A naturally occurring oxide, TiO2 is generally extracted from ilmenite ore and was first used as a pigment in the 19th century. In the 1940s chemists at DuPont refined the process until they hit on what’s widely considered a superior form of “titanium white,” which has been used in cosmetics and plastics and to whiten the chalked lines on tennis courts. DuPont has built its titanium dioxide into a $2.6 billion business, which it spun off as part of chemicals company Chemours, in Wilmington, Del., last fall. ... A handful of other companies produce TiO2, including Kronos Worldwide in Dallas and Tronox of Stamford, Conn. Chemours and these others will churn out more than 5 million tons of TiO2 powder in 2016. China also produces large amounts of the pigment, and its industries consume about a quarter of the world’s supply. Most of China’s TiO2 plants, however, use a less efficient and more hazardous process than the one developed at DuPont. Starting in the 1990s, if not earlier, China’s government and Chinese state-run businesses began seeking ways to adopt DuPont’s methods. Only they didn’t approach the company to make a formal deal. According to U.S. law enforcement officials, they set out to rip off DuPont. ... Most trade-secret theft goes unreported. Companies worry that disclosing such incidents will hurt their stock prices, harm relationships with customers, or prompt federal agents to put them under a microscope. Theft of trade secrets also rarely results in criminal charges because the cases are time-consuming and complicated, and it’s often difficult to win a conviction for conspiracy to commit espionage. A 2013 study estimated that China accounted for as much as 80 percent of the $300 billion in losses sustained by U.S. companies from the theft of intellectual property. Often, China won’t even release the records or serve the subpoenas that might contribute to a prosecution. To win in court, companies must prove they properly safeguarded their trade secrets, something many fail to do.
Katzenberg admits his greatest motivator is, well, winning. An avid gambler, he got kicked out of summer camp at age 15 for playing cards (that was for M&M’s; these days he plays poker for much higher stakes). But DreamWorks wasn’t always a straight flush. The original production company never lived up to the expectations generated by its high-wattage founders: Katzenberg, Spielberg, and music and film mogul David Geffen. DreamWorks Animation, which became independent in 2004, had more success—but never attained the scale to secure its future in an increasingly conglomerate-heavy Hollywood. ... Still, under Katzenberg’s direction, the animation studio, based in Glendale, Calif., was prolific, sometimes profitable—and most important, prescient. In 22 years, including as a division of DreamWorks SKG, it produced 32 films, garnering more than $13.5 billion in worldwide box-office revenue. ... He was early to recognize that companies other than Disney could turn animated franchises into enduring revenue sources, early to see the importance of streaming-media distribution, and early to spot China’s potential to reshape the industry. ... Developing cartoon movies for kids, done right, can pay off big: If you create lovable and “sticky” characters, you can relatively easily monetize that initial IP investment across multiple movies, TV spinoffs, and lines of merchandise. ... The process is slow and costly. Films take three to four years to complete, progressing from ideation to storyboarding to using computer-generated imagery to animate minute details like the movement of hair and the texture of powdery snow. At DreamWorks Animation, a typical movie cost upwards of $140 million—not including marketing.
Lego is an idea as much as it is a toy; if you try hard enough, you can fit the entire story of the last century of child’s play and the hopes and desires of every parent into one of its 9.6-millimeter-tall rectangular plastic bricks. Molded in a thermoplastic polymer, acrylonitrile butadiene styrene, Legos are known for their durability, which is why you can pull out the 30-year-old Legos stashed in your parents’ basement and, dated color schemes aside, they’ll be the same as they ever were. Not only will they look the same, but they will fit together with every other one Lego has ever made, even those going back to 1949, when a Danish toy-maker named Ole Kirk Kristiansen made his first plastic brick. Lego calls it the System of Play, and it is both a manufacturing principle, allowing the company to reuse the same molds to make infinite new sets, and a play proposition: The more bricks you own, the more you can build. ... Like all 6,500 Lego elements — cubes, rectangles, octagons, wheel beds, arches, even the tiny semi-circular hands of yellow mini-figures — the standard brick has a variation of just 0.004 millimeters, which means Legos are more precisely crafted than your coffeemaker, your television, even your iPhone. ... By 2003, the company was on the brink of financial collapse, just three years after Fortune had named it “Toy of the Century.” ... In Lego lore, the crisis provoked a companywide soul search. And where the soul was located was in the brick. Henceforth, the brick would be the center of everything it did, toy trends be damned. ... play researchers argued that toys should foster more open-ended creativity and exploration — toys that forced the child to do the work, like Lego.
