Update on Tralin Paper (a.k.a. Tranlin Paper or Quanlin Paper): Financing Based on Chinese IP Now Creates Jobs in America

I previously reported a remarkable IP-backed financial deal in China, where Tralin Paper (Quanlin Paper in Chinese, though they use www.tralin.com for their website) used their IP portfolio to back a loan for 8 billion RMB, around US$1.3 billion. Now news  from the office of Governor Terry McAuliffe of Virginia reveals what Tralin is doing with that money. See reports at TAPPI.org and MFRTech.com. Tralin Paper, renaming themselves as Tranlin Paper for some reason, 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. In a departure from the stereotypical view of Chinese companies stealing American jobs and IP, here is an innovative Chinese company that has created and protected their own IP, 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 ChinaPaper.net, the first report on this story to the English-speaking world, as far as I know, was my original March 6, 2014 report at InnovationFatigue.com 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.

Watch for China to surprise many pundits who decry its lack of IP and innovation. Many Western companies are going to be startled at the tsunami of innovation and IP that will come from the Middle Kingdom, which is rushing to become the epicenter of global innovation and IP value creation. 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.

By |July 8th, 2014|Categories: Business, China, Industry, Innovation, Paper, Patent law|Tags: , , , |Comments Off

History in the Making: The US-China IP Adjudication Conference, May 28-30, 2012, Beijing

After 3 years of planning and navigating complex political waters, a historic event finally took place in Beijing last week at China’s top university for IP law, Renmin University. Top justices, judges, lawyers, business leaders and academicians from the US and China gathered for 3 intensive days of sharing regarding intellectual property and the courts. There were over 1,000 people that attended, including numerous judges and IP thought leaders from China and the US. The number of judges from China was said to be 300, though most of the Chinese people I met were not judges but lawyers, business leaders, and students, though I did have lunch with a Chinese judge and met several in other settings during the conference.

The leaders and speakers of the conference included US Court of Appeals for the Federal Circuit (CAFC) Chief Justice Randall Rader, one of the most brilliant and influential minds in US patent law whose decisions have long been shaping US law and practice. He is a strong advocate of international collaboration and appears to have been one of the primary driving forces between this event. I was pleased to see a total of 7 Federal Circuit judges present, most visiting China for their fist time, including these 6 Circuit Judges: Raymond C. Clevenger III, Richard Linn, Timothy B. Dyk, Sharon Prost, Kimberly A. Moore, and Jimmie V. Reyna. Also playing prominent roles were Gary Locke, US Ambassador to China; David Kappos, Director of the US Patent and Trademark Office; Mark Cohen, the USPTO’s former Attaché to the US Embassy in Beijing; Steven C. Lambert, President, Federal Circuit Bar Association; and many others. Mark Cohen wowed the crowd by delivering his speech in fluent Mandarin, though his rather erudite citations of Chinese poetry and classics sometimes challenged the gifted translators who made this bilingual conference accessible to everyone present.

On the Chinese side, we were elated to have active participation by Chief Judge Kong Xiangjun, IPR Tribunal of the Supreme People’s Court. Also from the IPR Tribunal of the Supreme People’s Court were Deputy Chief Judge Jin Kesheng, Supervisory Attaché Zhang Shengzu, Presiding Judge Yu Xiaobai, Presiding Judge Wang Yongchang, Presiding Judge Xia Junli, and Judge Zhu Li. These judges, with the 7 from the US Federal Circuit, were part of an “en banc” panel discussing US and China law and IP adjudication. Fascinating! Also representing China was Chong Quan, Deputy Deputy China International Trade Representative and a leader of MOFCOM (China Ministry of Commerce).

In addition to many keynote speeches and panel discussions, there were also breakout sessions on such topics such as trademark law, patent litigation, pharmaceutical patent adjudication, and copyright law. Definitely one of the most interesting and information-packed IP conferences I’ve ever attended.

For many, the highlight may have been the afternoon of mock trials in which the same case was presented in an appeal to the US Federal Circuit and to the IPR Tribunal of the People’s Supreme Court of China. Judge Rader lead the 3-judge panel for the US mock trial. The mock trials allowed representatives of both nations to quickly grasp important differences in procedure, though both courts came to essentially the same conclusion in a genuinely interesting real case involving an advance in safety equipment for a circular saw. Following the trials, there was further exchange between the judges of both countries as they discussed their different systems and what they had learned from one another. What a tremendous learning experience and example of meaningful international cooperation.

The rapidity of China’s progress in IP law and adjudication has been breathtaking, in spite of the many complaints made by voices in the West, and the obvious need for further improvements. But from a historical perspective, to go from virtually no IP law in the early 1980s to a world-class system that is leading the world in patent filing now, with the ability of foreign plaintiffs to win against Chinese companies in Chinese courts, represents massive progress worthy of respect. Exchanges like this recent one in Beijing will influence the thought leaders of both nations to further learn from each other and strengthen our approaches to IP law. Many thanks to all those who made this monumental event possible.

