Foreign companies commonly assign their technology to China entities by licensing their patents, designs, software, trade secrets, or know-how. Transfer of state-of-the-art technology is subject to a special regulatory framework in China that qualifies technology as prohibited, restricted or encouraged. In addition to the high tech, nowadays many foreign SME companies using contract manufacturing to manufacture low technology, consumer, or industrial products, for example based on product designs, must deal with many of the same risks to their IP as their high technology counterparts.
The key to successfully protecting the client IP in technology transfers is to make sure the client has all the relevant contracts in place and airtight. The IP license agreements with the Chinese partner should clarify each party’s rights and ensures that the technology transferred is documented in case issues arise later on. This is especially critical when the Chinese party is also contributing technology and IP becomes difficult to identify or differentiate.
In 2023 the China Intellectual Property Administration published model templates for patent license and transfer matters, in order to regulate the booming patent transfer activities and protect interests of both parties.
CNIPA2023 Template_Patent Transfer & Signing Guideline
