Event Report

On 16 May 2019, The Legal 500 and Commerce & Finance Law offices gathered together a selection of some of the most experienced senior in house legal counsel in China to discuss the important topic of ‘how to best manage international disputes’.

Over 40 GCs attended from both international and domestic companies based in Beijing to share their experiences and key strategies in resolving legal disputes tactically and cost effectively. Other topics discussed included: How GCs add value to dispute management; and how law firms can more effectively serve GCs when it comes to handling litigation and arbitration.

According to Hongji Li, senior partner at the firm, ‘the challenges when managing a cross-border dispute lie in timing, cost, and target management.’

The half day event, conversed predominantly in Chinese, touched upon the following areas:

CHINA-US TRADE WAR

China and the US are continuing the trade war, tariffs are up and there’s the threat of more to come. The current trade conflict concerns two major issues: lack of reciprocity in terms of tariffs, market access and investment; and more importantly, the concerns over technology transfer and high-tech industrial policy.

FOREIGN INVESTMENT LAW

The National People’s Congress of China adopted the new Foreign Investment Law on March 15, 2019, with a view toward unifying and streamlining the foreign investment framework into China. The Foreign Investment Laws will go into effect on January 1, 2020. Qing Cui talked about the impact of the new law and its implications.

IP PROTECTION STRATEGY IN CHINA

A number of the GCs attending on the day are from traditional or disruptive tech companies, and some of them are from the pharmaceutical sectors, in which intellectual property is a crucial part of their businesses.

Concerns over protecting IP have traditionally shaped the relationship between US-based companies and PRC-based manufacturers. Foreign companies have been reluctant to litigate IP disputes in China due to perceived bias by the courts, the low level of damages awarded for IP claims, the lack of clarity in IP laws.

The situation is changing rapidly. According to a 2018 report by the World Intellectual Property Office (WIPO), “China [is] driving the growth in filings for patents, trademarks, industrial designs and other IP rights that are at the heart of the global economy”. Chinese companies are also increasingly pursuing rights outside of China. Furthermore, changes to the patent and IP laws have seen China take the lead in some areas, and protections for tech-related IP are now very strong.

However, there are still many examples of mistrust between the US and China, most famously with allegations of Huawei’s IP and patent infringement (and more generally the concerns over Huawei running 5G networks outside China). In short then, the picture is complicated.