China lawyers

Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments or phone calls as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a quick general answer and, when it is easy to do so, a link or two to a blog post that provides some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

I gave a long interview last night with a Canadian reporter regarding China. The focus was mostly on what the international lawyers at my firm were seeing with China in light of the Trump tariffs. At one point though, I was asked one of the most common questions I get asked by reporters and it went something like this: “What about intellectual property in China. Is that a risk for foreign companies that do business in China? Are things getting any better on that score?”

My initial answer was something like this: “I am going to give the same answer I have given for at least a decade. Things are not as bad for intellectual property in China as most believe and the intellectual property risks faced by companies that do business in China have declined every year for at least the last 15 or so years.”

But then all of a sudden (like right after I heard what I had said), I realized that my knee-jerk response (conditioned by the last 15 or so years) was no longer true. I then said something like the following:

Wait a second. I take that back. What I said was true but it stopped being true maybe 3-5 months ago. When a Western company goes to a Chinese manufacturer to have a new product made, that Chinese manufacturer looks at the new product and wonders whether it can make more from that product by “stealing” it and making it for itself or by making it for the Western company for the next five years. Most of the time, after conducting that cost benefit analysis, the Chinese manufacturer would choose to make the product for the Western company for the next five years.

But now, what with so many Western companies having moved their manufacturing outside China and so many more looking to do so (See e.g. Would the Last Company Manufacturing in China Please Turn Off the Lights and Doing Business Outside China: It’s Thailand’s Time), the calculus for Chinese manufacturers has changed. The Chinese government’s increasing antipathy towards private enterprise does not help either. All this means the new analysis for Chinese manufacturers seems to be whether they can make more by making the product for the Western company for the next year or so than they can by stealing it right now. So what we are seeing is Chinese companies stealing products immediately, rather than waiting until it has become somewhat clear that the Western company for which it is making the product will be moving to another manufacturer.

So yes, the intellectual property risks for Western companies doing business with China or in China are higher now than they were because the relative benefits to Chinese companies stealing your IP have gone up.

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.