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> I always give side eye to the accounting that considers lost sales opportunities to be losses. That's a perfectly valid but also somewhat trivial point. Some

> I always give side eye to the accounting that considers lost sales opportunities to be losses. That's a perfectly valid but also somewhat trivial point. Some number has to be assigned as human nature requires it. Maybe the best representation of the situation is to present it as a question. When fabs cost $xx billion and take almost a decade to reach fruition from R&D to the point where they start shipping a viable product, if you were able to shave two to four years off that process, what does that number look like to you?

shadowgovt 5y ago
It looks like saving a billion dollars in redundant work, which is a net societal gain. Now consumers have two companies to choose chips from instead of one functional monopoly due to a trade secret moat... Win for consumers. ;) ... Hence my unease with the way the question is phrased. I'm not saying we should either mandate corporate espionage or enforce some kind of punishments for not publicizing designs, but my point is it doesn't take a lot of reframing of the question to completely change the numbers, and that makes the numbers suspect for being anything real. It's akin to the sleight of mind that allowed us to put the burden of fraud on consumers with the concept of "identity theft," instead of asking why it should be the responsibility of the person who's information was used that some third party used that information to trick a company into giving away resources. What if the mindset were instead "it's not Alice in Topeka's responsibility that Visa allowed Bob Hacker to scam Walmart out of a bunch of free stuff by pretending to be Alice, and Alice should be required to do exactly nothing to fix Walmart and Visa's problem?" What if instead of having to contract credit monitoring agencies to look out for identity theft, the government held credit reporting agencies responsible with statutory damages for defamation when they incorrectly declare a person has done something they have not? A slight reframing of the problem completely changes the proposed solutions and the value calculus of what was gained and what was lost.
- newnamenewface 5y ago
  > Now consumers have two companies to choose chips from instead of one functional monopoly due to a trade secret moat... Win for consumers. If we were considering this purely from the lens of consumer choice, allowing IP theft seems like a no-brainer. But it's pretty clear from the last few years how important supply chains are to the countries they reside in (and how their absence is strongly felt). To phrase it another way, suppose IP theft makes an industry outright unprofitable in a country and those jobs disappear in that country. It can take decades to spin that stuff up again and the consequences can be disastrous. From that perspective, it's understandable why governments would want to tamp down on IP theft. That said, the story described in the OP is tragic and reflects a perverse situation where someone who came to America seeking those things we promise to the world was considered guilty for chasing the American dream.
  - quantgenius 5y ago
    It's not a gain even purely from the lens of consumer choice unless there is only one iteration of chip improvements ever. Why? Because if this is permitted, there will be no company A to do the research to create the next generation of chips and innovation basically halts.
- hiptobecubic 5y ago
  How are those even remotely similar? On one hand you have a company that has invested billions of dollars to develop a technology on the assumption that it will give them an advantage that will allow them to recoup their losses. Then someone steals it and they can't recoup because it's no longer an advantage. Yes, in this one instance it's a benefit to consumers, but it's clearly not a benefit to the people who worked hard to develop the technology or the investors that took on the risk of trying. It feels like your next argument will be that patents shouldn't be enforceable because it's better for society that everyone have access to everything.
- RHSeeger 5y ago
  > It looks like saving a billion dollars in redundant work, which is a net societal gain. Now consumers have two companies to choose chips from instead of one functional monopoly due to a trade secret moat... Win for consumers. ;) But looking at it from the company point of view. - Company A spends 5 billion $ researching a new fab, from which better chips can be made. - Company A expects to sell those chips as <cost> + <margin> + <an amount extra to pay off the 5 billion that was spent> - Company B steals the plans for the fab - Company B sells the chips for <cost> + <margin> At this point, it is impossible for Company A to recoup the money they spent researching the technology, because people will buy from Company B if it costs less from them. That's a pretty huge loss.
  - kragen 5y ago
    For Company A it's a loss, for Company B it's a gain, and for the world it's a gain, because now there are more of those better chips than there would have been. The problem is that if Company A expects this to happen, they may not spend the US$5 billion in the first place, which is an even bigger loss for the world.
    - echelon 5y ago
      Nortel comes to mind. Think about all the highly paid engineers that lost their jobs. An entire domestic sector wiped out.
      - kragen 5y ago
        Nortel was sunk by mismanagement before the espionage episode, not by the espionage itself. Quite possibly a lot of Nortel's technology would have been lost in the confusion of bankruptcy if the spies hadn't saved it.
        echelon 5y ago
        Do you have any info or reading on this? I tried to Google "nortel mismanagement", but it's unclear any of the sources put it in light of the espionage.

