Singapore is a threat to the national security of the US

Prime Minister Lee Hsien Loong should go on TV and broadcast to his countrymen that Singapore has "arrived". The mighty US is scared of little Singapore. Perhaps a national holiday in Singapore will be declared to mark the event !

I am referring to the US government blocking the bid by Broadcom for the takeover of Qualcomm, on the grounds of national security. Broadcom is a Singaporean company (never mind that Broadcom had offered to move its headquarters to San Jose if the deal went through). Qualcomm is an American company. So Singapore is a threat to the national security of the US. Great !

The US government is giving a specious argument to justify national security. According to the government, Broadcom would cut R&D spending after it took Qualcomm over.  This would affect the development of 5G technology. Instead Huawei would become the leader in 5G. Huawei is a Chinese company. Therefore the US would be dependent on China for its mobile networks. That is the threat to national security.

That is an even more laughable argument. Qualcomm is an important player, but not the leader in the development of 5G in the first place. Have you forgotten Cisco ? Intel ? AT&T ? Samsung ? Ericsson ? And innovation is not the monopoly of anybody - even a rudimentary understanding of business should tell you that. Innovation comes from the strangest of places. If Qualcomm slashes R&D, does anybody seriously think other US companies will not succeed in 5G. If the US was solely dependant on Qualcomm, it was screwed long ago.

And why is 5G technology a matter for national security ? If this is truly the case with wireless technology, China's national security has long been compromised  because of US leadership thus far. Why is ownership of 5G technology and standards so  worrying ? Is the argument that Huawei will get a monopoly of technology and therefore all US companies will have to buy telecommunication equipment only from them and therefore China will have a backdoor entry and control over the entire US telecommunications infrastructure ? That stretches incredulity to the limit.

There's an interesting subplot to this. In the midst of the drama with Broadcom, Qualcomm  itself  is currently trying to take over NXP - another semiconductor company. That deal is awaiting clearance from Chinese regulators. Fat chance of that happening now. The people really screwed by these developments are Qualcomm shareholders - they don't get NXP and they don't get to be bought out by Broadcom at a stiff premium. And before you say you don't care about shareholders, let's just note for the record that US institutional investors , including mutual funds and pension funds, hold nearly 80% of Qualcomm stock.

No, this is not about national security at all. These days it appears you can claim national security for anything - even steel and aluminium tariffs. This is pure and simple economic nationalism. We don't want an American company to be taken over by "Chinese looking people". That's it.

The current US administration is supposed to be a Republican one.  Standing for free trade and non interference of government into business. Has ideology, beliefs and policy ceased to matter at all ?

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In defence of TPP - Environment and Intellectual property

In this post I'll tackle the  issues raised against the TPP in the areas of environment and intellectual property.

The opposition to the TPP from environmental activists comes from two contradictory positions - one is that any promotion of trade and economic activity leads to degradation of the environment and therefore must be stopped. The second argument is that the TPP does not go far enough to make environmental and climate change issues at the heart of any trade deal.

The first argument is not worth debating, for it is a loony left idea that deserves contempt. Denying the opportunity of economic advancement to the world's poor should be treated as a crime; for that is what it is. It would be far better if these activists were to specify how growth can happen with minimum effects on the environment (for eg what energy sources could be acceptable) and what the trade offs and choices should be. This they do not do and simply oppose everything. Such a position is not worth a shouting match.

The second argument is worth serious consideration. The US over many bilateral trade agreements has been pushing the following principles

* A binding agreement that countries would not lower their environmental standards in order to attract investment

* That their obligations under other multilateral climate control agreements would override any provisions of the Free Trade Agreement

* A long list of prohibited activities - like logging, deforestation, trade in wildlife, etc

In the TPP negotiations, the US is actually on the defensive as internally the Republicans will block any deal that contains significant provisions on climate change. Countries like New Zealand and Australia which are far more advanced on climate change issues are pushing for tighter provisions. These will have to be negotiated through, but given that the US is such an important player, it is unlikely that they would be able to do much progress. The activists are right to push for greater environmental standards. But the TPP is the wrong place to fight this. They should force the US, which single handedly screwed up the Kyoto Protocol, to come with an alternative.

