This article is reprint from the WeChat public account: IPRlearn
Don't mention that applying for a trademark in mainland China is useless anymore!
On May 28, 2020, General Rules of the Civil Law of the People’s Republic of China was officially adopted! This law will come into effect on January 1, 2021. The "Civil Code" has 7 chapters and 1,260 articles, which are the general rules, property rights, contracts, personality rights, marriage and family, inheritance, tort liability and supplementary provisions.
Although the provisions of intellectual property rights doesn't separately compile and incorporate in "Civil Code", in order to strengthen the protection of intellectual property rights and increase the cost of infringement and violation of laws, the punitive compensation provisions for intellectual property rights were introduced into the Civil Law:
Article 1185: Punitive Damages for Infringement of Intellectual Property Rights.
If the circumstances are serious that intentionally infringes on the intellectual property rights of others. The infringed person has the right to request corresponding punitive damages.
The intellectual property rights and contract of the Civil Code are as follows:
Part 1 General Rules
Chapter 5 Civil Rights
Article 123 A civil subject enjoys intellectual property rights in accordance with the law.
Intellectual property rights are the proprietary rights enjoyed by right holders in accordance with the law in respect of the following objects:
1. Works;
2. Inventions, utility models and designs;
3. Trademarks;
4. Geographic indications;
5. Trade secrets;
6. Layout designs of integrated circuits;
7. New varieties of plants; and
8. Other objects specified by the law.
Part 2 Real Rights
Part 2 Branch Ownership
Contents 18 Pledge
Article 440 Scope of rights pledge: Pledge may be established on any of the following rights which an obligor or third party has the right to dispose of:
(1)money orders, checks, and cashier's checks;
(2)bonds and deposit receipts;
(3)warehouse receipts and lading bills;
(4)transferable fund units and stock rights;
(5)such transferable property rights in intellectual property as exclusive trademark rights, patent rights, copyrights, etc;
(6)account receivables
(7)other property rights that can be pledged as prescribed by any law or administrative regulation.
Article 440 Pledge with property rights in intellectual property rights. The pledge right's restrictions of the establishment and transfer: in the case of the pledge of registered trademark rights, patent rights, copyrights or other property rights in the intellectual property, the parties concerned shall conclude a written contract, and the right of pledge shall be established when the relevant competent authority has registered the pledge. After the property rights in the intellectual property have been pledged, the pledger shall not transfer the pledge or permit anyone else to use it, unless it is otherwise agreed to between the pledger and the pledgee after negotiations. The pledger shall use the money incurred from transferring the pledged intellectual property or permitting anyone else to use it to fulfill the obligee's rights in advance, or submit the aforesaid money to a competent authority for keeping.
Part 3 Contract
Part 1 Branch General Provisions
Chapter 2 Conclusion of Contracts
Article 501 Party's duty of confidentiality: business secrets acquired by a party during the course of concluding a contract shall not be disclosed or improperly used, regardless of the establishment of the contract. The party who discloses or improperly uses such business secrets, thereby causing any losses to the other party, shall be liable for damages.
Part 2 Branch Typical Contract
Chapter 9 Sales Contracts
Article 600 Attribution of intellectual property: when a subject matter involving intellectual property rights such as computer software is sold, the intellectual property rights of such subject matter shall not vest in the buyer except as otherwise provided by law or agreed by the parties.
Chapter 20 Technology Contracts
Section 1 General Rules
Article 843 Definition of Technology Contract: a technology contract refers to a contract whereby the parties prescribe their rights and obligations in respect of the development or transfer of technology, or in respect of technical consulting or service.
Article 844 The purpose of the technology contract: the conclusion of a technology contract shall be conducive to protection of intellectual property and the progress of science and technology, and accelerate the conversion, application and dissemination of the scientific and technological achievements.
Article 324 Main terms of the technology contract: the contents of a technology contract shall be agreed upon by the parties, and shall contain the following clauses in general: name of the project; contents; scope and requirements of the subject matter; plan, schedule, period, place, territory and method of performance; confidentiality of the technical information and materials; ownership of the technological achievements and method of sharing the gains therefrom; standards for and method of inspection and acceptance; interpretation of technical terms and expressions.
Background materials on the technology, reports on feasibility studies and technological appraisals, project descriptions and plans, technological standards, technological specifications, original designs and documents on technological processes, as well as other technology files relevant to the performance of the contract may be made as integral parts of the contract as agreed by the parties in the contract.
Where a technology contract involves a patent, the title of the invention or creation, the patent applicant and the patentee, the date and number of application, the patent number as well as the valid term of patent rights shall be indicated.
Article 846 The price, remuneration or royalties in the technology contract : the method of payment of the price, remuneration or royalties in the technology contract shall be stipulated by the parties. The parties may adopt the method of an overall calculation and lump-sum payment or an overall calculation and payment by installments, or payment made in the form of royalty or in the form of royalty with an additional up-front fee.
