Shanzhai Rules

Over at the LinkedIn Post-Industrial Design group, there’s a little discussion started by Matt Sinclair on a report called The Future of Open Fabrication from the Institute For the Future. The report calls out the Shanzhai approach to manufacturing in China–below the radar, but not necessarily illegal–working outside the conventions of statutory intellectual property but maintaining its own forms of such things. It’s an interesting read, especially the “Shanzhai Rules“:

Here are the rules the shanzhai live by:

  1. Do nothing from scratch; build on the best of what others have already done.
  2. Innovate process ceaselessly at small scales for speed and cost savings.
  3. Share as much as you can to make it easy for others to see your value and to add value to your process.
  4. Sell it before you make it.
  5. Act responsibly within the supply chain to preserve your reputation.

The report quotes a blogger, who writes that the Shanzhai are “doing to hardware what the web did for rip/mix/burn or mashup compilations … They are not copies of any single idea but they mix IP from multiple sources to create a new heterogeneous composition, such that the original source material is still distinctly recognizable in the final product.”

The report itself does not point out that in additive manufacturing, it is precisely the IP positions that are acting as barriers to innovation in countries like the US. It’s one thing to protect one’s market share. It’s another thing when that protection activity stunts the activity of the market itself–the practices, the ideas, the creativity, the demonstration of new things.

To give an example, when Z Corp goes off and writes threatening letters to the University of Washington, where student teams built a sub $500 do-it-yourself inkjet powderbed printers based on expired patents–technology in the public domain–, then it becomes clear that patents–or rather certain kinds of patent positions–can act as barriers to the development of a market, not merely to protect market share. Why even bother to teach inkjet powder-bed 3d printer engineering, if one company can dominate the country and bully students away from learning how to do it? That’s the collateral damage from MIT’s exclusive field of use license to Z Corp, I guess. MIT makes money, Z Corp excludes universities from teaching how to make powder-bed printers, and people find ways to work around university technology rather than building on it, and avoid Z Corp technology for anything really interesting.

I think Z Corp’s claims are nonsense, since patents long expired for powder-bed based printers showed excess material being pushed off into cavities, and Z-Corp’s own patent is a divisional (of a continuation of a continuation of a provisional of a continuation in part… etc. ) from a patent in which the claim was for pushing excess material into a cavity at the bottom of which was a vacuum system. But Z Corp continues to get continuations issued that then reclaim powder-bed ink jet printers in general, with minor variations. The patents are real.  The cost of dealing with Z Corp is real. The adverse effect on innovation is real.  The adverse effect on research and education is real.  This is the way, apparently, Z Corp wants it.

For instance, take a look at Z Corp’s latest patent, 8017055. It claims the same old inkjet powder-bed 3d printer, but now with a way to deliver build material using a “metering system” comprising  “a cylinder having a plurality of grooves inside a closely fitting tube having an entrance slot and an exit slot.”  Of course, in typical fashion, when they build the parallel method claim, they leave off the slots: “a cylinder having a plurality of grooves inside a closely fitting tube”, getting for themselves a more general claim than they could with the apparatus claim.

Just for fun, here is the dependency statement for this patent: “This application is a Divisional of U.S. application Ser. No. 12/192,412, filed on Aug. 15, 2008, which is a Continuation of U.S. application Ser. No. 11/335,282, filed on Jan. 19, 2006, now U.S. Pat. No. 7,435,368, which is a Continuation of U.S. application Ser. No. 10/260,224, filed on Sep. 27, 2002, now U.S. Pat. No. 7,037,382, which claims the benefit of U.S. Provisional Application No. 60/325,310, filed Sep. 27, 2001, and which is a Continuation-in-Part of U.S. application Ser. No. 09/851,502, filed May 8, 2001, now U.S. Pat. No. 6,989,145, which is a Continuation-in-Part of U.S. application Ser. No. 09/416,787, filed Oct. 13, 1999, now U.S. Pat. No. 6,375,874, which is a Continuation-in-Part of U.S. application Ser. No. 08/771,009, filed Dec. 20, 1996, now U.S. Pat. No 6,007,318. The entire teachings of the above applications are incorporated herein by reference in their entirety.”

Here’s the base claim of the 6007318 (which still has 5 years on it) patent introducing a bin for excess powder:

1. An apparatus for fabricating a three-dimensional object from a representation of the object stored in memory, the apparatus comprising:

a feed reservoir having stored therein a supply of build material for forming the object;  a build table for receiving incremental layers of the build material from the feed reservoir; an overflow cavity for receiving an excess quantity of build material transferred from the feed reservoir but not received by the build table;

and  a vacuum pump coupled to the overflow cavity to create an air flow from the overflow cavity.

