Managing Foreign Associate Relationships in Asia

IPPro_ParkIP_issue32_asia_jan2015_mattsekac_Page_1In the following article, Matt Sekac from Park IP Translations looks at managing foreign associate relationships in Asia and how patent practitioners can effectively manage global patent portfolios, working across international boundaries. The article first appeared in issue 32 of IPPro  Life Sciences Magazine.  For a PDF version, click here: IPPro ParkIP Issue 32.

Managing a global patent portfolio requires patent practitioners to engage on a fairly routine basis with foreign counterparts at law offices around the world.  This can present challenges, as meaningful differences in language, culture, societal norms and professional best practices can emerge as obstacles to conducting important business.  While every group of people has its own customs and the potential for cross-cultural friction may always exist, this type of challenge can be especially pronounced between professionals doing business across eastern and western cultural barriers.

The Asian continent boasts many of the world’s most important markets and is home to some of the world’s most innovative companies.  Western firms across any innovation-driven industry can scarcely ignore the opportunity or the global competitors to be found in the Far East and part of engaging those markets means developing a portfolio of patents across Asian jurisdictions.  To do that, firms in the west must cooperate with local patent professionals to navigate each country’s patent laws and ensure that all requirements associated with obtaining patent protection are satisfied.

I spoke with several professionals at Park IP Translations who have experience working with patent firms in Asia in order to understand some of the most common challenges encountered and the best ways to overcome them.  This article also incorporates input from clients who work in the patent industry and have managed similar challenges when working over in Asia.

Communication

It probably comes as little surprise, but the most common challenges stem from communication.  Part of the difficulty simply has to do with the language barrier.  Gregory Getzan, a registered US patent attorney who works out of Tokyo as Park IP’s lead point of contact for managing relationships across Japan, confirmed as much, saying that “language is of course the biggest issue and written communication is often smoother than trying to speak with someone.  Certain Asian countries spend a lot of time and effort on teaching their children English, but the lack of opportunities for listening and speaking makes verbal communication a challenge more than one might expect.”

Apart from the basic language barrier, though, there can also be issues with responsiveness.

“When we’re evaluating foreign patent firms,” Park IP’s Director of Filing Operations, Brian Daniel, told me, “two of the most important things we look at are communication skills and the level of responsiveness.”  Responsiveness can be easy to overlook, but it’s frequently a source of frustration for patent practitioners managing large global portfolios of patent applications with tight filing deadlines.  Since business hours in Asia are roughly opposite those in the US, communication usually occurs via email and if a response doesn’t arrive overnight, an entire day is lost.

“What you’ll see with a lot of firms is there’s a general inbox for client communication, for example, patents@asialawfirm.com, or something like that,” Brian explained.  “So you send an email and you’ll get an automated response, either instantly or when someone at the office opens it and the response says, basically, ‘We received your message and we’ll be in touch.’  That’s fine as long as you hear something meaningful back soon.  The problem is, in my experience, that not everyone has the same understanding of ‘soon.’  I’ve seen automated messages instructing clients to follow up if they haven’t heard back within three business days.  If I’m working on something urgent or I’ve got a filing deadline coming up, that’s just not acceptable for our business and it’s not acceptable for most of our clients who are counting on us.”

Brian says that the best way to avoid problems with responsiveness is to work together with your associates to arrive at a mutually agreeable set of explicit expectations that both sides agree are reasonable.  If possible, it might also be helpful to obtain direct points of contact that can be reached via telephone with any urgent inquiries.

“We have a very clear set of expectations in place with all of our partnering associates.  One of those expectations is that we’ll receive a substantive response to all communication within one business day—not just an automated acknowledgement that our message went through.  Of course we don’t expect that every single request be completely satisfied within one day, but a big part of our value to clients comes from being readily accessible and responsive.  We need the same thing from our partners.  It’s critical to our business that we be able to rely on our associates in a pinch.  Part of that is being able to verify, in a timely fashion, that new requests or instructions have been properly understood, and work is underway.”

