Recently, Kangxin took an interview with Leaders League.
Last year, Kangxin Partners celebrated the twentieth anniversary of its founding. Within two decades it has grown into a leading intellectual property firm in China with a staff of 350 and an enviable client portfolio including: Boeing, Facebook, Hyundai, Samsung, Sony, Prada, Armani, Carrefour and Dior. Recently rewarded as the Best Chinese IP Firm at the 2015 International Legal Alliance Summit & Awards, Kangxin Partners once again proved its outstanding performance. How did the firm make it? Hints from Managing Partner Samson G. Yu, and Head of Trademark, Gloria Q. Wu.
Leaders League. Can you give us a few words about Kangxin Partners?
Samson G. Yu. Established in 1994, Kangxin is the first privately-owned Chinese IP firm. In our early stages, patent prosecution represented 70% of our work and most of our clients were international companies. Today, we have extended to all aspects of IP work and 60% of our clients on the patent side are domestic. In 2014, we were ranked No. 2 in China and No. 5 in the world in terms of PCT applications.
In terms of organization, on the patent side, we have a total staff of 250 – including patent attorneys, engineers and professionals on procedures – composing two patent departments that serve international and domestic clients, respectively. On the trademark side, we have 20 trademark attorneys and 20 paralegals. We also have a law firm specialized in IP enforcement and litigation composed of 25 to 30 attorneys, paralegals and in-house investigators.
Moreover, we have a new yet booming practice of IP strategy and analysis, which offers services such as patent analysis, general strategy of IP and IP transaction.
Leaders League. What practice keeps the firm growing the most?
Samson G. Yu. IP litigation is an important part of our practice and has been growing for 5 to 6 years now, especially in copyright and trademark. It’s more difficult for patent litigation, as Chinese companies are still learning the game. We certainly aspire to grow our litigation practice, but it is a tough and very competitive business, so we plan to develop it steadily, and small victories will eventually become big victories!
As for the overall strategy to grow the firm, we will focus on our current clients and extend our services for them to encompass the whole value chain, from prosecution to litigation to licensing. Price war is not in our interest and we wish to convince our clients of the value of our work. For this purpose, we have set up an IP strategy and consultancy firm to target corporate top level officers (CEOs and VPs), with the objective of gaining more IP prosecution work from them if they are satisfied with our consultancy work.
Leaders League. What is your strategy of geographic expansion?
Samson G. Yu. Headquartered in Beijing, we have offices in the US, Germany and Japan. In China, we have an office in Xi’an with 20 patent and trademark attorneys, where we are focused on domestic and inbound work, as Xi’an has several big technology-focused universities that can provide us with local skills. For the moment, we don’t plan to open any new offices, because we prefer to concentrate on our current business flow and quality control.
Gloria Q. Wu. We don’t intend to compete with local firms or engage ourselves in a price war. Instead, we prefer to develop good relationships with local firms and work together with them. For instance, each year during our "Kangxin Open Day," we invite other firms to our Beijing office and share our experience and know-how with them.
Leaders League. How are you different from other Chinese IP firms?
Samson G. Yu. Our flat organizational structure is very unique. Law firms are normally based on a partnership structure whereby a partner has several associates, but it is hard to share resources among partners; companies, on the other hand, have hierarchical structures that don’t encourage horizontal exchanges, making it hard to have quick responses to clients. We have the advantages of both structures: we have trademark and patent departments that carry out daily work, and on top of them management committees that make important decisions such as operations or budgeting. This structure increases the speed of decision-making and renders the decisions focus on around the clients’ needs. Moreover, we have been dedicated to increasing our efficiency by upgrading our IT system, and we therefore see ourselves as an IP & IT firm.
Gloria Q. Wu. We also have a very good training system, as we believe that business management is different from IP prosecution and that it’s important to master the knowledge of management. Each semester our management team will have a workshop for two days during which we will read and discuss some books or articles related to management, and share our ideas and opinions in relation to management issues in the firm. Sometimes, we also invite external institutions to carry out different training programs in management specifically designed for the different levels of our staff. One good example would be our training in PMP (Project Management Professional): many cases can be treated as a project, from planning, allocating resources to controlling rates, so it is important for our partners and team leaders to know project management.
Leaders League. Europe is moving to a Unitary Patent system and a Unified Patent Court with divisions in Paris, London and Munich. How do your firm and clients perceive this change?
Samson G. Yu. We hold regular conferences to share such kinds of information with our clients, and their feedback regarding this news is very positive. This move will make it much easier for Chinese companies to enter into Europe without much investment in PCT in many jurisdictions, so I think it will encourage more Chinese companies to come to Europe.
Leaders League. What are the recent IP trends in China?
Samson G. Yu. In the near future, Patent Law will be amended and many amendments concern the enforcement of patent rights in favor of right holders. The upper limit of statutory damage in the case of willful infringement might be raised, and local IP offices would be given powerful measures against patent infringement, despite the opposition of many Chinese and international companies on certain changes. I think the government is determined to encourage Chinese companies to innovate.
Gloria Q. Wu. On the trademark side, a new Trademark Law was promulgated last year, and a few new decisions have been made based on the law. It’s encouraging to see some progress, although the formality of paperwork still needs improvement.
Samson G. Yu. Another big move is the creation of new IP courts with specialized IP judges in Beijing, Shanghai and Guangzhou. Some good decisions have been made with a large amount of damages granted, so it is very encouraging to right owners, especially to some European companies who believe that IP enforcement is impossible in China. The courts actually opened this year, so it is still too early to evaluate or compare their efficiency with other courts, but hopefully more efficient and effective decisions will be made.
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