China: Napoleonic Warfare And IP Protection In China

Last Updated: 11 March 2015
Article by Paolo Beconcini

What do Napoleonic warfare and IP protection in China have to do with each other? Answer: More than you can imagine.

Let's start imagine indeed: you are a general of the Napoleonic era in command of a veterans' division. You know your troops are of good quality. They have fought before. They have been issued the best weapons available and are fairly motivated and in good spirit for the campaign ahead. You have been ordered to occupy a certain position ahead in enemy territory. From the staff at Army HQ you have receive reassurance that there may be but little enemy activities ahead. What worries you is also the fact that you have not been made part of the overall campaign plan. What you know goes as far as your eyes can see. Eventually, you have but a general sketch of the Army's position once you will reach your destination. Meanwhile, you have studied the available maps of this hostile country, have heard reports from locals about the land ahead and the presence of enemy forces. You know there are risks, but you are confident that your division will be able to fend off any threat and reach its destination as ordered. Early in the morning you issue the marching order. Cautiously you distribute your forces in formations ready for sudden deployment in case of a contact with enemy troops. Squadrons of light dragoons are deployed on your flanks to search for enemy positions ahead, while a line of infantry skirmishers is deployed to screen off your troop's main body. All seem in order and you are confident of your own strength. The morning of the march is however gray and a thick fog lies over the unknown fields and woods. The ground is marshy and your artillery train bogs down immediately while soldier's boots fill with murky water making their go unpleasant.

After a couple of hours of marching, reports from different regiments and battalions start coming in. You learn that the terrain ahead is such that some of the units on the far right flank detach and lose contact with your troop's main body. The fog confuses the troop's movement and some of the battalions in the center moved into some thick woods and lost cohesion. You had not seen those large woods marked on your maps. Also, the map did not tell you that the main highway where the artillery train was supposed to ride is actually a thin countryside trail interspersed with jagged rocks. Wheel and spikes give way and slow down the progress of many units. Suddenly, to your consternation skirmishers report that there is a stream in front of your marching lines and that also was not marked in your maps. Scouts inform you and your staff that the stream is actually very small and fordable in several points but the embankment on your side is very steep. The muddy condition makes it difficult for loaded troops to get down to the shore in good order and it will be a challenge for both cavalry and artillery to get down on the bank. Also, given the seasonal rains, the stream current is rather strong. All will have to ford it with water ankle high!

It takes hours to have most of your units across. It is also confirmed that on your right flank the confusion of the morning had resulted in the delayed march of some battalions. The fog hangs still and thick even in the early afternoon and the terrain ahead cannot be made out but with difficulty. Now with a small river and a high embankment on your back and an unknown country ahead your units resume the march. Meanwhile your worries about possible enemy activities increase. Small skirmishes break out on your left flank. For hours you have no news of one of the squadrons of your light dragoon on the left flank and this increase your worries of increasing enemy presence in that position. You send out a reinforced scouting unit on your left. After a while the exchange of fire on that side of the field intensifies. Reports of an enemy concentration on the left flank forces you to shift part of your center on that side and you bring about artillery to support your infantry advance. Suddenly you find yourself engaged by the enemy, whose forces you cannot estimate and on an unknown terrain. You start feeling frustrated and increasingly worried. It is at that time that disaster strikes. Reports of musketry are clearly heard from the right flank as well. Artillery fire opens against your right flank. At this point in time you have neither idea of the terrain in front of you, nor of the strength and position of your enemy. Also, you have not been informed of the overall general strategy of this campaign by your supreme commander and you have therefore no general guidance as to whether you should engage the enemy and under which circumstances. Should a retreat behind the stream a better course? Should you scout all flanks to determine where the bulk of the enemy forces are? We stop here. We do not need to know what you as a general would do in such case. The critical point is that at the outset of the march your general had very little information about the opponent and the terrain. This alone causes a crisis and delays an effective response. Most of all, the general loses the initiative! He can only react. All this is eventually made worse by the fact that he has no indications about his general strategy should be. Can he retreat to a better position or accept engagement with the enemy under uncertain conditions? What can he do to better his knowledge and take effective decisions? How can he gain again initiative and lead the battle to a desirable conclusion?

