Based on the attacments answer the following questions:

How can IP be acquired from other countries?

What kind of losses do firms and governments suffer in developed countries due to thefts of IP?

American firms and security chiefs want tight control of the global flow of ideas. Good luck supremacy. History is not encouraging. At any point in time an elite group of firms in a particular country are on the frontier of innovation. Businesses and governments in poorer places try to catch up, because that is the best way to get rich. According to the IMF, the absorption of foreign IP explains 40% of the growth in la- bour productivity in emerging economies between 2004 and 2014. The incentives for such countries are so powerful that hoarding ideas away from them is like clutching a wet bar of soap. Thus in the Anglo-French wars of the 1700s France recruited British defectors to unlock the secrets of coal technologies. In the subsequent century America stole British designs for looms and trains. Japan mimicked the West during the Meiji Restoration. South Korea, Taiwan and Singapore industrialised by buying and stealing Western ideas on everything from ships to chips. Cries of foul play from the global hegemon are to be expected. In the case of Britain, it passed an act against economic espionage in 1719. In the 1980s Caspar Weinberger, America's defence secretary, fretted about the haemorrhagic of high-tech ideas to the Soviet Union, which had a wishlist for its spies called the Red Book. Despite this, the Soviets did less for computers than Steve Wozniak in the Jobs family's garage. To take off, after all, foreign O NE of the quirks of LinkedIn, a career-oriented networking ideas need to be absorbed and commercialised by firms and en- site with over 562m users, is that strangers wish you a happy trepreneurs. One channel is contractual relationships, such as for- birthday even when your mum has forgotten. If this happens to eigndirect investment or licensing. Another is persistent theft. you, don't respond: it could be a Chinese spy. According to Reu- But often there is a grey area that includes reverse engineering ters, American counter-intelligence chiefs think that China is run- products, tips from suppliers and headhunting experts from ri- ning a "super-aggressive" campaign on LinkedIn to recruit ex- vals. Globalisation and the web have deepened all these chan- perts in health care, green energy and technology. Other agencies nels. Companies' IP is more scattered owing to global production are nervous, too. The FBI complains of an "unparalleled" level of chains. A global jobs market exists for technical experts and ar- economic espionage. The National Security Agency says Ameri- mies of students learn abroad. ca is being "pummelled". How might America control the flow of ideas? During the cold "The spooks' warnings are part of a wave of anger in the West - war it ran a Western embargo of the Soviet Union for military about ideas leaking across borders. On June ist the European Un- goods and some high-tech ones, through a secretive body known ion complained to the World Trade Organisation (WTO) that Chi- as COCOM. Today it would need an even more intrusive and co- na prevents European firms from getting a fair price for their intel- ercive approach to assert its IP rights unilaterally. Establishing an lectual property (IP). A 215-page White House report on China's extraterritorial deterrent would require crippling punishments trading practices published in March was filled with accusations for firms that violated IP, such as banning them from using the of IP violations, including outright theft and the forced transfer of dollar-based banking system. A Big Brother regime would be IP to joint-venture partners in China. On August ist Congress ap- needed at home. There are 67,000 AI experts working in America proved a law that gives the government sweeping powers to po- who are ethnic Chinese, according to an analysis of LinkedIn by lice cross-border deals involving "critical technologies". Bernstein, a research firm. Theynologies". Bernstein, a research firm. They can hardly all be suspects. r American firms the stakes are high. They derive 80% of their market value from intangible assets such as patents and Brain freeze brands, as opposed to physical ones. They own half of the Even then, China and other countries might balk at paying a big- world's IP. At the biggest 50 multinationals, 65% of foreign profits ger tribute to America's IP supremacy. If USA Inc charged the come from IP-intensive businesses such as tech and drugs. The world $60obn more, and this hit was absorbed by all foreign latest star firms rely on selling intangibles across borders. Netflix companies, it would cut total profits outside America by about a has 73m users outside of Uncle Sam. NVIDIA, which designs arti- tenth. The return on equity of American multinationals abroad ficial-intelligence (AI) chips, makes 87% of its sales abroad. (excluding financial firms) would soar from 8% to 14%. Europe and Yet in the eyes of many American bosses and security types emerging countries are already uneasy about the large and lightly the global Ip regime is broken. The Economic Espionage Act of taxed rents that American firms extract abroad, from the drugs in- 1996 is intended to police IP theft by governments and firms but dustry to the big tech companies. has led to few prosecutions; WTo rules on safeguarding IP America's economy is shifting further towards intangibles. abroad have little bite. What is required now, many believe, is The administration and bosses are right that China has misbe- tough, unilateral action by America to enforce its rights abroad. haved. But ideas are harder to police than gearboxes and coils of Companies want stronger control of IP, allowing them to maxi- steel. The solution is a global regime that permits the flow of mise their profits. The IP Commission, a lobbying group in Wash- ideas, prohibits theft, offers a framework for pricing IP and sees ington, reckons that they are being robbed of up to $60on a year. that rules are enforced. A next-generation global trade treaty, in Politicians and the security establishment have a grander aim: other words. Sadly, this is exactly the multilateral approach to regulating the flow of ideas to preserve American technological trade that America has rejected. Not one of its best ideas