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>>(3) The ideal business sells a product which cannot be easily substituted or copied. This means that the product is an original or at least it's something tha
by toss1 3y ago
>>(3) The ideal business sells a product which cannot be easily substituted or copied. This means that the product is an original or at least it's something that can be copyrighted or patented.
The principle is excellent, but the concept of protecting your product with patents is entirely invalid since about 2001 when China was admitted into the WTO. I have personal knowledge of several, and I can't count the number of times I've read about businesses ruined or seriously damaged by China pumping out knockoffs, sometimes literally faster than the original product gets to market.
The concepts of quality and respecting intellectual property are literally foreign concepts to the Chinese.
It is quite simple: if your idea can be easily copied, the Chinese will do it very quickly. Your "valuable" set of patents is merely a ticket to a series of lawsuits, which China will ignore, and the business, even if you get a judgement years in the future, will simply dissolve and re-organize.
So, any idea that is protected by IP laws but merely injection-molded in plastic is, in a very real sense equivalent to public domain (regardless of your patent status). If you have a more complex (e.g., machined or chemically complex) product, do NOT have it manufactured in China, as you'll soon find copies sold out the back door and competitors setup selling your design even if you can stop the leaks.
To have the moat described in #3, you need some 'secret sauce', and you need to keep it secret.
- htss2013 3y agoEven if you can't sue Chinese manufacturers violating patents, very few products are bought directly from China then shipped to the USA. There are USA middlemen and retailers involved. Why couldn't a patent holder go after the USA middlemen in court?
- toss1 3y agoSure, you can probably go after them for the US part of your market. But: First, it is very hard to get an early preliminary injunction to halt sales, so they keep selling against you the whole time. Second, the costs of pursuing a federal lawsuit are huge (typically six-figures+), it takes years to get to a judgement, and the result may be a pyrrhic victory where you are awarded damages and a cease-&-desist on a company that simply goes bankrupt and reorganizes under some other corp. entity. Sure, if they got into a major US retailer instead of you, you might get something, but then you are still going up against not only the competitor's attnys but also the major retailers, so probably add a zero to the left of the decimal in your legal costs. IOW, they still stole your IP, undermined your market, made money off of it, and suffered minimal penalties for doing so. We should also notice that SpaceX explicitly stated that they are going the trade secret route vs patents, and said that patents would simply be treated by the Chinese like an instruction manual, and they could never stop them or recover anything.