Asia-based IP practices could be set for significant growth, according to Magic Circle IP lawyers.
Hong Kong-based Freshfields lawyers Connie Carnabuci and Mark Parsons said that a combination of factors in Asia—the economic downturn, regulatory changes and growing IPR awareness—have created the "perfect storm" for growth in regional IP practices.
"With the downturn people are much more intolerant of any transgression on their rights because everybody is fighting for as much revenue and as much market share as possible as the pie is shrinking," she said. "In a more bountiful economy they will put up with it as they can make money elsewhere. You can't sit on your hands if you know someone's eating into your market, as you're accountable to meet revenue targets."
Parsons added that regulatory improvements, particularly in China, are another significant factor in the growth. "The amount of money that courts are awarding in China is rapidly increasing and it seems to be approaching sums in the more mature western markets," he said. "If you look at China's shift from a user to an owner of IP, it's no accident."
Recent cases, such as the Chint-Schneider patent infringement case which awarded a hefty US$25m settlement to China-based Chint, illustrate how Chinese corporates are making more use of their IP assets.
"Previously the problem was that the damages in China were very low," explains Carnabuci. "I used to always say to clients you don't litigate in China for damages; rather, you are litigating to assert your rights in the market."
That however, has certainly changed. A recent survey conducted by Freshfields found that in the current economic downturn 38% of companies with IP assets are willing to launch litigation proceedings to protect IP rights. Thirty percent also indicated that their use of IP assets will also increase in the current economic climate-for example through measures such as licensing or joint ventures.
Carnabuci said in the current economic crisis businesses are now considering restructuring or alternative options such as joint ventures to gain IP assets from which revenue can be generated. "The common theme is that whether you're looking at the restructuring or the litigation sides, these IP assets have become the business lifeline and so clients are focusing on ways they can protect their value," she said.
Parsons agrees. "From a costs perspective obviously it's attractive ... as they're getting greater use of that asset. And for the new entrants [acquiring companies] they don't have to build it from scratch," he said.
The numbers seem to substantiate Carnabuci's theme. Since implementing a national IPR strategy last year, China's State Intellectual Property Office has recorded a 19% jump on the number of domestic and foreign patent applications.
Law firms in Asia also seem to be responding to the growth in demand for IP advice. In the past few months, DeHeng (Beijing), Foley & Lardner, Bingham McCutchen, Rouse and Dacheng have all expanded their IP practices with significant hires.
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