If the royalty method is adopted in the contract, the royalty may be calculated based on the price of the product, the increased value of output derived from the exploitation of the patent or from use of the know-how, the profit or the sales. They may also adopt other methods of calculation. The royalty rate may be a fixed rate, or subject to annual increase or decrease.
If the royalty method is adopted, the parties shall stipulate in the contract a method for examining the relevant accounts.
Article 847 Property rights of a job-related technological achievement: if the rights to use and transfer a job-related technological achievement belong to a legal person or other organization, such legal person or other organization may conclude a technology contract in respect of that achievement. The legal person or other organization shall allocate a certain proportion from the gains acquired from the use and transfer of such job-related technological achievement to reward or remunerate the individual who accomplished this technological achievement. If the legal person or other organization concludes a technology contract to transfer the job-related technological achievement, the individual who accomplished this achievement shall have the right of first refusal under the same conditions.
A job-related technological achievement refers to a technological achievement accomplished in the process of carrying out the task assigned by a legal person or other organization, or by mainly through utilizing the materials and technological resources of the legal person or other organization.
Article 848 Property rights of a non-job-related technological achievement: the rights to use and transfer a non-job-related technological achievement belong to the individual who accomplished it. The individual may conclude a technology contract on such non-job-related technological achievement.
Article 849 Personal rights of technological achievement: an individual who has accomplished a technological achievement shall have the rights to be named as such in the documents concerning the technological achievement and to receive certificates of honor and awards for the achievement.
Article 850 Null and void of technology contract: a technology contract which illegally monopolizes technology, impedes technological progress, or infringes the technological achievement of others shall be null and void.
Section 2 Technology Development Contracts
Article 851 Definition and form of technology development contract: a technology development contract refers to a contract concluded between the parties in respect of research and development of a new technology, new product, new process or new material, and the system thereof.
Technology development contracts include commissioned development contracts and cooperative development contracts.
A technology development contract shall be made in written form.
The provisions governing technology development contracts apply mutatis mutandis to any contract concluded between the parties for the purpose of conversion of a scientific or technological achievement with industrial application value.
Article 852 Obligation of the principal of the contract for development: the commissioning party to a commissioned development contract shall pay for the research and development expenses and remuneration, supply technological materials and original data, complete coordinating tasks and accept the results of research and development in accordance with the terms of the contract.
Article 853 Obligation of the research developer who commissions the development contract: the party responsible for research and development shall, in accordance with the terms of the contract, formulate and implement a research and development plan, use the research and development budget in a reasonable way, complete the research and development and deliver the results thereof on schedule, provide the relevant technological materials and necessary technical guidance and assist the commissioning party in mastering the results of the research and development.
Article 854 Liability for breach of contract for commissioned development contract: if the commissioning party violates the contract, thereby causing a standstill, delay or failure in the research and development work, such party shall be liable for breach of contract.
Article 855 The main obligations of the parties to the cooperative development contract: the parties to a cooperative development contract shall, in accordance with the terms of the contract, make their investment (including investment of technology), participate in the research and development according to their allocated tasks, and cooperating with other parties to the contract in the research and development work.
Article 856 Liability for breach of contract in cooperative development contracts: if a party to a cooperative development contract violates the contract, thereby causing a standstill, delay or failure in the research and development work, such party shall be liable for breach of contract.
Article 857 Rescind technology development contracts: if the technology which is the subject matter in a technology development contract has been made public by others, rendering the performance of this technology development contract meaningless, the parties may rescind the contract.
Article 858 Risk burden and notification obligation of technology development contract: the liability for risks involved in failure in part or in whole in the research and development resulting from insurmountable technical difficulties occurring in the process of performance of a technology development contract shall be agreed upon by the parties to the contract. If there is no such agreement in the contract or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, such risk liability shall be shared reasonably by the parties.
If a party discovers the circumstances set out in the preceding paragraph which may result in failure in part or in whole in the research and development, the party shall inform the other party and take appropriate measures to reduce losses in a timely manner. If the party fails to give the notice and take appropriate measures in a timely manner, resulting in further losses, the party shall be liable for such further losses.
Article 859 Attribution of technical achievements in commissioned development contracts: with respect to an invention or creation accomplished in the performance of a commissioned development, the right to apply for a patent belongs to the party that undertakes the research and development, unless otherwise agreed by the parties. If the party that undertakes the research and development is granted a patent right, the commissioning party may exploit the patent for free.
If the party that undertakes the research and development transfers the right to apply for a patent, the commissioning party shall have the right of first refusal under the same conditions.
Article 860 Attribution of technical achievements in cooperative development contracts: the right to apply for a patent of an invention or creation accomplished in cooperative development shall be jointly owned by the parties who participated in the cooperative development, unless otherwise agreed by the parties. If one party transfers its joint right to apply for a patent, the other party or parties may have the right of first refusal under the same conditions.
If a party in the cooperative development declares that it waives its joint right to apply for a patent, the patent may be applied for independently by the other party or jointly by the other parties. If a patent is granted to the applicant, the party that waived its right to apply for the patent may exploit the patent for free.
Where one party in a cooperative development does not agree to apply for a patent, the other party or parties may not apply for it.
