Sino-U.S. Investment Vehicle To Bring U.S. Medicines Into Chinese Pharmaceutical Market

In the U.S. the pharmaceutical industry has proprietary technology, but China has enough financial resources and a huge domestic market. Therefore an opportunity presents itself for those who can bridge these two markets.

Michelle Jarboe McFee has an interesting article about a partnership between Newsummit Pharmaceutical Group, a biomedical company in Shanghai and Cleveland Bio Fund, a venture led by Mr A. Eddy Zai.

Newsummit has received 100 US dollar from Chinese investors. That money will be invested via the Cleveland Bio Fund in companies with U.S. medicines that have been approved by the U.S. Food and Drug Administration and are selling them in the U.S. but have no strategy to enter China. The partnership is also filing for Chinese patents for the medicines that have U.S. patents, Mr Zai was quoted saying.

Ms McFee writes: "Zai said the Cleveland Bio Fund is working with advisors including the Jones Day law firm and accounting firm Ernst & Young in China to navigate the regulatory system and avoid intellectual-property theft, a challenge for foreign companies."

Read Ms McFee's article for Cleveland.com here.

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Professor T. Ginsburg's "Eastphalia" Theory Applicable To IPR Law in China?

Yesterday, Professor Tom Ginsburg of University of Chicago Law School was giving a presentation at the University of Hong Kong about his paper 'Eastphalia As The Perfection Of Westphalia', which will be published in the Indiana Journal of Global Legal Studies.

In it he is trying to answer whether the following claims are each valid and if so compatible:

1. Globalisation leads to universalism and global constitutionalism (regionalism), so away from sovereignty as made explicit in the treaties of the Peace of Westphalia;

2. Asia will become the dominant power.

Read his paper here.

With "Eastphalia" Professor Ginsburg characterises the possibility that the values of Westphalia will continue in Asia. Nowadays, these "Asian values" of emphasis on sovereignty and non-interference have led to a distinctive sort of foreign trade agreements (FTAs) in China. These FTAs include subjects such as foreign direct investments (FDIs) and often intellectual property rights.

According to Professor Ginsburg, when China is signing these FTAs it is:

• not interested in exporting its laws to other countries. It could therefore described as less imperial in this sense, less contractually inclined;
• The FTAs have a framework quality, vague made for an ongoing relationship;
• not legally enforceable and;
• less driven by a template.

However, in regard to the legislation of intellectual property rights law, it might be that China is at the brink of exporting its vision on the protection and enforcement of intellectual property rights in international governmental bodies such as WIPO and WTO's TRIPs.

To be continued later.

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IPR Infringements Can Make Investments in China Capricious

The Financial Times of January 4th (online), 5th (HK paper version) has an interesting article about famous stock-picker Anthony Bolton who is trying his expertise/luck in China. In the article , written by Sundeep Tucker, Jamil Anderlini and Robert Cookon, they cite Jack Perkowski, managing partner of JFP Holdings about legal peculiaraties that influence investments in China:

""China has a legal system but enforcement is missing, particularly on things like intellectual property and contractual issues," according to Jack Perkowski, managing partner of JFP Holdings, who after 20 years on Wall Street has spent the past 15 years in China. He warns investors to be "very carfeful looking at competitive positions of companies in China because it is such a competitive market with tremendous price pressure on most products". For example, a market leader can quickly find its intellectual property has been stolen, its products copied and its price position undercut. (..)"

Of course companies in China can be victims or perpetrators or both. When China was not booming Foreign Direct Investments (FDIs) into China were seen as dependent on the investment climate, including the legal situation in regard to IPRs. However, China has enough foreign reserves and because of the incredible economic growth (for the coming year expected at 10 percent) China attracts FDIs no matter what the legal situation is.

Read the FT article here.

Photo/text: Danny Friedmann

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