I approach the second issue of intellectual property rights with some trepidation as that would mean arguing with Medicines Sans Frontiers (MSF) , a saintly organisation, which I am neither competent nor entitled to do. The issue is primarily of patent protection to pharmaceuticals. The US would like patent protection similar to what it has inside its own country. This would mean high prices for drugs for a long time in other countries and inhibition of development of far cheaper generic drugs. As this would disproportionately hurt the poor, MSF has been objecting to patent advancement through Free Trade Agreements. It is a difficult and thorny issue on which there are no easy answers . I am ducking this issue as this is not a big issue with the opposition to the TPP in the US, which is the prime theme of this series of posts. To its credit, the US negotiating team is trying to promote the principle  of "active window" - a period of time which would be longer for developed countries and shorter for developing countries when patent protection would exist and after that the country would be free to promote generics. That might be the best compromise.

This is probably an easy post - neither of these issues are ones on which US politicians should  kill the TPP. Despite the lunacy of a not insubstantial number of US politicians, this is unlikely to happen.

Tomorrow I will conclude this series with examining the secrecy surrounding the negotiations which is common cause made both by my good friend and Elizabeth Warren !!

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I hereby patent everything in this world that has not yet been patented

Conventional thinking is that without patents,we would not have innovation. Mankind would stagnate in the Dark Ages. Really ?? 

This port is triggered by the drama between Apple and Samsung . In the tech industry, everybody is suing everybody else over patent infringement. Hundreds of patents are granted over what goes inside one mobile phone. Is this all necessary ? These days, that business seems to be driven by lawyers rather than technology - M&A activity in this industry seem to be driven mostly by patents.The patent industry has exploded so much that this blogger even blogged about the ridiculous patents that have been granted.

The central premise that innovation will be stopped if there are no patents is nonsense. Right through human history, innovation has flourished with no help from the patent office, thank you.  Patents are a recent human invention - perhaps in the 15th century. Innovation has not exactly been stifled throughout human history.  You may say, ancient history is not relevant. But take even the 20th century - the discovery of the cure for malaria, the satellites that make today's communication possible, the green revolution , the internet, and even the cellphone itself arrived with no help from patents. NASA, which has helped an incredible amount of innovation in the last 50 years, does not patent stuff.

Human nature is to innovate - thank God. No amount of pressure can stifle that. The central problem with patents is that they create monopolies. Monopolies, by definition, stifle competition and are against the consumer.  Huge ethical issues arise when drugs are patented and the poor are excluded from the benefits of life saving drugs.

I am not saying that we should afford no protection to the inventor and simply allow free boarders to copy and ride on somebody else's work.  But the current situation has gone too far. My prescription is a drastic reduction in what can be patented, significantly lower patent periods and public funding of research to compete with private industry.

This would be absolutely heresy to the business world, and if I were important enough, I would simply be branded a communist. I know of at least one reader of this blog who is going to call me and express shock that I have morphed into Kim Jong Il. But I know business They will simply adapt to a different regime. Innovation will not slow down one bit. It might actually become  more cost effective.

There is zero chance that any of this will happen. But just on the off chance , I hereby patent this idea and in case anybody wants to adopt it, they can only do so after paying me $4,567,984.32 .

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Ni Hao Great Britain

A crying shame, it is. This blog is not meant to be political in nature and is (usually) not prone to hyperbolic hand wringing. This post does both, unashamedly. I just could not believe that the Digital Economy Bill was “passed”, or rather rushed through the British House of Commons. Actually what took place was the ‘Third reading”, which is not the same thing as passing. But we won’t get into quaint British parliamentary traditions where worthies have to yell “Hear Hear” when they actually are meaning &^%$ @#$. They effectively passed that bill. See the photo in this article to see how vigorously attended this debate was.

I am not a British national; I do not live in the UK and have no business commenting on British policy or laws. But I am a self confessed Anglophile. I hold great fondness for all that is good and great in Her Majesty’s kingdom. That paragon of virtue, fair play and freedom, passes such a thing as the Digital Economy Bill - that is difficult to stomach.

