Pfizer is appealing the Viagra case, and the company has made it clear that IP protection and enforcement will have a direct impact on Pfizer's future development in China. A Pfizer spokesman said the company has signed two memorandums of understanding with the Shanghai government to provide training and other resources to assist the Chinese government in promptly identifying counterfeit products and closing down factories involved in illegal activities.

Simon Luk, chairman of the Hong Kong practice of Heller Ehrman White & McAuliffe LLP, a US law firm with a comprehensive life sciences practice, says that multinational companies should take note that more Chinese companies are stepping up their efforts to overturn the validity of patents of multinational companies in China, and that Chinese laws "are sometimes construed by the authorities in an unfavorable way to foreigners."

Where to Locate? As Western pharmaceutical and biotech companies look to expand into China to establish R&D, commercialization, and manufacturing operations either with a local partner or by means of a wholly owned subsidiary, the question of location becomes particularly important. There are several factors to consider when choosing among different cities and industrial parks. These include:

• the availability of local talent for required functions
• proximity to leading research institutions, potential partners, and regulatory agencies
• quality and completeness of infrastructure and services
• quality and quantity of other enterprises in the same community
• the cost of doing business compared with other sites
• availability of required land and possible future expansion
• support of the local and central government and specific incentives for overseas companies.

About 40 prominent Chinese pharmaceutical companies and institutions have signed leases to move into the CBP park in the next two or three years. The industrial park also boasts the highest concentration of research talents in its surroundings, given its proximity to more than 100 universities and top-notch research institutions. More information is available on the website: http://www.cbp.net.cn/.

The Shanghai Zhangjiang Hi-Tech Park has enjoyed an impressive growth in the past 10 years, attracting dozens of local and overseas life science companies, including Roche and Eli Lilly. Shanghai's pragmatic commercial culture and flexibility make it an attractive destination for international businesses. The top leaders of the new Shanghai Pudong area and Zhangjiang Hi-Tech Park are also looking into the possibility of establishing a life science venture capital investment fund modeled after successful US VC funds. The goal is to help stimulate and promote the growth of the nascent Chinese biotech industry in the park and leverage the proven US VC model in terms of screening, evaluating, and managing investment opportunities. Zhangjiang Hi-Tech Park's website is http://www.zjpark.com/.