Rouse’s 18 years of IP protection service in China—An interview with Ms. Linda Chang, Rouse’s China Country Manager

2011/12/27,By Doris Li, China IP,[Comprehensive Reports]

Rouse & Co. International AT LAW (Rouse) is the first international managerial & advisory institute for IP rights in China. It has taken part in the whole process of China’s IP protection practice; starting from scratch, to limping after China’s accession to the WTO and now Chinese enterprises’ successful upholding and defense of their legal rights in world the market.
Rouse’s accession to Asian market can be traced back to its opening of an office in Beijing in 1993. The major reason behind the choice was that there were many difficulties and obstacles for obligees to have theirs rights protected due to the ineffective IP protection in China at that time. “China’s manufacturing industry began its initial development as the world’s factory in 1990s. The processing industry, especially the brand-processing industry, was in the ascendant and acquired many orders from around the world. However, false businesses emerged quickly at the same time, resulting in serious counterfeiting and piracy in the Asian market due to the underdevelopment of IP law enforcement. Consequently, there was an urgent need for international IP service for many transnational businesses. Therefore, Rouse decided to set up its first office in China on its road map into the Asian market.” There was just a little awareness for IP protection and extremely unsatisfactory IP law enforcement in China when Rouse embarked on China’s market, though China had promulgated many IP laws and regulations relating to trademark, patent, copyright and unfair competition.
Rouse has achieved a rapid development in the decade since China’s accession to WTO because of China’s economic growth and an all-round IP protection improvement. From then on, Rouse has done business for 18 years in China. Time has witnessed a great improvement in IP protection, and IP judicial protection in particular in China during the past decade. The public should know something about circumstances under which Rouse became a constructive player in China’s IP market. What is its development program in the future? How does it think about China’s IP development in the past decade? What expectation does it have for the future? Bearing these questions in mind, China IP conducted an exclusive interview with Ms. Linda Chang, Rouse’s China Country Manager.
Rouse’s initial development in China
China IP: What’s your impression of the IP protection situation and obligee’s awareness in 1993 when Rouse set up its office for the first time in China? And what was Rouse’s main business at that time?
LC (Linda Chang): As I recall, there were only a few people knew what IP was at that time. The agency for registered trademarks was monopolized and limited to the trademark application, whereas few IP protection cases were heard. The infringers and counterfeiters did nothing but open and simply copy without knowing that they were in violation of the law. Therefore, it was easy to investigate their primary infringement. And Rouse’s business type is so simple that all it did was to provide the administrative law enforcement organs with infringement information through the investigation of its agencies in the locality. At that time, there were few transnational IP consulting institutes in China. We took the lead in introducing the advanced experience of the United Kingdom to China, including the ways of thinking and communication. These advantages were attractive for talents who wanted to do their professional business in Rouse.
China IP: You joined Rouse in 1999. Can you tell us what kind of changes took place in 1999 in comparison with that in 1993?
LC: Infringers became more experienced after a long period of investigation and redress. They did infringement secretly and accumulated tricks in the face of the investigation of administration for industry and commerce. The investigations had become somewhat difficult and the administrative punishment had not been sufficient during that period. Therefore, it was very common that there were many offenders who repeatedly infringed. When I came to Rouse, it was recruiting all kinds of IP talents, and began to provide clients with consulting services in addition to the basic advice against copy and piracy it had been providing, including the grant of rights and IP license.
China’s market after its access to WTO
China IP: You were appointed as one of the executive directors of Rouse at the beginning of 2004, three years after China’s accession to WTO. How would you comment on the changes in China’s IP protection during that period?
LC: At that time, China amended many IP-related laws and regulations, including the Patent Law, Copyright Law, Trademark Law, and etc., in order to meet WTO’s requirements. Many serious infringements were defined as crimes. It was truly a great progress.
China IP: China has been a WTO member for 10 years since 2001. Was the decade a period of rapid development of Rouse in China?
LC: Yes. Time had witnessed our transformation from a single service provider to an all-round business in China. There were a few dozen staff in Rouse 10 years ago and there are 200 professionals at present. We provide IP civil lawsuits with professional service from zero in 1993 to more than 400 cases at present.
China IP: As an executive officer in international consulting institute, how would you comment on the progress made by China in IP protection, such as the formulation and enforcement of laws and regulations and enterprises’ awareness of IP development and protection in the past decade?
LC: There was no domestic company with IP rights 20 years ago, with the exception of a few time-honored brands. I remembered I had half-jokingly said that “there are no IP rights for the poor.” Fortunately, more and more China’s companies have increasingly focused on the development of intangible assets due to China’s economic growth, the influence of internationalization and the encouragement of a national IP strategy. When the companies began to attach importance to product quality and to safeguard their brand reputations, when consumers began to go shopping according to brand, when a company’s products were imitated by its counterparts in the same industry, it is safe to say that intangible assets had been set up. And that is a very good trend.
Changes in IP consulting service industry in the past decade
China IP: During this period we have seen the emergence and development of many Chinese IP consulting service institutes in the past decade. Did Rouse feel intensive competition from its Chinese counterparts during this period? And what do you think about changes in the industry in the past 10 years?
LC: We have met with obvious competitive pressures in some areas, such as the investigation and administrative redress. Some smaller firms have sprouted up and specialized in investigations and administrative redress because of their relatively simple attributes and low market access threshold. However, they are mostly the low-end services and have very little negative influence on us. The reason behind Rouse’s success is that the company always walks in front of its competitors; that is, we have what others do not have and ours is of better quality than that of others. China’s development in the past decade has welcomed more international IP firms to its market, resulting in some differences in competition. Rouse has some ideas regarding IP protection strategy which are not enjoyed by its Chinese counterparts; in addition, Rouse has more experience, realistic style and a competitive service price suitable to China’s market in comparison with international IP firms.
