Changing China

Call it fear of the unknown—or maybe just a general wariness of foreign legal systems—but the Chinese courts have a bad reputation among American corporations. The conventional wisdom is that it’s nearly impossible to protect your patents and intellectual property there. But businesses and lawyers are starting to change their opinion.

Before 2001, Tony Zeuli and Tong Wu, attorneys at Minneapolis law firm Merchant & Gould, had never worked on a case in China. But a local client started seeing copies of its wares in Asia, and Zeuli and Wu had to quickly learn the ways of the Chinese legal system. Twin Cities Business talked to the attorneys about their research, interaction with Chinese officials, and what surprised them the most.

"Everything that could have gone wrong went wrong, and yet it was still very successful in the end."

{Twin Cities Business} Tell us a little about the case.

{Tony Zeuli} A large client here in the Twin Cities came to us in spring 2001. They had discovered that a company in China was directly copying a successful product of theirs. The client had a Chinese affiliate, and the people there were seeing the copied product around China. So they asked if there was anything we could do.

{TCB} You were able to bring legal action in China for the infringement?

{Zeuli} Yes, we had already obtained a patent in China for the client on this particular product.

The client wanted the suit to be filed in July. That wasn’t very much time, but at least the analysis looked clear-cut. The product was clearly a knockoff; it darn near had the company’s logo on it.

The first thing we had to do was make sure that the product was covered by the patent we had obtained. We got photographs of the defendant’s copy of the product, and we got a copy of the Chinese patent, which we had translated by the Chinese law firm that we had used to get the patent. It looked good. But thankfully, somebody here grabbed Tong and said, ‘Hey, would you just mind taking a look to make sure the translation is accurate?’ It turns out it wasn’t accurate.

{Tong Wu} I grew up in China, so I speak and read Mandarin. I saw a problem that had to do with a nuance in translation. There was a part of the product that was movable in a way that the English-language patent described as ‘back and forth.’ But it was translated as ‘up and down.’ In English, ‘up and down’ can be used in that way, as in ‘up and down the road.’ But in Chinese, the phrase ‘up and down’ doesn’t have as broad a meaning.

{Zeuli} That was troubling, because in these patent cases, the words are so darned important. There’s little room for inexactitude. But the [Chinese] law firm that we had worked with said they didn’t think it was a problem. That was when we decided to hire more of a litigation-oriented law firm as our Chinese counsel.