Foley, McDermott, Marks & Clerk bring IP know-how to Shanghai

The bustling Shanghai legal market has welcomed three new firms in the past seven days.

US firms Foley & Lardner and McDermott Will & Emery and UK patent and trademark attorneys Marks & Clerk have all set up shop, or are in the process of setting up shop, on the Chinese mainland.

But rather than go on the hunt for corporate finance and M&A deals, the firms have placed IP at the heart of their China strategy.

McDermott is no stranger to international IP and Foley has taken the bold step of hiring Weil Gotshal & Manges China IP head Catherine Sun.

Foley made the daring play despite not yet obtaining a licence to set up the office in Shanghai.

Meanwhile, the attorneys at Marks & Clerk have gone out to market themselves expressly as IP experts to big Chinese clients doing business internationally.

It reflects the fact that IP in China now means more than simply protecting European interests against the counterfeiters. There are opportunities for foreign firms to pick up Chinese IP clients as the life sciences, telecoms and manufacturing industries begin to mature.

Keith Hodkinson, head of Marks & Clerk’s China practice in the UK, said: “Chinese SMEs [small and medium-sized enterprises] have no real tradition of owning or respecting IP rights. But the larger companies are becoming increasingly sophisticated. They’re beginning to realise that they can use the system in a positive way rather than ignore it.”

It is illegal for foreign-owned firms to provide local advice, so Marks & Clerk has set up its office not to prosecute patents for European companies, but to liaise with Chinese clients.

“The office essentially acts as a liaison point for Chinese clients and provides us with more infrastructure,” says Hodkinson.

One of its most important clients is the Chinese telecoms giant Huawei, which instructs the firm to look after its patent portfolio in Europe.

Hodkinson says Huawei is “a classic example of a Chinese company that has grown up and is now fighting on an equal footing with European companies”.

Foreign companies are also keener to protect their IP in China. Last year China’s State Intellectual Property Office received more than 570,000 applications for patents, which was up by almost 20 per cent from 2005.

Around 85 per cent of these were from overseas companies, with Japan the biggest filer with almost 38,000.

Foley will hope to be one of the firms leading the charge for both IP portfolio management and contentious work for foreign companies operating in China, along with McDermott.

Expansion of the IP market in mainland China has been long awaited. Like buses, you wait forever for a Shanghai IP office launch, and then three come at once.