Kilpatrick Opens Shanghai Office

Meredith Hobbs

Daily Report

10-29-2012

Kilpatrick Townsend & Stockton has opened a Shanghai outpost centered on intellectual property work to bolster its Asia presence.

The firm opened an office in Taipei, Taiwan, in January 2011, coinciding with the merger of Atlanta's Kilpatrick Stockton and San Francisco IP firm Townsend, Townsend & Crews. The Townsend firm already had an office in Tokyo.

"This is our first step into China, which we are extremely excited about," said Paul Aguggia, Kilpatrick's chairman.

Aguggia said the office would initially play to the firm's strength in intellectual property -- both patent procurement and litigation -- with the idea of expanding into corporate work such as joint ventures.

"The needs in China match our practice," he said. "The opportunities in China and Asia are vast."

Two lawyers from Kilpatrick's Denver office have moved to Shanghai to run the office. Kenneth Chang, an IP litigator who became the head of Townsend's Asia practice five years ago, is the managing partner. He is joined by associate Charles Gray, also from Denver.

Chang said Kilpatrick started planning a Shanghai office after the dust settled from the merger. "This is something we've been wanting to do for quite some time," he said.

The firm has operated in China for 20 years, but Chinese clients were requesting an office, he said -- and an opportunity to locate in the Zhangjiang High-Tech Park provided the needed impetus. The government-owned development zone, which has been called China's Silicon Valley, spans 25 square kilometers and houses about 2,000 high-tech companies.

"The opportunity to take space in the science park was something we couldn't pass up," Chang said. "From my office window, I'm looking at 30 different high-tech companies."

Kilpatrick received its license for the office from the Chinese government a week and a half ago, Chang said. The approval process is lengthy and complex; it takes six to nine months to get the needed approvals from the Chinese Ministry of Justice, he said, as well as from other ministries and the city of Shanghai.

Chang said Kilpatrick decided on Shanghai instead of Beijing, where many U.S. firms open offices, because the majority of the firm's China clients are there. He takes a high-speed train to see clients in Beijing, 4 1/2 hours away.

Chang said the firm's Chinese clients are mostly electronics and semiconductor manufacturers. They also include medical device companies that are starting to sell their products outside of China. Kilpatrick handles their IP prosecution and litigation in the United States.

"As more Chinese companies move beyond the domestic market and start to sell in the U.S., they are becoming subject to a lot more litigation," Chang said.

"At the same time, a lot of U.S. companies are moving not just their manufacturing to China -- which is starting to get a little expensive -- but also their research and development. They like to have their U.S. patent attorneys on the ground in China to speak to their inventors and technology people."

One Chinese client is Semiconductor Manufacturing International China. Kilpatrick also does China-related work for U.S. clients including Lowe's, Oxford Industries and Neusoft Corp.

Chang said intellectual property law and enforcement has "matured significantly" in China over the last five years, spurred by the country's entry into the World Trade Organization in 2001.

He said Chinese policymakers have increased the focus on developing homegrown IP. As more IP suits have been brought, the Chinese judiciary and bar have become more experienced in adjudicating them.

"I see more patent cases being filed in the large cities and more uniformity in how they are handled," Chang said, adding that he thinks there is a "much more level playing field" now for IP rights in China's large cities.

Chang's move to Shanghai to open Kilpatrick's new office is a return to his roots. He said his father was born in Shanghai but emigrated in 1948, right before China's revolution.

He speaks a little Chinese, adding that most or all of the Chinese companies he represents have English speakers, while Gray, his associate, speaks fluent Mandarin. "I continue to work on it," Chang said.

Kilpatrick joins several other large firms with an Atlanta presence that have Asia offices. Troutman Sanders has locations in Shanghai, Beijing and Hong Kong. King & Spalding has a Singapore office.

Paul Hastings has offices in Shanghai, Beijing, Hong Kong and Tokyo, while Jones Day has offices in Shanghai, Beijing, Hong Kong, Taipei, Tokyo and Singapore.