Internal-external co-operation in protecting IP rights

By Frank Liu, Tiantai Law Firm
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In protecting the intellectual property rights (IPR) of enterprises in China, effective co-operation between enterprises and their in-house counsel and external lawyers is among the important factors having a bearing on the ultimate effectiveness of IPR protection, in addition to overall strategies, implementation schemes and specific actions.

Even for those enterprises with robust internal IPR systems, co-operation with external lawyers is still indispensable. Some hold the misconception that external lawyers are not necessary for enterprises that have strong in-house teams. However, in practice, it is exactly the enterprises with professional support from internal IPR departments that have targeted needs for external lawyers, and that can more easily reach consensus with external lawyers during communication.

刘建强 -FRANK LIU-天驰君泰律师事务所-合伙人-Partner -Tiantai Law Firm
Frank Liu
Partner
Tiantai Law Firm

Legal demands of IPR services vary among enterprises, but in practice the majority can be classified into the following four circumstances: (1) an enterprise has a sound internal IPR system and a strong in-house legal or IPR team, and turns to external lawyers only sporadically; (2) an enterprise entrusts external lawyers with overall management of its domestic IPR protection activities, from the formulation of strategies to the implementation of specific actions; (3) an enterprise maintains a separate IPR position internally and goes to external lawyers for certain types of IPR matters; and (4) an enterprise has no full-time IPR position and engages external lawyers for IPR cases that arise only occasionally.

Despite diversified demands of different enterprises for IPR services, it is advisable to turn to external lawyers for the following matters, considering that the contents of IPR services are already largely systematic.

Construction of IPR frameworks and formulation of strategies. A number of experienced external lawyers have helped foreign and domestic enterprises build their IPR systems and perform overall management of their IPR affairs in China. Therefore, they hold certain advantages in terms of their diversified experiences in the formulation of overall strategies and the types and number of the difficult and complicated cases they have dealt with.

In addition, a sound strategy for overall IPR protection is needed to prevent the situation where problems are approached passively and cannot be resolved completely. With such a strategy in place, measures taken against complicated cases of premeditated infringement will be more effective. Only when an IPR fortress capable of attack, retreat and defence is set up from different dimensions that stretch from the establishment to the protection of rights, from trademarks, copyright and domain names to patents and trade secrets, and from the issuance of lawyers’ letters and filing of complaints to fighting against counterfeiting and initiation of lawsuits, can the IPR of enterprises be effectively protected.

Major and complicated cases. The IPR cases that a single enterprise will encounter are of relatively fixed types. Since the in-house counsel of an enterprise need to also deal with and co-ordinate relations among different departments of the enterprise, and assist in the business-related matters of the enterprise, it is impossible for them to spend a large amount of time on the details of each specific IPR case. Relatively speaking, external lawyers who specialize in IPR hold some advantages in terms of the types and number of complicated IPR cases that they have handled. In this regard, turning to external lawyers can achieve better effects.

Cases that will be more cost-effective if handled by external lawyers. For certain types of cases that are in large numbers, specialized law firms and agencies have cost advantages because they are more efficient through continuous process optimization after handling such types of cases for a long time. Enterprises can achieve better cost-effectiveness by engaging external specialized law firms or agencies to deal with such cases.

In summary, an enterprise will have different demands for IPR legal services at different stages of its development. The IPR affairs of an enterprise may experience development from the absence of any support from having internal professional support, to the gradual establishment of corresponding positions and subsequently corresponding management departments. During these different stages, the enterprise may need to have external specialized lawyers involved to assist it in addressing different IPR issues.

In-house counsel and external lawyers have their own advantages. The in-house counsel of an enterprise are more familiar with the enterprise’s operations, understand better the special requirements and ideas of the management in building the IPR management system, and are clearer about the objectives that the enterprise intends to achieve in handling specific cases. In addition, in-house counsel are clearly more advantageous
in internal communication, collection of internal evidence and collation of historical enterprise records.

On the other hand, external specialized lawyers and agencies may employ their own experiences to provide enterprises with useful recommendations from different perspectives when they assist the enterprises in building integrated IPR frameworks and designing overall strategies. Moreover, external specialized lawyers have many chances to encounter specific cases where the lack of an overall strategy, or the improper design of strategies, has resulted in losses. As a result, they will be able to make arrangements in advance, in framework building and strategy design, to preempt potential risks. Furthermore, external lawyers have advantages in terms of the types and concentration of difficult and complicated cases and can, therefore, deal with particular types of cases in a more cost-effective manner.

To conclude, both internal and external support are essential to enterprises in the establishment and protection of their IPR when they have reached a certain level of development. It is desirable for the in-house counsel and external lawyers of an enterprise to communicate and exchange with each other frequently so that they can gain insight into the needs of the enterprise and each side’s advantages, and get involved as early as possible when a need or case arises. This is the only way to ensure that enterprises can be provided with the strongest support in IPR protection.

Frank Liu is a partner at Tiantai Law Firm

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