required for top-quality baskets.
These baskets could fail unexpectedly, or simply not meet the end user’s parts tolerances—causing damage to their products. As Drew states in his interview with BBC Radio:
“These products, mind you, in many cases, they’re made in a very shoddy fashion—forget about not to our high standards of quality—and do harm to the consumers that are unaware that they’re getting a product that was stolen or a product that was made in a format that was unacceptable to good craftsmanship.”
What Can Be Done to Prevent IP Theft by Foreign Competitors?
Unfortunately, it’s very hard to stop companies in other countries from stealing intellectual property from American manufacturers. They operate in a different legal jurisdiction and, if their home country doesn’t decide to prosecute, then there’s little chance of stopping them.
What businesses can do is embargo companies that have been caught stealing the intellectual property of American companies. By preventing the import of goods made with stolen IP, it is possible to protect American manufacturers from unfair competition and stop thieves from making profits off of the hard work and diligence of others.
Marlin’s CEO calls on politicians and President Trump to take things a step further in his BBC Radio interview, stating that:
“Ultimately, the best thing he [Trump] could do is not allow these Chinese thieves to ship into America. And, I’m hoping that our allies—like England, like Canada, like Mexico—will join us shoulder-to-shoulder because English inventors and Canadian inventors, etc. also need these kinds of protections. Ultimately, we should be shoulder-to-shoulder on stopping this. You know, English inventors, American inventors, Canadian inventors should not allow their governments to allow the importation of these products.”
Blocking imports from thieves could help protect the livelihoods of countless American, Canadian, Mexican, and English jobs that rely on the intellectual properties held by employers.
The host of the BBC Radio broadcast highlighted concerns about sparking an “all-out trade war” with China over the embargo of some Chinese companies. To this, Drew replied:
“Well, just for the thieves. I’m not talking about shutting down trade with honorable Chinese traders—you know, honorable Chinese entities that are adhering to the intellectual property rights. They could continue shipping to America. They’re doing nothing that’s unfair/unreasonable. They’re capitalists. American manufacturers are very enthusiastic to trade vigorously with the world. We just don’t want to trade with people that are stealing from us.”
IP theft is a serious issue faced by almost every manufacturer in the U.S.—whether they realize their intellectual property is being stolen or not. The unfair competition created by IP thieves harms manufacturers, their employees, and the American economy.
Manufacturers lose out on revenue they would otherwise have—keeping them from making the profits they need to hire more employees or provide raises. This, in turn, harms American manufacturing workers—reducing their chances of earning the money needed to maintain a high quality of life. Finally, because workers have less disposable income and manufacturers aren’t ordering the raw resources they need to make products, the American economy is indirectly harmed, affecting other businesses and their profits.
This is why everyone needs to fight IP theft by foreign competitors—not just manufacturers, but also every American. It’s in all our best interests to protect our innovators and their intellectual property rights so they can keep contributing to the common welfare of the American people.