Fees

Obtaining patent protection in Asia is notoriously expensive.  That expense is driven in part by complicated fee schedules that often contain opaque service charges piled on top of a baseline cost.  These charges frequently come in the form of professional service fees tied to a corresponding patent office fee, even if there is no corresponding additional labor—that is, no “professional service”—required of the associate for that particular item.

One common example is an itemized professional service charge for claiming priority.  Claiming priority is a basic element of filing a PCT National Phase application anywhere.  Several patent offices charge an official fee for each priority claimed, which is likely justified by the additional effort required of patent office personnel to research and verify the validity of each priority claim.  But while there is no corresponding effort required on the part of the associate filing the application, many firms will still tack on an extra service fee to line up with the official fee.

“We try to avoid paying fees that aren’t based on a value-added service,” Brian says.  “Say you want to use the two-month grace period for late filing of a PCT National Phase application in China.  The agent’s job doesn’t really change.  The Chinese patent office is going to charge a restoration fee, which is fair enough because you’re filing the application late, but as far as what the agent is doing for you, it’s the same documentation required, the same basic process.  There’s just nothing I can see to justify another $300 in service fees.  But the patent office charges for it, so a lot of firms will, too.”

Clients should take time to scrutinize their associates’ invoices or fee schedules and insist on fully understanding the “service” associated with every “service charge” line item.  Look to negotiate fees that straightforwardly reflect value-added services, pushing for flat fees where possible and appropriate.  Many firms throughout Asia—and anywhere, for that matter—will be willing to negotiate a pricing structure that makes sense for everyone.

Relationships Matter

Brennan Smith became Senior Director of Global Operations at Park IP in 2013, after returning home from a three-year stint as the head of Park IP Asia.  Brennan spent that time working out of Beijing to build a production facility and operational hub from scratch.  Despite having never left the US prior to taking on this responsibility, he was able to find office space, negotiate China’s byzantine regulatory environment, hire a staff, implement best practices and ultimately leave behind a successful and growing center of overseas operations for Park IP Translations.  Today, Park IP’s offices in Beijing and Jinan collectively employ more than thirty dedicated full-time staff and serve as the center of a production network spanning hundreds of translators and multiple partnering associates across the entire continent.

I asked Brennan what advice he would have for western patent practitioners in working with Asian patent firms.  “I’d probably say the same thing I’d say to anyone looking to do any kind of business in Asia, which is to keep in mind that business is driven by relationships in a way that we’re not always used to in the West.”

Nicole Sheehan, Park IP’s Regional Director of Operations in New York, offered an example of what Brennan was talking about.  “Recently we were in the process of conducting service reviews with our overseas partners, which usually involves site visits or in-person meetings whenever possible.   One of the things that we heard from a couple of our providers was that we were being perceived as rude in some of our instruction letters, because our communication didn’t always include basic pleasantries.  We’d receive a deliverable and respond with ‘Receipt Confirmed, Thanks.’ We value our partners across Asia tremendously and this came as a surprise—it was such a routine thing, we weren’t really even thinking about it.  But we were appearing unappreciative.”

“Every country in Asia is home to a different culture with different social norms and different expectations around things like what’s considered polite,” Brennan explained, “and those customs are often quite different from our own.  We get used to interacting with people in a certain way and don’t necessarily consider how we might be received by someone from a completely different background.  In America, a lot of our interaction is very down-to-business.  Everyone has a hundred things to do and we focus on just getting them done.  To us, it might seem overly sensitive to pay much attention to superficial pleasantries, but in this case the expectation was for more than just superficial, business-focused engagement.  Being mindful of things like that helps build trust and mutual respect, which is the foundation of any relationship.”

Being a little more thoughtful and considerate about your interactions can go a long way toward strengthening working relationships with your associates across Asia.  “We started to be more attentive in our communication and I do think it’s had an impact,” Nicole says.  “Our business can be very demanding of our partners overseas and if we’re going to be able to count on them, we have to make sure we’re demonstrating our appreciation.  We’re doing a better job of that now, and we have some of the most loyal partners in this industry.”

Matt Sekac is Senior Director at Park IP Translations in New York

Email: matthew.sekac@parkip.com

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