More than 3,800 patents filed by Bosch group worldwide. New manufacturing plants opened in Xi’an and Hangzhou. Over EUR3.6bn invested in new R&D. 2009 was quite a year for Bosch China.

And as the company’s stunning new-tech lighting blazed colour across the sleek pavilions of the Shanghai World Expo recently, its China general counsel Rainer Bischof could reflect on a 21% growth in revenue – to RMB27.4bn – that made China Bosch’s third largest market after the US and Germany. Of course, with success comes responsibility; and with as many as 47 separate legal entities under the Bosch China holding company, Bischof and his team certainly have their work cut out.

Germany to China: the same but different

Bischof was transferred to Bosch China as local general counsel from German headquarters at the start of 2009, after the departure of his predecessor. Although he had spent all of his life in Germany, Bischof experienced little culture shock upon his arrival in China. “Inevitably, livingin Shanghai is quite different from living in Germany, but Shanghai is such an easy place for foreign expats to just slip in. It is not nearly as shocking as I initially thought it would be,” he says.

Even when it comes to dealing with the local legal industry, Bischof struggles to point out significant challenges. “I really don’t think that China is that different in their legal requirements. Obviously, approval procedures are very different to those of Germany, but the framework for legal advice and how we work together as colleagues are very similar,” he says.

Bischof says the points of distinction of China’s legal industry when compared to Germany’s are the rapid completion of work and the high career mobility of its legal professionals. “There seems to be more engagement and more effort made here to retain people because of the dense pool of opportunity and relatively tight supply,” says Bischof.

Local team

►►Bosch legal team breakdown

• One lawyer who deals with automotive original equipment sales (contract general terms and conditions)

• One lawyer who takes care of Bosch China’s two largest automotive subsidiaries

• One lawyer who deals with consumer and industrial goods business (power goods, packaging machines

and hydraulics)

• One lawyer who deals with automotive aftermarket and trade business or automotive goods

• One lawyer who looks after other automotive subsidiaries, deals with the gas heating and real estate

business (renting and acquiring premises)

• One IP team: one patent attorney and one patent engineer

• One paralegal (set to become legal counsel) and one legal assistant

Bischof is the only non-Chinese staff member working in Bosch China’s legal team of 11. As part of Bosch Group’s ‘local for local’ strategy, the rest of the team is made up of domestic lawyers.

“We have locally qualified lawyers in our legal teams all over the world – it is part of our staffing strategy,” says Bischof. “Being a non-local is an exception. I am one out of maybe only three or four Bosch counsels working outside of their home jurisdiction on a long term assignment.”

The first local lawyer was hired in 2003, after Bosch first incorporated a holding company. A couple of years after that Bischof’s predecessor was dispatched to China to head up the legal department and to bridge the cultural differences. Besides overseeing general legal work, Bischof’s role as general counsel also includes facilitating communication between his German and Chinese colleagues.

Having worked for Bosch for over 16 years, it has become second nature for Bischof to know how things work in headquarters. “Certain things have their specific ways of getting done in
Germany and I am here to explain and relay to my colleagues why things are the way they are,” says Bischof. Since he joined the China team in 2009, he has added another two lawyers to the team. “The China legal team is growing much faster than our other global legal departments. It is simply because our Chinese operation is the fastest-growing and is also the largest in the world outside Germany,” he says.

Protecting Bosch ideas
One of the most significant developments for the legal team at Bosch China is the recent increased emphasis on protecting its intellectual property. “Until a year ago, we only had one IP lawyer and now it has grown to three. We are now looking for two more IP lawyers and a licensing lawyer. Suffice to say, we are in quite a growth push for IP matters,” says Bischof.

This is unsurprising given the company filed more than 3,800 patents worldwide last year. “We want to be in a position where we can adequately protect all of the ideas that are generated by our R& D teams,” he says. While the number of infringements is still high in the mainland, Bischof believes China’s IPR system doesn’t deserve its notoriety. “It actually works quite well if you play with the rules properly and implement an adequate filing policy in China.

The high competitiveness of other Chinese companies has also pushed Bosch towards a stronger IP protection regime. “Our Chinese competitors are very active; this is also why we need to have a very strong patent team, simply to have an eye on the market to make sure we see what is happening when we do our own R&D. We make sure we know what the competitors’ landscapes around us are,” he adds.

External help
The 11-strong legal team is sufficient to handle most legal matters, so the need to engage external counsel is rare. According to Bischof, there are only isolated cases in which they would require external advice. For instance, in dispute resolution work and in M&A deals, in which due diligence becomes a capacity issue, Bischof turns to either local PRC firms or firms from Bosch’s global panel of preferred suppliers. Bischof refutes, however, the idea that large brands equate to better advisors. “A big brand doesn’t guarantee excellent advice. As a general counsel, I believe in word of mouth – if someone I know and trust tells me that a law firm is really good then frankly I don’t care whether this firm has a big name or gives out glossy brochures,” he says.

With subsidiaries spread across many locations – among them Suzhou, Wuxi, Changzhou, Nanjing, Dalian, Guangzhou and Hangzhou – the company also relies on regional firms for advice. “For labour arbitration cases we need truly local firms,” says Bischof. “Rates and fees play a great role in winning mandates for regional work.” ALB

Bosch China business highlights 2009 -2010

February 2009: Production of GWS 7 Professional – the small angle grinder, designed and manufactured by Bosch China, goes into production in Hangzhou August 2009: CVT cooperation with BAIC – Bosch and BAIC signed an agreement to jointly develop CVT for middle-class and premium cars October 2009: One million brake control systems and 2.5 million wheel speed sensors are produced in the first three quarters of 2009 December 2009: Electric Vehicle and Hybrid Technology in China – The Bosch “Hybrid and Electrification” and “Automotive Body Electrics” business units are established together with United Automotive Electronic Systems February 2010: New Rexroth plant: A new Rexroth plant starts operation in Xi’an March 2010: Packaging plant expansion – Work to expand the Bosch Packaging Technology plant in Hangzhou is completed, doubling its production area and increasing production capacity