In the closing session, I was able to ask a question to the panelists about what future impact they anticipated might come from this exchange. Chief Judge Kong kindly fielded that question and spoke eloquently of the growth of IP law in China and the rich opportunity they had to draw from the US experience and strengthen their system. There is no doubt in my mind that China is rapidly learning and growing and a visionary eye toward the future. I hope the US can keep up and remain a worthy partner and competitor!

Below are some photos of the event that I took.

Related resources: David Kappos’ blog, “China as an IP Stakeholder.”
 

Liu Yang, Exec. VP of the China Law Society, introduces speakers in the first session.  Also visible are Mark Cohen (USPTO), Chong Quan (MOFCOM), David Kappos (USPTO), and Shen De Yong (VP of the Supreme People's Court).

Liu Yang, Exec. VP of the China Law Society, introduces speakers in the first session. Also visible are Mark Cohen (USPTO), Chong Quan (MOFCOM), David Kappos (USPTO), and Shen De Yong (VP of the Supreme People's Court).

First panel.

First session. Left to right: David Kappos (USPTO), Shen Deyong (VP Supreme People's Court), Chief Judge Randall Rader (US CAFC), Chen Jiping (Executive VP, China Law Society), US Ambassador Gary Locke, and Chen Yulu (President, Renmin University).

Judge Rader

Chief Judge Randall Rader is one of the rock stars of IP--literally. I asked him if he was going to perform for us in the evening but sadly, he informed me that he had left his band behind in the US for this event. I took the opportunity to compliment Judge Rader on setting a great example by being visibly active in areas other than his profession alone. His pursuit of rock music with a real band, even while in the judiciary, is one of many attributes that makes Judge Rader one of the more interesting and likable people in IP law. His passion for China is also part of the Rader equation. Many thanks for making this historic event happen!

Jeff Lindsay in front of the Ming De complex at Renmin University where the Adjudication Conference was held.

David Kappos, head of the US Patent and Trademark Office, speaks. His support for this event was crucial and much appreciated.

Gary Locke, US Ambassador to China.

Gary Locke, US Ambassador to China.

Richard Rainey, Executive Counsel, IP Litigation, General Electric.

Richard Rainey, Executive Counsel, IP Litigation, General Electric.

By |June 3rd, 2012|Categories: China, Innovation, Patent law, Politics, Products, Relationships, Society||Comments Off

Voting Tools for Innovation: Crowdsourcing and the Innovation Cloud

I recommend David Greenfield’s Information Week article, “How Companies Are Using IT To Spot Innovative Ideas ,” highlights a new trend in corporate innovation management: IT tools for online voting for ideas submitted. These tools include voting alone as well as predictive markets – faux markets used to evaluate ideas and make predictions. Excerpt:

In a three-week experiment, GE Research turned its 85 employees into day traders, letting them watch market movements on their screens to decide whether to buy or sell any of 62 stocks. Only the stocks were product ideas in which the company had the option to develop. At stake was $50,000 in research funding that GE would allocate to the highest-valued project.

When the markets closed, GE ended up with a prioritized list of ideas that the collective wisdom of the market thought would best help the company. Topping the list was an algorithm in the area of machine intelligence, an idea pitched directly by a researcher, not through the normal hierarchy of lab managers and senior management.

Dell looked to an even broader market for new product ideas, using Salesforce.com’s online voting service called Ideas and launching Dell IdeaStorm, where anyone can submit and vote on new features and options for Dell products. Perhaps best known of these ideas is a Linux-based laptop Dell introduced in May 2007. Starbucks uses the same voting platform, at MyStarbucksIdea.com, and took an online suggestion posted Oct. 7 by BillMac to offer a free cup of coffee Nov. 4 to anyone in the United States who voted.

The use of these collective decision-making technologies, both sophisticated prediction markets and simple voting tools, is spreading, and they’re increasingly being paired together as a component of corporate innovation programs, helping companies sort through reams of ideas–from new products to customer service to productivity improvements–to find that handful of blockbusters.

A key in any system relying on mass participation is motivating the right people to participate. The software system itself must be user-friendly and offer value, such as providing easy access to ideas that may stimulate one’s own thinking, or useful metric about that other groups in the corporation are doing. If outsiders are involved, there must be filters of some kind to pre-select those whose opinions are likely to matter. The ability to pass a CAPTCHA test is not necessarily correlated with having valuable insights.

Will “Innovation Clouds” become the way of the future? Can crowdsourcing help identify the next iPod? Or is it more likely to give us Edsels?

The data from collaborative innovation tools and voting applications can be considered in identifying key innovations, but don’t overlook the contributions of your visionary product developers and R&D personnel, especially your multidisciplinary master’s of innovation who can serve as “DaVincis in the Boardroom.”

As James Surowiecki indicated in his famous Wisdom of the Crowds, crowd-based decisions work best when the work is done with a decentralized, diverse, independent population. Will it work for corporate idea management? Not easy! People can readily fall into line and comply with corporate culture and the opinion of local influencers. We’ll stay tuned and watch how these concepts play out.

By |January 12th, 2009|Categories: Innovation, Products||Comments Off