Our IP practice in China - Freshfields

Intellectual property
Create, protect and
maximise your IP
Our practice in China
Freshfields Bruckhaus Deringer llp

These days, intellectual property is a
board-level agenda item for businesses
globally. How you create it, defend it
and exploit it will directly affect your
growth and profitability.
But in China, having the right IP
strategy can be decisive to the very
success or failure of your business.
Ten years ago, perception was that
China offered little or no protection
for IP rights. Now, IP has become the
number one strategic weapon under
Chinese law in the arsenals of both
domestic and foreign companies.
Get it wrong, and the pitfalls can
be severe.
We can help.

We can help you avoid the obstacles
Our intellectual property (IP) practice
is one of our firm’s core competencies.
Our model is to be there for clients at
critical times when it matters the most.
For over a decade now, we have advised
the leading companies in China, both
multinational corporations and emerging
Chinese companies. Our team comprises
internationally qualified and PRC‐qualified
lawyers experienced in advising
clients in multiple jurisdictions and in
managing multi-jurisdictional projects.
If you face the complex demands of
IP/technology-driven M&A transactions
or commercial projects, if you need
counselling on business-critical
patent litigation, or strategic advice
on how best to manage complex
brand portfolios, we can help.
We focus on what really matters to you
Six sectors, one worldwide network
We focus on six primary industry sectors:
• telecommunications, media
and technology;
• consumer and health;
• energy and natural resources;
• infrastructure and transport;
• financial services and banking; and
• chemicals.
We develop our specialist knowledge
of these sectors and the commercial
and technical contexts in which
our clients operate – because that’s
crucial to the services we provide.
This enables us to go beyond simply
responding to today’s issues. We think
ahead: we identify future challenges
and we use our understanding to apply
practical legal solutions that best fit
your business’ needs and objectives.
Finalist IP Law Firm of the Year
in an Emerging Market
Intellectual Property Awards 2011
Freshfields Bruckhaus Deringer llp
Create, protect and maximise your IP
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Here in China, we have a team of largely
Mandarin-speaking lawyers, many having
technical backgrounds. Our team works on
PRC law IP issues day in, day out. We also
help our Chinese clients with IP issues
arising on outbound transactions and work
with lawyers across the Freshfields network
to provide a comprehensive and unified
approach to resolving your IP issues. We
share knowledge and best practice across the
Freshfields network to ensure that we deliver
a co‐ordinated international approach.
We advise in key strategic areas
• IP litigation, involving patents,
trade marks, passing off, copyright
and confidential information;
• IP and IT transactional advice in M&A,
joint ventures and initial public offerings;
• negotiation of brand licensing and
trade mark co-existence arrangements
and IP commercial agreements such as
franchising, sponsorship, distribution
and manufacturing/sourcing agreements;
• co-ordination and strengthening of
China trade mark, domain name,
patent and copyright portfolios and
harmonising global filing strategies;
• solutions to advertising and
unfair competition issues;
• development of practical business
protocols that help reduce the
threat of IP leakage and help realise
the value of clients’ IP rights;
• internet-related advice, covering
e-commerce, m-commerce and new media
issues, including website development,
encryption, e-banking, international
cyber-piracy and domain name disputes;
• IT-related transactions and litigation,
including software development
transactions, licensing arrangements
(technology transfer), systems
procurement and integration, research
and development collaborations and
transactions involving major IT and
business process outsourcing and
business separation (spin-offs); and
• data protection advice on stand-alone
compliance projects, enforcement
actions and corporate transactions.
Finalist IP Law Firm of the Year
Asian Legal Business Law Awards Hong Kong 2011
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Freshfields Bruckhaus Deringer llp
Create, protect and maximise your IP