For the patent to be infringed, all the elements of the claim must be infringed. The middle section above is just the MIT patented inkjet powderbed printer. The only things that get this patent issued, apparently, are the “representation of the object in memory”–which any computer controlled 3d printer or CNC mill has had to do for long before inkjet 3d printing–and the connection of the overflow cavity with a vacuum system to manage the powder dust.

But by the time Z Corp files their first CIP, now 6375874, they conveniently leave off the vacuum pump in their method claim:

20. A method for fabricating a three-dimensional object from a representation of the object stored in memory, comprising:   providing a feed reservoir;  storing a supply of build material for forming the object in the feed reservoir;  on a build table, receiving incremental layers of the build material from the feed reservoir; and at an overflow cavity, receiving an excess quantity of build material transferred from the feed reservoir but not received by the build table.

Pretty cool–get a method claim broader than the teaching of the base patent, by leaving off the restrictive details of the base patent application and thus re-patenting the basic inkjet powder-bed printer, even though the feature list that they add was in public use and taught in patents well before Z Corp filed any of their continuation patents. That is, the bothersome detail of cavity + vacuum pump becomes, merely, cavity–meaning, a dust bin to catch excess powder. It is beyond me how that would not be obvious to one with “ordinary skill in the art.”

Essentially what Z Corp has done is patent the base MIT 3d printer with the added claim from the public domain that excess powder could be swept into a bin rather than onto the floor, or another table on which the feed table sits. It’s not that this seems obvious. It is obvious. Except that they got it by the patent examiner. You can see how the strategy works–claim the original invention plus an extension from the public domain or from current practice and you get, essentially, a new patent on the same invention. It wouldn’t hold up if they had just filed a patent on a new use for a dust bin–to hold the sweepings from a new-fangled 3d printer that operated just like other 3d printers (and other powder forming processes) but with new-fangledness added.

For reference, here is first claim of the base MIT patent 5204055 (issued April 20, 1993–expired +17 years = April 2010):

What is claimed is:

1. A process for making a component comprising the steps of  (1) depositing a layer of a powder material in a confined region; (2) applying a further material to one or more selected regions of said layer of powder material which will cause said layer of powder material to become bonded at said one or more selected regions;  (3) repeating steps (1) and (2) a selected number of times to produce a selected number of successive layers, said further material causing said successive layers to become bonded to each other; (4) removing unbonded powder material which is not at said one or more selected regions to provide the component.

Yeah, I know, they didn’t bother to mention that there could be excess powder not in the “confined region” (so it must be inventive to sweep it off the build table into a bin, but not, apparently, if onto the floor). MIT followed a similar course of divisionals and continuations, resulting in 5340656 [issued 8/1994–expired] (making a “component” using the method of the first patent) and 5807437 [issued 9/1998] (a system for producing “components” using an inkjet print head described as a bunch of parts for an inkjet printhead, just in case someone makes a print head just like an inkjet printhead but isn’t one), and 6146567 [issued 11/2000] ( a variation in which the inkjet binder droplets are “variably deflected” for “fast-scanning” by the printhead). Once you have an invention, then it is easy to file a cluster of patents all claiming minor variations, as if one had got all these little ideas for things at the same time as the big idea. Even when the big idea is in the public domain, after 20 years (or 17 years from issue, per past practice), the little variations properly claimed can prevent anyone from actually using the big idea without running afoul of the additional claims.

In a company setting, like Z Corp, the purpose of the little claims is to make sure that the competition doesn’t weasel in and make copies. That protects one’s market position, even as it potentially degrades the quality of that market.  We can debate how valuable such positions are to innovation. But in a university setting, there is no purpose whatsoever served by the piddly variation filings. The university doesn’t have a market position on the matter. The variation filings are only there 1) to preserve an anti-competitive monopoly on practice or 2) to maintain a money position with a monopolist by extending the term of the licensing agreement under which royalties are paid. If the patents aren’t licensed at all, or are licensed but not worked, then the actual purpose is 3) to create a barrier to entry in the US and anywhere a patent is in force, not only to commercial development, but to practice and research. There’s no good purpose beyond the money. It’s not about innovation any more.  It’s not about preserving an open environment in which folks can work, under a general public license or at least a reasonable and non-discriminatory one. It’s about focusing on the bully position rather than the competitive one.

One can follow the “corporate practice” and file on everything, imagining the day when a company will show up, ready to be that paying monopolist that university officials dream of (in their ideal economy, every business would be a happily paying monopolist–it is what they mean by “innovation capacity” and what they would like to buy with “funding gap funds”). One can rationalize this any number of ways–that paying monopolists require monopoly positions before they will invest, and without investment, there can be no commercial products, and without commercial products, there can be no practice, and certainly we cannot allow anyone to practice without paying for something. But it’s all a crock. There is a truth in corporate practice, but it is not the truth of filing on everything and looking for money. Much of the open innovation approach is to try to bring some sense of reason and trade back to the innovation business–even for companies. Using patents to create a respect for innovation is very different from using patents to trip people up so they have to pay. This is a social problem, not a legal one.

