The Hindu Business Line : Indian IPR law firm courts China

Remfry and Sagar has become the first Indian law firm to set up offices in China and, according to Dr V. Sagar the firm's Director, is indeed the first Indian law firm to open a full-fledged foreign office anywhere in the world.

"It's a natural progression," says Dr Sagar, of the decision to open a representative office in the Chinese capital. "It's reflective of the changes taking place in India across the business spectrum. We in India are after all becoming MNCs in our own right."

Remfry and Sagar, headquartered in Gurgaon, has specialised in intellectual property rights (IPR) protection for most of its 180-year- history. The firm's Beijing office aims at becoming a one-stop-shop for the legal needs of Indian corporations in China and, eventually, of Chinese firms in India. It also hopes to serve the interests of its MNC clients which have China operations.

Rampant piracy

As an IPR firm, Remfry and Sagar will certainly have its work cut out in China that is regularly accused by the United States and the European Commission as being one of the world's worst IPR offenders. Piracy and counterfeiting are rampant in the mainland as a stroll down a Chinese city's shopping district will reveal. Fake Rolexes, "Gucci" handbags and pirated DVDs that cost less than $1 each make the Middle Kingdom a shopaholic's nirvana but have corporations and the governments that support them, fuming and frothing.

The US government estimates that piracy within China costs American companies $20-24 billion a year in damage, a figure that rises to $50 billion if European and Japanese firms are included.

However, it is not only American and European companies that have a grouse with China's lax IPR enforcement but Indian corporations as well, several of which are already clients of Remfry and Sagar. "We have cases of trademark and patent infringements across a diverse cross-section of sectors," says Mr Nitin Sen, Remfry and Sagar's new Beijing-based representative.

"There are cases of needles being manufactured in India and counterfeited in China. Pharmaceuticals and electronics are other areas in which Indian companies have approached us for help," he elaborates.

Edge over Western firms

But Mr Sen is confident that despite China's poor international reputation in IPR protection, his firm will be able to successfully intercede on behalf of its clients. He believes Remfry and Sagar has an advantage over Western law firms operating in the same field, as his firm will be able to leverage its India experience; the IPR environment is similar to that of China's.

"Laxity of enforcement, desi vs. videshi considerations, a large poor population whose needs must be taken into account, and the desire to absorb foreign know-how, are all factors that are common to India and China," he explains.

For countries such as India and China cracking down on piracy and counterfeiting would mean the closing offending factories, which in turn would lead to a loss of jobs and revenues. Mr Sen explains that there is common belief that IPR protection is a luxury for rich nations and not something relevant or applicable to the developing world.

The manner in which a case must be pleaded before a judge to convince her of its merits is thus similar in both countries says Mr Sen.

"They (the judges) don't automatically believe in the sanctity of trademarks or patents. We must explain, for example, that while in the short-term a particular drug might seem quite expensive, if that drug company cannot recoup the high costs of research and development it will prevent that company from developing other drugs in the future that might save tens of thousands of lives."

Getting serious

In fact, there have been some signs that China, bound by its WTO commitments to crack down on IPR infringement, has begun to understand the long-term benefits of IPR protection and is consequently taking enforcement more seriously. China's courts, notorious for their tacit support of defendants in IPR cases, have of late handed down several high-profile judgments in favour of both domestic and foreign plaintiffs. For example, in January, a Shanghai court sided with the Seattle-based coffee company, Starbucks, in a trademark dispute, fining a Shanghai coffee house company $62,000 in damages and ordering it to change its name because of it being too similar to that of the American company.

A clear sign of the increasing awareness of IPR in China is the growing number of IPR cases being filed in court, the bulk of them by domestic companies. In 2004, Chinese courts dealt with 12,205 civil intellectual property cases, an increase of 32 per cent from 2003 and only a few dozen, two decades ago.

But while Remfry and Sagar is optimistic on being able to secure relief for clients, its operations will be hampered by Chinese regulations, by which no foreign firm can practice Chinese law or appear in Chinese courts.

Foreign law firms, of which 162 have representative offices in China, thus need to act in collaboration with Chinese partners and can only serve in an advisory role.

Dr Sagar, however, is unfazed. He says that his firm is in China for the long term and is confident that with time the scope of operations for foreign law firms will be widened.

"For the moment we are not bothered about making profits but in establishing relationships," he says "Indian firms are finally in a position to be able to afford that luxury."

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