China IP: In the past decade there has been progress in the IP industry with China’s economic rapid development. Have some changes taken place in Rouse’s business consequently?
LC: Yes. In the past decade, the number of IP civil cases handled by Rouse has significantly increased, both in terms of quality and quantity. It can be seen as a transformation of China’s obligees’ conscience from pure administrative remedies to the exploitation of more complicated judicial procedure in order to seek judicial damages and other more deterrent remedies.
Rouse’s development in the past decade
China IP: As Rouse’s executive officer, in your opinion, what is most important for a manager in the successful management and operation of an IP consulting institute?
LC: The first is leadership, which requires you to make directional decisions at critical stages of your firm’s development. The second is corporate culture, which determines the spiritual realm and loyalty of your staff.
China IP: You just mentioned Rouse’s business transformation in recent years, from focusing on investigation to management of civil cases. Can you tell us the most typical cases among them?
LC: The most influential case in early period was the “Peter Rabbit” trademark infringement, which was well-known to the industry. This case was characterized by the fact that it went through all the judicial procedures, including non-infringement actions. Its central issue was whether the copyright holder had the right to apply his copyright work for a registered trademark after expiration of copyright protection. The court said yes to the right holder. Another typical case was IFPI v. Its judgment of last resort ruled that Yahoo’s acts constituted infringement because of its deliberate service for illegal downloading of  plaintiff ’s works protected by copyright law. It was worth mentioning that there was a completely different court decree in the case of IFPI v.
China IP: What’s the reason of different verdicts between similar cases?
LC: The major reason was that IFPI’s lawyers took different strategies in similar cases. It is natural that you will find it very difficult to win your case if you focus your argument on technical issues beyond your comprehension.
China IP: There has been a fundamental change of China’s enterprises’ awareness in the protection of IP rights in the past decade. Some of them have gone overseas to do business and have had a very good performance in IP protection. Has Rouse ever planned to turn its focus from international customers to Chinese enterprises?
LC: We have a number of domestic customers, and we want to have the honor to provide more prestigious Chinese enterprises with professional service as well.
Looking forward to a better environment
China IP: Rouse has set up offices in Beijing, Shanghai, Guangzhou and hong Kong and has been involved in many IP cases. What have you learned from so many years of successfully handling IP cases in China?
LC: We have learned a lot! We are very glad to see that there have emerged a group of talented judges in IP rights trial in Beijing, Shanghai, and Guangzhou in recent years. They have heard some very good cases. But in other areas, some judges are in dire need of IP education. And some of the language in their rulings is not very professional. In terms of IP administrative law enforcement, there are areas, such as Fujian, Zhejiang, Shenzhen, which are notorious for their serious local protectionism, equivocation and procrastination. Public security organs in some areas ask for handling fees in public in criminal cases. This corruption has existed for a long time in the field of IP law enforcement and has never been corrected by their higher authorities. I believe that they will be reported in public more frequently and freely in the coming five years. The United Kingdom and the United States are now making unprecedented efforts to implement their anti-corruption laws. All the bribery conducted by the overseas agents of their enterprises shall be deemed as the bribery of the principals and shall be investigated and serious punishment will be imposed. This will inevitably lead to multiple incidents of public exposure of the corruption if China’s law enforcement agency is involved.
China IP: What will Rouse do in the face of corruption?
LC: More than 90% of Rouse’s clients are from the U.K. and U.S. They have very strict disciplines in this regard. They would rather receive the negative consequences from administrative omission than bribery. And all business shall be discarded if there are any violation of anti-corruption rules. Rouse sets up a “compliance officer”; a special position at its headquarters in London, in charge of supervision and guidance of its global branch’s compliance practice. In this regard, Rouse has not only won the trust of its customers, but also taken the lead in the competition with its counterparts across the world.
China IP: With the development of IPR protection in China, what do you think is the most effective way to safeguard IP rights?
LC: You must bear an all-round view in your mind when safeguarding IP rights in China. You should spend your limited budget on where the blade cuts deepest. You should know where the key is, and then focus on key areas and targets. You should take effective measures according to specific targets. All appropriate measures may be used, consequently or simultaneously. In the end the extent of IP safeguard should never be judged by the number of cases.
Rouse’s vista
China IP: What is Rouse’s development program for the next few years?
LC: We hope to handle more IP tort actions of great significance in the next five years in order to safeguard our image with consistent honor & high quality in terms of IP service.
China IP: There is still some room for China to improve its IP protection, even though it has made remarkable progress in the past decade. What should be improved in the future in your opinion?
LC: More attentions should be paid to the details in legislation, to the deviation between law enforcement and provisions of laws, and to the transformation of IP protection from the current process of sporadic crackdowns to the implementation of a more consistent day-to-day strict enforcement policy.
China IP: There is still some room for China to improve its IP protection, even though it has made remarkable progress in the past decade. What should be improved in the future in your opinion?
LC: More attentions should be paid to the details in legislation, to the deviation between law enforcement and provisions of laws, and to the transformation of IP protection from the current process of sporadic crackdowns to the implementation of a more consistent day-to-day strict enforcement policy.
(Translated by Ruan Renhui)

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