95% of the bill is all good and fine, even though it will never achieve the objective of making the UK an IT power house. You cannot make an IT powerhouse when one third of the population reads The Sun, one third drinks 75 pints a night at the pub and one third’s religion is called Manchester United !!

It’s the 5% that is horrible. It gives the power to the government to block internet sites. Read that again – block internet sites. They can block sites that “is being, or is likely to be used in connection with an activity that infringes copyright”. Read my lips – Blocking any website, whatever be the reason, is just wrong. If you believe a website is violating copyright, go to a court of law ; prosecute the site owners; that’s the correct process. Not blocking their site.

This bill has all sorts of provisions on copyright. They can get ISPs to disconnect people who are supposed to be violating copyright. The bill seems to have been lobbied for hard by the old world news and music dinosaurs. A certain old man with big interests in the UK media comes to mind, but we shall refrain from going in that direction.

These dinosaurs are just flailing around as the internet is destroying their old cosy models on copyright. Remember how the music dinosaurs forced you to buy an expensive CD full of rubbish just to get at the one good song you liked. Remember how the music labels forget that the world is global and restrict stuff to certain countries. Remember that if they sensibly priced it and offered reasonable terms, a la iTunes, people will pay for them. Remember that declining costs and profitability are a factor to be tackled in all industries and there is no God given right to media that they should be exempt from it. Remember that content creators on line do succeed if they have appropriate business models. But then dinosaurs are not adept at adapting, as we all know.

Instead they go and get a law such as the Digital Economy Bill. I would expect such a bill in the country which the title of post alludes to. Not in the land of hope and glory.

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Some sense on patents please

On Monday Judge Robert Sweet struck a blow for common sense in that mind boggling area of Patents in the US. He invalidated several patents on two breast cancer risk genes in the human body issued to a bio tech firm. He had a breathtakingly simple logic – you can’t patent a product of nature !

The principle of protecting innovation through patents has been rather stretched in the US. All sorts of stuff gets patented. Many of these are primarily designed to block, or sue, others. The Patent Office uses the criteria of novel, non obvious and useful in determining whether a submission qualifies for a patent. It should also add non trivial, non absurd and non laughable as criteria !

For your reading pleasure here are some actual patents issued in the US

-Method of stopping a stolen car without a high-speed chase, utilizing a bar code (well ; the barcode is to identify the vehicle; the method of stopping it is to switch off the engine)

- Anti-Eating Mouth Cage (presumably a weight reduction “device”)

- Electrified table cloth (to discourage bugs from crawling on to the table cloth)

- Beerbrella (an umbrella attached to the beer can to keep the sun off your beer)

- Method of exercising a cat (waving a laser pointer and making the cat jump up and down)

- Device for the treatment of hiccups (a glass that delivers a mild electric shock when drinking to make you stop hiccuping)

- Motorized Ice Cream Cone (Instead of licking the cream manually, you stick out your tongue, the cone rotates and you can make designs on the ice cream without having to move your tongue)

- Animal Ear Protection (a device for preventing long eared dogs from getting their ears dirty from their food bowl)

- Device For Moistening The Adhesive Coating On Postage Stamps and Envelopes ( No kidding – the patent says, the applicator may be a human tongue)

- Hands free towel carrying system (A towel with a loop for hanging from the neck)

- Linear putter device of a golf club (well; a golf club)

- Equidae Excrement Receptacle (in plain English, a horse diaper)

- Hijacker Injector (a hypodermic injection apparatus that is installed on the seat and which the cabin crew can remotely activate to inject a hijacker)

- Gas Factory (a devise to strap on a cow’s back which taps the methane emitted by cows and converts into a biomass)

- Airplane moisturizer (a mask you wear which captures the moisture you exhale and gives it back to you when you inhale)

- Hand near mouth alarm (another dieter’s aid)

- Ultimate umbrella (a huge baseball cap mounted on your head)

- Cheese filtered cigarette (apparently hard cheese is a good filter and you can get a cheesy flavour to the smoke)

One of the readers of this blog actually worked for the US Patent office. Would welcome his rebuttal of this piece.

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