We offer not just reach but also
real depth of expertise
Examples of our recent
IP experience in China.
These should give you a flavour of
the types of matters we take on
and how we handle them:
PepsiCo in its strategic alliance
with Tingyi-Asahi
When PepsiCo, the world’s second-largest
food and beverage company, wanted
to form a strategic alliance with one
of its largest counterparts in China,
Tingyi‐Asahi Beverages, it turned to us. The
IP and commercial aspects were central
to this deal. PepsiCo swapped its China
bottling operations for an equity stake
in Tingyi-Asahi Beverages. If approved by
regulators, Tingyi-Asahi Beverages will
become the master franchise bottler for
PepsiCo’s branded non-alcoholic beverages
in China and will be granted exclusive
rights to manufacture and distribute
all of PepsiCo’s signature non-alcoholic
beverages, including Pepsi, 7Up, Gatorade
and Tropicana, boosting PepsiCo’s platform.
This was a truly landmark deal in the China
market and was awarded China Business
Law Journal’s 2011 Deal of the Year in the
category of foreign direct investment.
The deal showcases our unmatched ability
to structure and execute complex crossborder
and cross-cultural franchise and
branding deals. It is also a great illustration
of the breadth of our IP practice in China,
and of the benefits of Freshfields’ broad
international platform and strength in all
key practice areas. We worked closely with
colleagues in our corporate, antitrust, tax
and dispute resolution departments from
our Hong Kong, Beijing, Shanghai, New York
and London offices to bring off this deal.
Dyson in a patent and copyright
infringement action in Hong Kong
Dyson has an enviable reputation for
innovation. Its vacuum cleaners and
other household appliances are protected
by more than 700 granted patents and
over a thousand patent applications.
However, when it brought out its Air
Multiplier bladeless fan to widespread
acclaim, it almost immediately faced
a major counterfeiting threat from
low-cost manufacturers in China.
That was bad enough, but when a major
and previously reputable high-street
retailer in Hong Kong began selling a
high‐quality copy, Dyson’s whole reputation
for innovation and unique product
features began to be called into question
on blogs and chat sites in the territory.
So when we received the call from the
UK late one evening in 2011, we leapt into
action. Our client had just learnt that its
first patent for the Air Multiplier would
issue in Hong Kong a few days later, so we
had to act fast. After a few weeks gathering
evidence and putting the submissions
together, two hearings (and very little sleep),
Freshfields had secured a rare interim patent
and copyright injunction at the High Court
in Hong Kong to block further marketing
and sales of the infringing product.
Freshfields Bruckhaus Deringer llp
Create, protect and maximise your IP
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Merck/MSD on a pharmaceuticals
joint venture with Simcere
Pharmaceutical Group
Our life sciences practice acts for many of
the leading pharmaceutical, biotechnology
and medical device companies in China.
We believe that we are one of the few
international law firms in China to
present the full cross-practice offering
at the highest level, including antitrust
and pharma regulatory and compliance
advice in this vital growth market.
Merck/MSD’s joint venture with Simcere,
a leading emerging pharmaceutical
company in the PRC which is listed on the
NYSE, will provide significantly improved
access to quality medicines in major
cardiovascular and metabolic therapeutic
areas. The joint venture will offer a
combined portfolio of selected medicines
from both companies. The deal structure
also included a co-marketing agreement,
believed to be one of the first of its kind
in China. Pharmaceutical co‐marketing
agreements involve a uniquely challenging
interplay of IP, antitrust, regulatory
and commercial considerations.
Drawing on our experience of advising
on similar co-marketing arrangements in
Europe and Japan, we helped Merck/MSD
to execute this deal in less than a month
from term sheet to signed agreement.
Imagi International’s acquisition
of Toon Express Group
Imagi International is an animated motion
picture producer and distributor listed
on the Hong Kong Stock Exchange. Toon
Express Group owns and manages various
animation character assets, including the
popular Chinese animation characters
‘ 喜 羊 羊 与 灰 太 郎 Pleasant Goat and Big Big
Wolf’ loved by children across Asia. We
were involved in detailed analysis of the
IP portfolio (around 1,000 trade marks
and several hundred copyright works),
as well as of some 150 outbound licences.
We also advised on structuring the key
strategic brand management co-operation
arrangement between Toon Express and
Creative Power Entertaining, the creator
and distributor of the Pleasant Goat
and Big Big Wolf TV series and feature
films, and on the agreement between
Toon Express and the Disney Group for
the worldwide merchandising of Toon
Express’ animation assets. This is the first
time that indigenous Chinese content
has been exported internationally.
Zhejiang Geely Holding Group
on its $1.8bn acquisition of
Volvo Car Corporation
Geely’s acquisition of Sweden’s Volvo
automobiles was the first takeover
of a global premium carmaker
by a Chinese corporation.
The transaction was awarded the
FT Innovative Lawyer Award for 2010.
In its 2010 innovation report, issued
in February 2011 and based on client
interviews, the Financial Times described
the Freshfields’ work on this transaction
as ‘stellar’. Members of our IP practice
were part of the large cross-practice
and international team that was
assembled to make this deal happen.
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Freshfields Bruckhaus Deringer llp
Create, protect and maximise your IP

The FT innovation report stated that
‘In the largest ever international
industrial acquisition by a private Chinese
company, the firm overcame both
technical intellectual property hurdles
and cultural barriers to complete what
many had considered to be an impossible
transaction. Deals of this complexity in
terms of IP issues and size had never been
done before because of the suspicions
of Western corporates regarding letting
some of their most valuable IP rights fall
into the hands of Chinese companies…
‘This outstanding deal showed lawyers
acting in a new way, as much as diplomatic
dealbrokers as technical legal advisors.
It was clear that without the presence
of Freshfields’ lawyers, this transaction
was likely to have fallen apart.’
Hong Kong
11th floor
Two Exchange Square
Central, Hong Kong
Beijing
3705 China World Tower Two
1 Jianguomenwai Avenue
Beijing 100004, People’s Republic of China
Shanghai
34th floor, Jin Mao Tower
88 Century Boulevard
Shanghai 200121, People’s Republic of China
Your Freshfields contacts in China
Connie Carnabuci
Partner
T +852 2846 3300
E connie.carnabuci@freshfields.com
Mark Parsons
Partner
T +852 2846 3341
E mark.parsons@freshfields.com
Deal of the Year
China Business Law Journal 2011
Richard Bird
Counsel
T +852 2913 2660
E richard.bird@freshfields.com
Freshfields Bruckhaus Deringer llp
Create, protect and maximise your IP
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www.freshfields.com
Freshfields Bruckhaus Deringer llp is a limited liability partnership registered in England and Wales with registered number OC334789. It is authorised and regulated by the Solicitors
Regulation Authority. For regulatory information please refer to www.freshfields.com/support/legalnotice. Any reference to a partner means a member, or a consultant or employee with
equivalent standing and qualifications, of Freshfields Bruckhaus Deringer llp or any of its affiliated firms or entities. This material is for general information only and is not intended to
provide legal advice.
©Freshfields Bruckhaus Deringer llp – April 2012, 33094