Cosmetics companies have been fighting counterfeiters for as long as they’ve been in business, but the scope of their efforts isn’t widely known. The Estée Lauder Cos., the $30 billion company that owns MAC, Clinique, and other brands, has waged an especially aggressive campaign. Since 2003 its global security team has been led by the former head of the U.S. Drug Enforcement Administration’s New York office, and it employs 42 full-time agents around the world. They infiltrate flea markets, make test purchases on EBay, and gather evidence for civil suits against counterfeiters. Increasingly, they’re coordinating with local and national governments. That includes pointing Chinese police to the country’s dingy fake-makeup factories and advising U.S. prosecutors on criminal investigations here ... Global seizures of counterfeit perfume and cosmetics jumped 25 percent from 2011 to 2013, according to a recent report by the Organization for Economic Cooperation and Development, making them a growing sector of the $461 billion annual trade in pirated and counterfeit goods. ... becoming a dealer in the U.S. no longer requires having shady contacts in Asia or smuggling suitcases through airports: Anyone with a few thousand dollars can buy contraband wholesale online and resell items individually on EBay and Amazon.com, or through more traditional channels such as flea markets, beauty salons, and mall kiosks.
Self-driving technology has become a fixation for Kalanick. Developing a driverless car, he’s often said, is “existential” to Uber. If a competitor managed to get there first, it could easily replicate Uber’s core service (shuttling passengers) without its single largest cost (paying drivers). ... According to the legal complaint filed on behalf of Google’s driverless car division—as almost everyone at Waymo still refers to it—the company began investigating Levandowski last summer after learning that Uber had paid about $700 million for his months-old company. Google’s suit, filed in a San Francisco federal court, says its investigators uncovered a trove of digital evidence that hint at an unprecedented theft. According to the suit, Levandowski used his company laptop to download 14,000 design files from Google’s car project. ... At issue is a business that both companies believe will be worth hundreds of billions or even trillions of dollars a year. And though both companies like to portray driverless cars as some near-term inevitability, this dispute shows just how messy the race to get there could prove to be.
The boy whose teen and young-adult years were ripped from him by the murderous Nazi rampage through Europe would show millions of children and adults how to play, how to squeeze more fun out of their lives. ... Orenstein now speaks English with a borscht-thick European accent that’s just one notch above a whisper. He is still alive, still gambling and still winning most of his bets. Glancing out the window of his New York City pied-à-terre, which offers sweeping views of Central Park, he leans forward and rests his elbows on the large poker table in front of him. ... The story of how Henry Orenstein went from a small town in Poland, through five concentration camps, all the way to his 24th-floor apartment on one of Manhattan’s most expensive strips of real estate is the stuff of fiction, and science fiction. He bluffed and cajoled to survive the Holocaust, and just a few years later, armed with unrelenting drive and rare creativity, he tinkered and hustled his way to the top of America’s toy industry, helping to put dolls, race cars and one of the most successful action figures in history into the hands of generations of children. Then he transformed poker from a game played in dimly lit rooms to a billion-dollar business.
Why should we care about a Chinese chemical company buying a Swiss agricultural business, however mammoth the deal might be? For starters, it’s part of a wave of global consolidation in agriculture that will put an increasingly large portion of the world’s commercial seed market—roughly 50%—under the control of a few giant multinationals. In addition to the ChemChina/Syngenta union, Dow Chemical is buying DuPont, and Germany’s Bayer is in the process of swallowing up Monsanto, perhaps the most controversial producer of genetically modified seed species. This combined $170 billion deal binge promises to have a profound impact on the future of global agriculture. ... Beyond that, ChemChina’s purchase of Syngenta provides valuable insight about China’s broader view of its future. The deal signals important trends in the country’s policy on innovation, biotechnology, intellectual property, and globalization.
Talking Tom Cat was an instant hit, launching a franchise whose titles have reached No. 1 in more than 100 countries on the App Store. Today, almost 350 million monthly active users support the apps, and Tom’s YouTube channel has more than 2 billion views. Unlike many mobile app creators, the Logins have proved adept at turning popularity into profit. Playing Talking Tom triggers an onslaught of advertising and in-game purchase offers, and Outfit7 earns more than $100 million a year. In early 2016 the Logins decided to cash out, hiring Goldman Sachs Group Inc. to find the most lucrative deal. ... The industrialists were willing to match the Logins’ asking price of $1 billion and let their team maintain autonomy. Samo and Iza signed away their company—having never taken money from outside investors, their stake was worth about $600 million. ... It’s hard to see the synergies between a maker of chemical solvents and a digital cat perched over a toilet. And curiously, the buyer, which had recently been renamed Zhejiang Jinke Entertainment Culture Co., had revenue of only $133 million in 2016, according to Bloomberg data pulled from regulatory filings, and its gross profit was $55 million. Jinke won’t say where the money to buy Outfit7 came from. ... The deal activity can best be understood as a consequence of quirks in the Chinese stock market. In China, industrial companies trade at valuations they’d never receive elsewhere in the world. ... some may trade at as much as 100 times their annual earnings—more than four times the multiple of General Electric Co. This means they can acquire companies at what is effectively a discount. ... Chinese companies are betting that by adding game studios that have better margins than a stodgy industrial business, their stock price will rise.
