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When Su Xiaoxi joined the fledgling Qingdao Refrigerator Co. fresh out of university in 1988, the enterprise was only four years into its attempt to transform a dilapidated state-run factory famous for shoddy workmanship into China's leading maker of quality home appliances. China's economy was in the early stages of opening to the West, so Qingdao's managers looked abroad for help. A few years earlier, the company had signed a technology licensing agreement with Germany's Liebherr Group, a major European appliance maker better known in the United States for its line of cranes and other heavy construction equipment.

But the deal required something of an intellectual great leap, Su recalls. "When we introduced the technologies from the German company, we had to pay it royalties," Su says. "At the time, most Chinese companies couldn't imagine paying money for something you could not see, that was invisible. But even then, we had this awareness of the value of intellectual property rights."

That awareness has stayed with the company, now known as Haier (pronounced "higher") Group. While many other Chinese companies have prospered as low-cost manufacturing contractors to multinational corporations that own both the patents and brands of the finished products, Haier has chosen to compete head-to-head with multinationals on both fronts. Its magenta-and-white logo is already ubiquitous in China and increasingly common in the United States, where Haier has a factory in South Carolina and where its refrigerators, washing machines and air conditioners are sold at Wal-Mart, Best Buy, Target and other leading retailers. Though the image of Chinese-made products has taken a beating in the last year, due to several safety recalls, international marketing experts polled by Interbrand, a consulting firm, still expect a handful of Chinese firms to emerge as top global brands in the next five to ten years -- firms like Haier.

Haier banners line the road to the company's campuslike headquarters on the outskirts of Qingdao, a coastal city 500 miles east of Beijing. (Qingdao will host sailing events for the 2008 Olympics.) Meeting with a reporter in the main office building of the sprawling complex, Su, the company's vice president and general manager of the legal affairs department, explains through an interpreter that Haier, already the fourth-largest maker of major appliances in the world, with over $14 billion in sales, aims to become as well-known and respected a brand as Samsung or General Electric.

As Haier's top lawyer, Su, 41, will play a key role in those ambitions. But he is not your typical general counsel. Indeed, though he has headed Haier's legal department since 1998, he was not even a lawyer until quite recently, having earned his undergraduate degree in Chinese language and literature. He finally acquired a law degree in 2005 from Xi'an Jiaotong University after studying evenings for three years, working full-time during the day as Haier's effective GC.

Haier's growing legal sophistication has developed organically. Su first joined Haier as a research staffer in the office of Zhang Ruimin, the company's then president and current CEO. At that time, Su recalls, the company felt that it faced few pressing legal issues. Its technology came from its rock-solid licensing agreement with Liebherr, and it had straightforward and favorable arrangements with both retailers, who paid in advance for merchandise, and suppliers, who were paid only after delivering their goods to Haier.

That all changed in the 1990s, when the deal with Liebherr expired and CEO Zhang decided to forge ahead with his vision of turning Haier into a global brand. The company began to do its own research and development, and its chain of suppliers and retailers, previously entirely domestic, began to include a large number of foreign companies.

To meet the new legal needs, Su decided that he had to study law himself. He was interested in the subject, but finding time to hit the books proved a struggle. Along with his full-time job, Su had a wife and young daughter by the time he began course work at Xi'an Jiaotong's Qingdao graduate school. "It was a very hard time," he recalls. "Every day I would leave the office at around 7:30, start studying at 8, and keep going until after midnight."

Even with his degree, Su could not handle all of Haier's new legal needs. Haier's legal department has grown from a staff of just four people in 1998 to more than 40 lawyers and patent agents today. The department is notably young, with many staffers recruited directly out of university.

IP concerns occupy much of the legal department's time. The company continues to license foreign technologies from companies like Cisco Systems Inc., Intel Corp., and Samsung Group for many products, especially new offerings like televisions, laptops and mobile phones, but it also now operates nine research and development facilities around the world and holds 8,100 patents. The proportion of those patents that relate to invention rather than design or utility, a lower category of patent requiring few submissions in China, has grown over the years, says Su, and these invention patents now account for half of new patents each year. The company's Qingdao-based lawyers have also filed hundreds of patents in the U.S., the European Union, Japan and South Korea.

Given Haier's focus on branding, trademark protection is key. The company has registered its trademark in China in 45 product categories. It is also registered in 16 product categories in 183 other countries, including the U.S. As its brand has grown in popularity, Haier has had the rare distinction of being one of the few domestic companies targeted by China's notorious counterfeiters. Su notes that U.S. customs agents recently seized a shipment of fake Haier DVD players. The company has encountered products bearing names like "New Haier" and "Shandong Haier."

The company's growth overseas has brought Su into contact with many of his peers at multinationals, including the GCs at Hewlett-Packard Co., IBM, Cisco and Sanyo Electric Co. He says he often seizes the opportunity during business dealings to chat with his foreign counterparts and learn more about how they run their legal departments.

"Each company is different, and each lawyer faces different problems," he says. "But the main topic is generally how to be a good general counsel."

A version of this story ran in IP Law & Business, a sibling publication of Corporate Counsel.

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