In sum, as a leader you are here presented with three challenges: what is your strategy? How strong is the enemy? What are the relevant features of the battlefield and which re favorable and which unfavorable relative to my position and strengths/weaknesses?

Now with a little effort of your imagination, transport this battle scene to today's time in China. Instead of you being a Napoleonic era's general, you are the CEO or the GM or the IP counsel/general counsel of a European or American company. Among your tasks is that of protecting, managing and exploiting the company's IP assets. Even if the time, the context and the scenarios are completely different (peacetime, business disputes, IP rights, legal procedures and rule of law), you can still draw lessons from the past military history that could well serve you in the more peaceful IP battles in today's China. It is in fact possible to see that the same questions and challenges faced by that antique general are the same as yours from a conceptual point of view. Why then not learning something from them?

You run or have supervision over the IP portfolio of a solid western company. You have a strong team of experienced patent and trademark attorneys who know the up and downs of China IP at least in great lines. Meanwhile you have been informed that there is a competitor infringing a trademark or a patent of your company. You check your patent and trademark rights. They seem in order. You are familiar with their prosecution history and know possible weaknesses but are also aware of their strength and are ready to deploy such strength against any treat of infringement in the best interest of the company. You are now informed that a Chinese company has started selling a copy of your patented solution in China or a copy of your product and trademark both in China and abroad. Your in-house staff from Shanghai or Beijing or wherever it may be located in China, starts feeding you with some information. All is rather generic and no much intelligence can be taken from it. However, you now got a target and a product of the alleged infringer purchased in China and tested at your HQ. From your glass tower in the western hemisphere you start contacting your Chinese counsel. He is normally your filing agent. He will feed you with some general information about enforcement, damage recovery, costs etc. The latter will be of course one of the major considerations when deciding enforcement. In the best of cases, your evidence collection may even bring in some interesting intelligence. Your Chinese lawyer will confirm the infringement based on the legal standards of infringement examination in China and you will now face the momentous decision. Considering that the infringed patent or trademark is indeed a key asset for your company, and that aside from that actual infringer others are or may be doing the same, you decide to enforce by filing a lawsuit. Your troops are ready, you think you have identified the infringer and have prepared your weapons for attack. You even feel that you indeed move comfortably well in China. You had expected so much more differences between the legal systems of China and your country. The preparation phase was also not as complicated as you had expected. Also, it took but a couple of months to prepare all was thought to be needed. You think you have enough knowledge now of the enemy and the battlefield to go. And so you go. Like in the military example described above, the risks of litigation in China, as on the real battlefield, are mostly hidden. Few months' preparation of IP enforcement in China is often insufficient to really discover the traps and tricks hidden behind the case façade. Knowledge of the law is useful but it is not enough to help you prepare a winning strategy if you do not know how this law is interpreted and applied. More than the law, you should have studied the ways of infringers in China, past battles and others' defeats and learn from them. Another problem, and in the author's experience, the most critical one, is that your decision to act is based on the sudden infringement and all your preparations and operations are focused on the infringement itself. What about a master-plan? What are your final goals? Is the lawsuit as it has been conceived and prepared suitable to achieve those goals? Have all possible parties been included as defendants? Have you considered that they may escape liability even in case of a favorable judgment?

If there is an infringement of a key patent or trademark the right holder should first set a strategic goal or goals before going down to detailed planning. In conclusion, a general counsel or an IP counsel or the business owner of a foreign company should not act as a Napoleonic general on a battlefield, but as Napoleon himself. His task is not just to win a patent or trademark battle but a patent or trademark campaign, where a specific battle is but an aspect of the whole issue. In sum, the most critical moment, the defining point of a patent and trademark enforcement strategy in China is the goal setting. This will set the standard to define success or defeat when the battles come to be fought.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Paolo Beconcini
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