The takeaway: Gaming may be mainstream entertainment, but game companies are hit-driven—and none has successfully expanded beyond videogames. ... Activision Blizzard hopes to be the first. It’s not just dragon-centric TV shows that are being spun out of its massive vault of proprietary characters ... There are multiple movies under development, loosely based on the bestselling war-game franchise Call of Duty. There’s a newly launched consumer products division, tasked with developing everything from comic books to apparel based on Activision Blizzard’s intellectual property. ... And most notably, there is an “e-sports” empire in the works—a major foray into the booming world of competitive videogaming. That genre, once merely a niche, is reaching a tipping point. About 385 million people worldwide are expected to view e-sports events in 2017—mostly online, but increasingly on cable television and at live competitions. ... It might be more accurate if ESPN not only distributed football games but also owned the National Football League—and made all the footballs in the world as well.
Over the past 18 months, a five-year-old consortium of furniture manufacturers and design firms called BeOriginal Americas has been training US Customs and Border Patrol (CBP) officers to distinguish real Eames, Starck, and Mies van der Rohe designs from fakes, among others. It’s working: According to CBP’s Intellectual Property Rights Seizure Statistics report (pdf, p.5), in 2016, customs officials confiscated 42 shipments of unauthorized replicas worth an estimated $4.2 million. ... But they’re up against a vast knock-off industry. Labeled with nice-sounding terms like “reproduction,”replica,” or “homage,” many designer chairs in offices, hotel lobbies, airports, restaurants and even big furniture stores are actually unauthorized copies. And while a knock-off Eames or Barcelona chair might seem like a harmless, budget-friendly addition to your living room, these illegal knockoffs threaten the economy and the environment, and erode the very meaning of design.
Counterfeiting is a $400 billion industry in China. Factories churn out real Nike shoes just a handful of subway stops from illicit markets selling fake ones, and counterfeit versions of the latest iPhone are hawked in the Shanghai airport before the real ones reach many rural Americans. There are real car dealerships selling knockoff cars and fake Apple Stores where the employees aren’t in on the scam. And black-market goods are a lucrative export, too: China sends millions of pairs of counterfeit shoes to the EU and billions of dollars’ worth of counterfeit pharmaceuticals to Africa and Southeast Asia. ... The Pinkerton Agency got its start fighting counterfeiting nearly 170 years ago when Allan Pinkerton, a Scottish immigrant, busted a gang manufacturing fake money along the Fox River in Illinois. Abraham Lincoln credited the young agency with foiling an early assassination plot that was to take place during the train ride to his inauguration. Throughout the Civil War, the president relied on Pinkerton detectives to handle tasks now performed by the FBI, Secret Service, and CIA.
In some Asian markets, white fruit is coveted, and Driscoll’s has conducted commercial trials in Hong Kong. But although the company has been breeding whites for fifteen years, it has yet to introduce any to U.S. grocery stores; Americans, accustomed to an aggressive cold chain, typically fear underripe fruit. “I brought these to a wedding, and all the parents were telling their kids not to eat the white ones,” a Joy Maker remarked. Lately, however, Driscoll’s focus groups have shown that millennials, adventurous and open-minded in their eating habits, and easily seduced by novelty, may embrace pale berries. With these consumers, unburdened by preconceived notions of what a white berry should look or taste like, Driscoll’s has a priceless opportunity: the definitional power that comes with first contact. Before that can happen, though, the berries must conform to Driscoll’s aesthetic standards. Stewart held a 21AA176 up to his face and inspected it carefully. ... Driscoll’s, a fourth-generation family business, says that it controls roughly a third of the six-billion-dollar U.S. berry market, including sixty per cent of organic strawberries, forty-six per cent of blackberries, fourteen per cent of blueberries, and just about every raspberry you don’t pick yourself. ... Produce is war, and it is won by having something beautiful-looking to sell at Costco when the competition has only cat-faced uglies. In the eighties, beset by takeover ambitions from Chiquita, Del Monte, and Dole, Driscoll’s embarked on a new vision: all four berries, all year round. ... For the shopper, the only impression that matters is the Driscoll’s name, and the red berries, as uniform as soldiers or paper valentines.