"There's a pattern"— Shark Tank investor Kevin O'Leary shares that China's approach to innovation harms American companies
In a May 2, 2025, interview on Fox Business, Shark Tank investor Kevin O'Leary addressed the concerns surrounding China's approach to innovation, highlighting how it affects American companies.
When asked about intellectual property issues and the potential impact of Chinese practices on American businesses, O'Leary emphasized that China’s strategy toward innovation is harming U.S. companies. He explained,
“There’s a pattern though, Maria, that with China you should be aware of, particularly innovation in America.”
The Shark Tank investor detailed how this approach undermines American innovation and threatens small businesses.
Shark Tank's Kevin O'Leary on China's impact on American innovation and intellectual property theft
Intellectual property theft and knockoffs
Kevin O'Leary discussed how China's practices of intellectual property theft and product imitations impact American businesses, particularly when innovative products are copied at scale. He used the example of a U.S. product, the Drain Wig, designed to reduce plumbing costs by catching hair in hotel drains.
“I used an example of very simple product called Drain Wig which is an innovation in America to help hotel owners reduce plumbing costs by catching hair and drains… 40 knockoffs right put the company out of business,” he explained.
He explained that this is one of many instances where U.S. businesses invest significant resources in innovation, only for their ideas to be copied by Chinese manufacturers. O'Leary further pointed out that once a product hits a certain level of success, it is frequently imitated by competitors, undermining the original creators.
"When a product or service is actually created here and people spend hundreds of millions in R&D when it hits a $5 million run rate it gets knocked off," he explained.
Impact on business growth and American innovation
In the interview, O'Leary elaborated on how the constant imitations from China affect the growth prospects of American companies. He explained that U.S. businesses often spend significant time and resources developing new products, only to have those innovations quickly copied, making it difficult to sustain growth.
O'Leary discussed that the competition from these knockoffs makes it challenging for American companies to maintain their market share, especially when their competitors do not face the same costs for R&D or intellectual property protection.
The Shark Tank investor also underscored that these practices limit the potential for American companies to expand and scale. He pointed to the broader implications of China’s approach, noting,
“It's so simple but it's a patented product...put the company out of business.”
The role of patents and enforcement challenges
During the interview, O'Leary discussed the challenges associated with patent enforcement and intellectual property protection, particularly in China. Fox reporter Maria Bartiromo brought up the issue of how patents are not taken seriously in China, to which O'Leary agreed. She shared,
“Patents come on, what are patents? Nobody has patents,” quoting a conversation with a Chinese national.
O'Leary also pointed out that even when companies in the U.S. secure patents, enforcement can be problematic. The Shark Tank investor stated,
“I mean we’ve got to stop this,” referring to the need for stronger protections and enforcement to combat intellectual property theft.
He mentioned that without such measures, U.S. companies continue to face significant risks from companies that simply copy successful products without regard for intellectual property rights. The lack of an effective system to protect patents in China exacerbates the challenges faced by American innovators.
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