Given that a lot of the MIT work is federally funded, we can see that MIT practice surmises that federal research innovation policy reads thus: “for inventions made with federal support, the primary objective (i) is to extend as long as possible the rationale under which a licensee must pay royalties to the university, and to that end, to create as comprehensive as possible a patent thicket both in terms of scope of claims, variations on the theme, and with the longest possible term; and for all inventions not licensed or licensed but not worked, to prevent anyone from practicing these inventions unless they first enter into the agreement contemplated under (i).

Perhaps with this level of detail one can see how a basic approach to using the patent system to promote practical application has been skipped in favor of using the patent system to prevent practice except on the condition of maximizing licensing income in exchange for monopolistic, anti-practice, anti-research, anti-innovation-by-others strategies.

The Future of Fabrication report thinks that the slowness in developing new materials for 3d printing is the result of the “messiness” of physical stuff:

The slow pace of materials innovation is the result of the messiness of stuff. Open fabbing is often compared to open source software , but the feedstocks for open source software were 1s and 0s; the feedstocks for fabbing could potentially number in the hundreds of thousands of different substances with a vast range of physical properties and potentially toxic chemicals.

In ink-jet powder-bed printing, however, this is not the case. The problem is that one manufacturer has established dominant–even if illegitimate–positions covering all sorts of material systems, reclaiming the basic elements of the printer apparatus and methods without adding anything substantive, for a period that now extends past the expiration of the original MIT patents on which the company is built. There is no way, in the US at least, to innovate in material systems for inkjet powder-bed printers without running afoul of Z Corp sending out nasty grams.   It’s not that their patents will stand up, but that they use the cost of dealing with the patent system, with claim interpretation, with dealing with the uncertainties created by their behaviors as their competitive advantage to drive out innovators, force practitioners to use their printers, their material systems–at costs that are easily 30x higher than the real current market for printers, materials, and servicing.

All this is mere details, which is where a lot of the suppression of US innovation lies. It is not the patent system that has run amok, but the people using it. Like any moral system, it survives because the people who participate in it regulate themselves. When they don’t–then you get massacres and invasions and patents that aim to strangle the developments of markets in the name of self-interest. If you have people with enough money to spend on patent work rather than on new design work, then it appears you can keep a monopoly going for way longer than the term of a patent on a fundamental invention.

Yes, there are lots of combinations of materials, and yes, materials can be messy, but so are 1s and 0s. The Shanzhai have a huge advantage. It is not that they don’t respect IP laws–which may indeed be the case. The advantage, however, is that they don’t have deal with the owners of IP that also do not respect the *purpose* for which IP laws exist, which in the US anyway is to promote progress, not to allow monopoly positions to suppress progress.

If we look then at the Shanzhai Rules, we get a sense of a natural history of innovation that works in networked, quasi-market ways. People share what is strategic to share, to gain access to strategies, to coordinate supply and distribution chains, to respond to customer needs, to take advantage of new insights. It may be that one can introduce patents into such an environment. It may be, however, that a patent would be used sparingly, to show something new, not some incremental improvement that will be shared anyway, or can be discovered by others with a modicum of ingenuity. It may be, as well, that patents would be deployed with general permissions and be used to mark value added rather than to prevent anyone from competing (or sharing).

In the US, we can’t avoid patents, and we can’t avoid folks who want to use patents to suppress innovation. Not everyone is a free rider, and not all imitation is bad for the first movers, and many imitators give back to the first movers–by creating and demonstrating markets, by showing improvements that can be adopted by all, by exploring niche markets that the first mover will never reach, by teaching practice and making standards that improve interoperability. In the new fabrication, however, we will have to create new ways to handle IP–not the old monopolizing small bits forever exploits that Z Corp has down to a fine science, not the sincere but ineffective hold everything on the narrow theory that a patent has to be used to create a commercial product by attracting private investment willing to pay a lot for the rights that university technology licensing offices have got down to a rather crumbly science. Not this stuff. Not the conventional wisdom on the use of patents.

Rather, we need some unconventional wisdom, some below the radar and the experts to get at things and get them done. If every practitioner who combines two or three (or fifteen or twenty) materials and finds that things prints in a powder-bed printer files a patent application, then the patents will largely mark what can’t be used, rather than what can be used–unless we develop a set of Shanzhai rules (meaning, common practices) for the research and practice communities–that allows for a lot of rapid building on the work of others, integration of practice rather than fragmentation by rights, public and RAND licensing that creates platforms and standards, and isolates the social (and therefore business and progress) use of patents to those situations where there really is an investment requirement before anyone can practice at all.

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