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The Law Society of Hong Kong
香港律師會
Intellectual Property: Business
Opportunities and Changes for
Hong Kong Professionals
Michael Lintern-Smith
President, The Law Society of Hong Kong
24 November 2004
1
Recent Development
CEPA in 2003; CEPA II in August 2004
Preferential market access treatment
Pan-PRD Regional Co-operation and
Development
Barrier-free economic zone
2
Market Access Under CEPA –
Legal Services
Operate in association with Mainland law firms
Employed by Mainland law firms
Acquire Mainland legal professional qualification
Intern & practise on non-litigation legal work in
the Mainland
Minimum residency requirement waived/
shortened
No permit needed for providing assistance on
individual cases
3
Market Access Under CEPA –
Legal Services (2)
Comparison of representative offices of Hong Kong law
firms before and after the implementation of CEPA
No. of
Representative
Offices of HK Law
Firms
As at
31/12/2003
As at
3/7/2004
No. of new
representative
offices after
1/1/2004
Guangdong/ PRD
12
15
3
Beijing
19
19
0
Shanghai
15
16
1
2
4
2
48
54
6
Others
Total
4
Market Access Under CEPA –
Trade Mark Agency Services
Hong Kong service supplier (HKSS) may conduct
trade mark agency business in the Mainland
HKSS Certificate:
A natural person/ a juridical person
Engage in substantive business operation for > 3 years
Pay Hong Kong profits tax
Maintain business premises in Hong Kong
50% employees are Hong Kong residents
5
Market Access Under CEPA –
Patent Agency Services
Hong Kong permanent residents
Chinese citizenship
Patent Agent Qualification Certificate
Practise patent agencies established
with permission in the Mainland
Become partners/ shareholders
6
Market Access Under CEPA –
Patent Agency Services (2)
Liberalisation of Patent Services
Equal basis as Chinese citizens
Expand the list of Mainland recognized
universities
Training course organized by IPD
Allow to write the examination
Requirement of Apprenticeship
Become partners/ shareholders
7
Reality Check
Separate professions:
Legal
Trade Mark Agency
Patent Agent
Varying opportunities / limitations to
access the Mainland market
8
Reality Check (2)
Market accessibility: partial
Justified restriction
Overly restrictive
Write qualification
examinations
Post-qualification
employment
Discourage HK
residents to acquire
the qualification
9
Reality Check (3)
Market of Trade Mark Agency
30,000 trade mark applications/ month
4,000-5,000 existing agents
US$225-425 of fee income/ application
Yearly income: US$1,350-3,187
Strategies – Profitable business
10
Meeting The Challenge
CEPA & Pan-PRD Regional
Co-operation & Development
Big booster to HK economy
Market liberalisation: controlled pace
Position ourselves to exploit the opportunity
How to further the co-operation
Maximize the benefits for both sides
11
Meeting The Challenge –
Continuing the dialogue
CEPA
Not a one-off agreement
Set out framework for consultation
Goal: liberalising the Mainland market
HK professionals
Feed concerns to HKSAR government
Exchange ideas (e.g. Forum/ Workshop)
Work out practical, achievable suggestion
12
Meeting The Challenge –
Wider Perspective
Free of import tariff
Hong Kong products
Substantially transformed in Hong Kong
>30% of the value is added in HK
Encourage foreign companies
To set up operations in HK
To outsource processes to HK companies
More opportunities for HK IP professionals
IP elements in R&D/ design
Legal aspects of outsourcing & licensing
Company formation
Tenancy/ Employment
13
Meeting The Challenge –
Wider Perspective (2)
Example I: Chinese language motion pictures
Import to the Mainland – quotation free basis
Jointly-produced by HK & the Mainland –
“Mainland” motion pictures
Increased business opportunities for
IP professionals
Joint ventures/ copyrights/ film distribution
14
Meeting The Challenge –
Wider Perspective (3)
Example II: Communications services sector
HK service suppliers – set up joint venture
enterprises
Provide value-added telecommunications
services
Increased business opportunities for IP
professionals
Technology transfer/ branding/ co-branding/
licensing/ joint ventures
15
Meeting The Challenge –
Wider Perspective (4)
CEPA – Preferential treatment
Over 700 product categories
26 service sectors
IP opportunities arise from increased trade
Brand is essential in marketing
Need for IP protection, enforcement &
commercialisation
16
Meeting The Challenge –
IP Protection
Past: Inadequate awareness of IP protection
Present: Economy progresses
IP becomes a competitive edge
Identify products
Protect investment
Realise profits
17
Meeting The Challenge –
IP Protection (2)
IPD – Raise awareness about IP
Law Society – supply speakers at the following seminars
organized by the IPD:-
Date
Event
Held
02/2003
Seminar on IP & the Development of SMEs
Hong Kong
03/2003
Seminar on Guangzhou and Hong Kong IP Services
Guangzhou
06/2003
Seminar on IP for Design Professionals
Hong Kong
09/2003
Seminar on IP and the Development of SMEs
Shenzhen
05/2004
Seminar on IP and the Development of SMEs
Dongguan
11/2004
Seminar on IP and the Development of SMEs
Shaoguan
12/2004
Seminar on IP and the Development of SMEs
Shunde
18
Meeting The Challenge –
IP Protection (3)
Law Society’s participation
Supported TDC’s Roadshows & exhibition
11 trips to Mainland in past 1 year
Delegations to Beijing, Shanghai, Chongqing,
Guangzhou, Jilin, Tianjin & Zhejiang
Held exhibitions on HK legal services
More participation in the future
19
Meeting The Challenge –
Mainland Representative Office
More law firms consider establish
representative offices in the Mainland
Contributing factors
CEPA – to associate with Mainland firms
Reduction of the requirement of residency
20
Meeting The Challenge –
Mainland Representative Office (2)
Condition to apply to the Ministry of Justice of China for approval
Lawful practice in Hong Kong
Representative of the office shall be
Practicing lawyer
A member of Law Society
Practicing >2 yrs outside the Mainland
No record of criminal offence/ professional/ misconduct
Chief Representative of the office shall be
Practicing >3 yrs outside the Mainland
A partner in the law firm
Genuine need
21
Meeting The Challenge – Collaboration
with Mainland Lawyers & Agents
Serving Mainland clients through referrals
Benefit from closer co-operation with Mainland
companies
Role of the Law Society
Develop contacts with provincial lawyers associations
Facilitate exchange of information
Develop opportunities for training
Example: Jiangsu Lawyers
22
Meeting The Challenge –
Recruitment and Training Strategies
Recruitment Strategy
Chinese language ability
Science/ engineering background
Minimum requirement for establishing a
patent agency
Partnership: 3 qualified patent agents
Company: 5 qualified patent agents
Partner/ shareholder: no non-qualified people
23
Meeting The Challenge –
Recruitment and Training Strategies (2)
Training Strategy
LL.B / LL.M Programmes provided by universities
in the Mainland
China Law Seminars organized by the Law Society
- Seminar in Shenzhen
- Accredited courses on PRC
24
Conclusion
CEPA & Pan-PRD development –
business opportunities
IP professionals – understand the new
environment
Importance of idea exchange
Role of the HKSAR Government
Role of the Law Society
25