Licensing considerations for global companies in China
26 January 2022 | IAMIn China, as in other jurisdictions, there have been many cases of foreign companies filing patent infringement claims against third parties, which lead to a so-called 'patent battle’. A common strategy to deal with patent infringement claims is to negotiate to obtain a patent licence. However, there are particular issues other than the common issues one may experience in other jurisdictions, this article raises some red flag issues for global companies signing licensing agreements in China.
Type of patent licence
A patent licensing agreement should be formalised in written form. According to the degree of restriction on the licensee from high to low, the agreement can be divided into three categories, namely: exclusive licence, sole licence and general licence (独占许可、排他许可and普通许可 in Chinese). The three types of licences have different legal effects, making it crucial that each is used correctly. This is especially the case when a licence is drafted in multiple languages. Quite often, parties mix up sole and exclusive licences. It is thus important to define the nature of the licence, rather than merely naming it as either a sole or exclusive licence, because translation issues or different governing laws may lead to different interpretations.An exclusive licence enables the patentee to license its invention to the licensee only for a specific period of time, and binds the licensor not to share the patent with anyone else. Even the patentee itself is not allowed to exploit the patent. A sole licence allows the patentee to license the patent to the licensee only, but the patentee itself is permitted to exploit the patent. A general or non-exclusive licence does not restrict the patentee to further exploit or license the patent to other parties.In terms of the legal standing required to assert the patent before a Chinese court for a patent infringement case, in practice
an exclusive licensee could unilaterally file a patent infringement lawsuit asserting the licensed patent;
a sole licensee could file a patent infringement unilaterally under the circumstances that the patentee does not file the patent infringement lawsuit in relation to the licensed patent or assert the patent jointly with the patentee; and
a general licensee needs to obtain specific authorisation from the patentee to assert the licensed patent, to file a patent infringement lawsuit.
Undertakings in the patent licence agreement
To further protect the patentee’s interests, some patentees may incorporate a no-challenge clause into the patent licence agreement to ensure that the licensee undertakes not to file an invalidation against the subject patent(s). However, there is a risk that the relevant clauses may be regarded as invalid under Chinese law, because they obstruct technological improvements or create a monopoly on technology.
Entitlement to improvements
The Civil Code of People's Republic of China specifies that a technology agreement that illegally monopolises technology or infringes another’s technological achievement is invalid. Therefore, a clause in a licensing agreement stipulating that all the improvements shall unconditionally be owned by the patentee/licensor without fair consideration may be deemed invalid. On the other hand, if the entitlement clause is not sufficiently specific or detailed, the general wording (eg, the improvement belongs to the party who makes a substantial contribution) is not helpful in an actual entitlement dispute in the future.
Filing licence agreements at the China National Intellectual Property Office (CNIPA)
Although filing the relevant licence agreement shall not affect its effectiveness, it will be useful for the licensee when it comes to enforcing its rights against third parties infringing the relevant patent. CNIPA’s endorsement would also enhance the role of the patentee/licensor.
Exiting licence agreements
One of the more common disputes between licensors and licensees is the early exit from the terms of a licence agreement. Careful thought must be given to the termination clause of a licence agreement – especially from the licensor’s perspective – so that the licensor’s patent will not be trapped in a deal that it has no way of getting out of. A reasonable long fixed term, with flexibility in terminating the agreement when it can, is recommended. All in all, in China – as elsewhere – Iicensing is a recommended route to preventing patent infringement and can be beneficial for both the licensor and licensee. The terms and conditions of the patent licensing agreement should be carefully drafted and reviewed by the legal professionals in all relevant jurisdictions to better protect the party’s rights and interests and avoid potential litigation. For additional insights, see “Crucial Clauses in Global IP Transactions and the Importance of Local Law Advice”. Google翻译：
跨国公司在中国的许可注意事项
26 January 2022 | IAM在中国，与其他司法管辖区一样，外国公司向第三方提起专利侵权诉讼的案例很多，这导致了所谓的“专利战”。处理专利侵权索赔的常见策略是通过谈判获得专利许可。然而，除了在其他司法管辖区可能遇到的常见问题之外，还有一些特殊问题，本文为在中国签署许可协议的全球公司提出了一些警示信号。专利许可类型专利许可协议应以书面形式正式确定。根据对被许可人的限制程度从高到低，协议可分为独占许可、排他许可和普通许可三类。这三种许可证具有不同的法律效力，因此正确使用每种许可类型至关重要。当以多种语言起草许可证时尤其如此。很多时候，各方混淆了独占许可和排他许可。因此，重要的是定义许可的性质，而不是仅仅将其命名为独占许可或排他许可，因为翻译问题或不同的适用法律可能导致不同的解释。独占许可使专利权人仅在特定期限内将其发明许可给被许可人，并约束许可人不得与其他任何人共享专利，甚至专利权人本身也不得利用该专利。排他许可允许专利权人仅将专利许可给被许可人，但允许专利权人自己利用专利。普通或非排他性许可并不限制专利权人进一步利用或许可他人使用该专利。就专利侵权案件向中国法院主张专利所要求的法律地位而言，在实践中
专利许可协议中的承诺为进一步保护专利权人的利益，部分专利权人可能会在专利许可协议中加入无异议条款，以确保被许可人承诺不对标的专利提出无效宣告。但是，在中国法律下，相关条款可能会被视为无效，因为它们阻碍技术改进或造成技术垄断。改进的权利《中华人民共和国民法典》规定，非法垄断技术或者侵犯他人技术成果的技术协议无效。因此，许可协议中规定所有改进应无条件地归专利权人/许可人所有且没有公平考虑的条款可能被视为无效。另一方面，如果权利条款不够具体或详细，那么笼统的措辞（例如，改进属于做出实质性贡献的一方）对未来的实际权利争议没有帮助。向中国国家知识产权局 (CNIPA) 提交许可协议尽管提交相关许可协议不影响其效力，但对于被许可人在针对侵犯相关专利的第三方行使权利时将是有用的。CNIPA 的认可也将增强专利权人/许可人的作用。退出许可协议许可人和被许可人之间较常见的争议之一是提前退出许可协议条款。必须仔细考虑许可协议的终止条款——尤其是从许可人的角度来看——以便许可人的专利不会陷入无法摆脱的交易中。建议一个合理的长期固定期限，并在可能的情况下灵活地终止协议。总而言之，在中国——和其他地方一样——许可是防止专利侵权的推荐途径，对许可人和被许可人都有利。专利许可协议的条款和条件应由所有相关司法管辖区的法律专业人员仔细起草和审查，以更好地保护当事人的权益并避免潜在的诉讼。如需更多见解，请参阅“全球知识产权交易中的关键条款和当地法律建议的重要性”。 Source:https://www.iam-media.com/licensing-considerations-global-companies-in-china?utm_source=IAM%2BWeekly%253A%2BSamsung%2Bsued%2Bby%2Bformer%2BIP%2Bhead&utm_medium=email&utm_campaign=IAM%2BWeekly Each article is copyrighted to their original authors. The news is for informational purposes only and does not provide legal advice.
