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Chart: Taiwanese patent suits in California courts Four years ago William Anthony Jr. got a phone call that proved to be auspicious. A local lawyer had to pass on a case for a Taiwanese client and suggested that the client call Anthony, the head of Orrick, Herrington & Sutcliffe’s intellectual property group. Anthony didn’t know much about Taiwanese companies then, but he was interested in the Asian market. He met with the general counsel of Taipei-based Compal Electronics Inc., the world’t largest manufacturer of laptops, and agreed to defend the company against a patent infringement suit brought by Samsung Corp. The battle gave Orrick entree into what has become one of the world’ hottest markets for intellectual property work. Taipei and Hsinchu, a high-tech corridor about 45 miles from Taipei, are home to dozens of technology companies, primarily in the semiconductor field. As the industry has expanded, Taiwanese companies have become the target of a growing number of patent suits by Japanese, Korean and U.S. companies, the bulk of which are filed in U.S. courts. Taiwan is “a new Japan,” said Orrick partner Kai Tseng. “It’s how Japan was 15 to 20 years ago with the high-tech boom there.” GOLDEN TRIANGLE Since the Compal case came along, Orrick has moved aggressively to build a client base in Taiwan. The firm now has at least a dozen Taiwanese companies on its client roster and plans to open an office in Taipei to deal exclusively with intellectual property work. “We’re in the final stages of putting the plan to the executive committee and the partnership for approval,” Anthony said. If the office opens, Tseng would split his time between Taiwan and Silicon Valley. Anthony and partner Eric Wesenberg, who is in charge of the firm’s expansion in Asia, would also spend time there, as would two associates, Rowena Young and Duo Chen, who are fluent in Mandarin. Orrick would join a handful of U.S. firms that have developed a niche IP practice in the region. The IP firm Finnegan, Henderson, Farabow, Garrett & Dunner opened a Taipei office last year, and Washington, D.C.-based Shaw Pittman established an outpost in April. Other U.S. firms with Taipei offices handle broader legal matters in addition to patent litigation. Baker & McKenzie opened a full-service shop in 1977, as did Jones Day in 1990. Seattle’s Preston Gates & Ellis opened a three-lawyer office in Taipei last year. But the firm sends patent litigation work to lawyers in its U.S. offices. Squire, Sanders & Dempsey, whose Taipei office recently closed and became an affiliate of a Taiwanese firm, is also a contender for IP work in the region, as is Fish & Richardson, which has seven Taiwanese lawyers, all based in the U.S. While other Bay Area firms like Heller Ehrman White & McAuliffe and Morrison & Foerster have set up outposts in mainland China, Orrick has planted its roots in Taiwan. Anthony said technology has its center of gravity in Silicon Valley, Taiwan and the Shanghai area of mainland China. This is “the new golden triangle,” Anthony said. “To be an IP tech group, you have to pay attention to that triangle.” HOMETOWN TIES To tap into Taiwan, Anthony turned to Tseng, who grew up in Hsinchu and has ties to the region. An associate at the time, Tseng took charge of the initial Compal case and through the company’s general counsel began meeting potential clients. Acer Inc., a leading manufacturer of notebook and desktop computers, also became a client and helped Tseng make further contacts. Tseng and his colleagues have been able to tout Orrick’s successful work in the United States. The firm’s IP group, which is concentrated in the Menlo Park office, has won cases for eBay Inc., Microsoft Corp., Cisco Systems Inc., Applied Materials Inc. and Yahoo Inc. But Tseng, who travels to Taiwan 12 to 16 times a year, said it takes awhile to establish a relationship with Taiwanese companies. Other firms have had longstanding relationships with Taiwanese companies. Fish & Richardson has had a number of Taiwanese clients for the past 13 years. Three years ago, the firm launched its U.S.-based Taiwan practice group, which currently is handling eight patent suits. Finnegan, which has had Taiwanese clients for nearly 20 years, represents about 20 to 30 companies in Taipei, including semiconductor chip manufacturer Winbond Electronics Corp. and D-Link Systems Inc. Finnegan partner E. Robert Yoches said that while Japan and Korea have six or seven dominant corporations to which a firm can market, Taiwan has many small businesses that are growing quickly. “There’s a lot more opportunity with a lot more companies,” Yoches said. Shaw Pittman, which has worked with Taiwanese clients for the past decade, decided to boost its presence in the region by opening two offices simultaneously: one in Taipei and another in East Palo Alto. “To be effective in Taiwan and China, we needed reinforcement through a West Coast operation,” said Shaw Pittman partner Lawrence Gotts. THE U.S. CONNECTION That’s in part due to the fact that so many infringement suits against Taiwanese companies are filed in U.S. courts. It’s an appropriate venue since the companies ship their products into the United States. Lawyers say plaintiffs and defendants prefer U.S. courts since patent law is well developed here and the rules governing disputes are straightforward. The Northern District of California gets the lion’s share of these cases. Orrick, for example, is representing Nanya Technology Corp. in a suit by the Japanese company Renesas Technology Corp. before Judge Jeremy Fogel in San Jose. The firm is also defending Compal against a suit by South Korea’s LG Electronics Inc. before Judge Claudia Wilken in Oakland. In that same case, scheduled to go to trial in September, Squire, Sanders is representing co-defendants Asustek Computer Inc. and First International Computer Inc. Not every case lands in California. Preston Gates is defending one of 40 monitor suppliers sued by Safer Display Technology Ltd. in the Eastern District of Virginia. Finnegan is counsel for Safer in that case. Finnegan partner John Alison, who relocated from the firm’ Washington, D.C., office to head up the Taipei outpost, said the number of suits filed against Taiwanese companies has accelerated over the past five to eight years. “Every year, you see a further intensification,” he said. Anthony called it the “domino effect” of IP litigation. U.S. companies initially sued Japanese entities, he said, which got exposure to the IP system in the United States. “Japanese companies took a lesson from the Texas Instruments and Intels and went after the Koreans,” which are now going after the Taiwanese, Anthony said. Other IP lawyers attributed the boom in litigation to the success of Taiwanese companies in the electronics field. While they are more often facing lawsuits rather than pursuing them, Taiwanese businesses have become savvy about developing and protecting their patent portfolios. They are learning how patents operate “and the measures one takes to avoid” being sued, said Michael Bettinger, a partner in Preston Gates’s San Francisco office. “The curve is on the way up, but it’ about to peak.” Taiwanese companies are also moving to protect their patents. Fish & Richardson client Chi Mei Optoelectronics Corp. has sued Paris-based Commissariat L’Energie Atomique in Oakland federal court. And Orrick client Wistron NeWeb Corp. has a complaint pending in Los Angeles against Georgia’s ProBrand International Inc. and Taiwan’ Jonsa Technologies Co. Ltd. Meanwhile, Orrick has set its sights on the rest of Asia. In addition to expanding its Tokyo office, the firm plans to establish a presence in Korea and mainland China. Two partners are now meeting prospective clients in Korea. Taiwan is Orrick’ first big IP opportunity in Asia, Anthony said. “It’s particularly important for us because it’s a launching pad into China.”

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