shadowgovt 5y ago

It looks like saving a billion dollars in redundant work, which is a net societal gain. Now consumers have two companies to choose chips from instead of one functional monopoly due to a trade secret moat... Win for consumers. ;) ... Hence my unease with the way the question is phrased. I'm not saying we should either mandate corporate espionage or enforce some kind of punishments for not publicizing designs, but my point is it doesn't take a lot of reframing of the question to completely change the numbers, and that makes the numbers suspect for being anything real. It's akin to the sleight of mind that allowed us to put the burden of fraud on consumers with the concept of "identity theft," instead of asking why it should be the responsibility of the person who's information was used that some third party used that information to trick a company into giving away resources. What if the mindset were instead "it's not Alice in Topeka's responsibility that Visa allowed Bob Hacker to scam Walmart out of a bunch of free stuff by pretending to be Alice, and Alice should be required to do exactly nothing to fix Walmart and Visa's problem?" What if instead of having to contract credit monitoring agencies to look out for identity theft, the government held credit reporting agencies responsible with statutory damages for defamation when they incorrectly declare a person has done something they have not? A slight reframing of the problem completely changes the proposed solutions and the value calculus of what was gained and what was lost.

newnamenewface 5y ago
> Now consumers have two companies to choose chips from instead of one functional monopoly due to a trade secret moat... Win for consumers. If we were considering this purely from the lens of consumer choice, allowing IP theft seems like a no-brainer. But it's pretty clear from the last few years how important supply chains are to the countries they reside in (and how their absence is strongly felt). To phrase it another way, suppose IP theft makes an industry outright unprofitable in a country and those jobs disappear in that country. It can take decades to spin that stuff up again and the consequences can be disastrous. From that perspective, it's understandable why governments would want to tamp down on IP theft. That said, the story described in the OP is tragic and reflects a perverse situation where someone who came to America seeking those things we promise to the world was considered guilty for chasing the American dream.
- quantgenius 5y ago
  It's not a gain even purely from the lens of consumer choice unless there is only one iteration of chip improvements ever. Why? Because if this is permitted, there will be no company A to do the research to create the next generation of chips and innovation basically halts.
hiptobecubic 5y ago
How are those even remotely similar? On one hand you have a company that has invested billions of dollars to develop a technology on the assumption that it will give them an advantage that will allow them to recoup their losses. Then someone steals it and they can't recoup because it's no longer an advantage. Yes, in this one instance it's a benefit to consumers, but it's clearly not a benefit to the people who worked hard to develop the technology or the investors that took on the risk of trying. It feels like your next argument will be that patents shouldn't be enforceable because it's better for society that everyone have access to everything.
RHSeeger 5y ago
> It looks like saving a billion dollars in redundant work, which is a net societal gain. Now consumers have two companies to choose chips from instead of one functional monopoly due to a trade secret moat... Win for consumers. ;) But looking at it from the company point of view. - Company A spends 5 billion $ researching a new fab, from which better chips can be made. - Company A expects to sell those chips as <cost> + <margin> + <an amount extra to pay off the 5 billion that was spent> - Company B steals the plans for the fab - Company B sells the chips for <cost> + <margin> At this point, it is impossible for Company A to recoup the money they spent researching the technology, because people will buy from Company B if it costs less from them. That's a pretty huge loss.
- kragen 5y ago
  For Company A it's a loss, for Company B it's a gain, and for the world it's a gain, because now there are more of those better chips than there would have been. The problem is that if Company A expects this to happen, they may not spend the US$5 billion in the first place, which is an even bigger loss for the world.
  - echelon 5y ago
    Nortel comes to mind. Think about all the highly paid engineers that lost their jobs. An entire domestic sector wiped out.
    - kragen 5y ago
      Nortel was sunk by mismanagement before the espionage episode, not by the espionage itself. Quite possibly a lot of Nortel's technology would have been lost in the confusion of bankruptcy if the spies hadn't saved it.
      - echelon 5y ago
        Do you have any info or reading on this? I tried to Google "nortel mismanagement", but it's unclear any of the sources put it in light of the espionage.