Article 861 Attribution and sharing of the results of technological secrets: the rights to use and transfer the know-how achieved in the commissioned development or cooperative development, and the method of distributing the gains derived therefrom shall be agreed upon by the parties to the contract. If there is no such agreement or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, either or each party has the right to use and transfer such rights. However, the party that undertakes the research and development in a commissioned development may not transfer the results of the research and development to a third party before delivering such results to the commissioning party.
Section 3 Technology Transfer Contracts
Article 862 Definition of technology transfer contract and technology license contract: technology transfer contract is a contract concluded by the right holder who legally owns the technology to transfer the patent rights, right to apply for a patent and the related rights of technical secret.
Technology license contract is a contract concluded by the right holder who legally owns the technology to permit others to implement and use the relevant rights of the existing specific patents and technical secrets.
In the technology transfer contract and technology licensing contract, the agreement on the provision of special equipment and raw materials for the implementation of technology or the provision of related technical consultation and technical services is an integral part of the contract.
Article 863 Types and forms of technology transfer contracts and technology license contracts: technology transfer contracts include contracts for the transfer of patent rights, the transfer of the right to apply for a patent, the transfer of the know-how and the licensing of patents. A technology transfer contract shall be made in written form.
Article 864 Restrictive terms of technology transfer contracts and technology licensing contracts: a technology transfer contract may stipulate the scope of the exploitation of a patent or the use of the know-how by the transferor and the transferee, provided that it may not restrict technological competition and technological development.
Article 865 Restrictions on patent implementation licensing contracts: a patent licensing contract shall be valid only within the term of the patent right. The patentee may not conclude a patent licensing contract with another person once the term of the patent right expires or the patent right is declared invalid.
Article 866 The main obligations of the licensor of the patent implementation license contract: the transferor to a patent licensing contract shall, in accordance with the terms of the contract, license the transferee to exploit the patent, submit the technological materials relevant to the exploitation of the patent and provide necessary technical guidance.
Article 867 The main obligations of the licensee of the patent implementation license contract: the transferee to a patent licensing contract shall exploit the patent in accordance with the terms of the contract, and may not sublicense the patent to any third party other than those as provided in the contract, and shall pay royalties as agreed.
Article 868 Main obligations of technology secret assignor and licensor: the transferor to a know-how transfer contract shall, in accordance with the terms of the contract, supply technological materials, provide technical guidance and warrant the practical applicability and reliability of the technology and maintain confidentiality.
The confidentiality obligations stipulated in the preceding paragraph do not restrict the licensor from applying for a patent, unless the parties agree otherwise.
Article 869 Main obligations of assignees and licensees of technical secrets: the transferee to a know-how transfer contract shall use the technology, pay the royalties and maintain confidentiality in accordance with the terms of the contract.
Article 870 Guarantee obligations of the transferor of the technology transfer contract and the licensor of the technology licensing contract: the transferor to a technology transfer contract shall warrant that it is the lawful owner of the supplied technology and the supplied technology is complete, error-free, effective and able to accomplish the agreed goal.
Article 871 Confidentiality obligations of the transferee of the technology transfer contract and the licensee of the technology licensing contract: the transferee to a technology transfer contract shall, in conformity with the scope and the time period as agreed upon in the contract, assume the obligation of maintaining confidentiality for the undisclosed part of the technology supplied by the transferor.
Article 872 Liability of licensor and assignor for breach of contract: a transferor failing to transfer the technology in accordance with the terms of the contract shall return part or all of the royalties and be liable for breach of contract. If the transferor exploits the patent or uses the know-how beyond the prescribed scope, or if the transferor unilaterally licenses a third party to exploit the patent or use the know-how in violation of the contract, the transferor shall cease the act of breach of contract and be liable for breach of contract. A transferor violating the agreed obligation of maintaining confidentiality shall be liable for breach of contract.
The assignor's liability for breach of contract shall refer to the provisions of the preceding paragraph.
Article 873 Licensee and assignee liability for breach of contract: a transferee failing to pay the royalties in accordance with the terms of the contract shall make up for such payment and pay the liquidated damages as agreed. The transferee refusing to pay the overdue royalties or the liquidated damages shall cease the exploitation of the patent or the use of the know-how, return the technological materials and be liable for breach of contract. If the transferee exploits the patent or uses the know-how beyond the prescribed scope, or if the transferee unilaterally licenses a third party to exploit the patent or use the know-how without the consent of the transferor, the transferee shall cease the act of breach and be liable for breach of contract. A transferee violating the agreed obligation of maintaining confidentiality shall be liable for breach of contract.
The assignee's liability for breach of contract shall refer to the provisions of the preceding paragraph.
Article 874 Infringement liability of assignee and licensee: if, in the exploitation of a patent or the use of know-how as agreed, the transferee infringes the lawful rights and interests of another person, the transferor shall assume the liability, unless the parties have agreed otherwise.
Article 875 Attribution and sharing of subsequent technical achievements: the parties may stipulate in a technology transfer contract the method of sharing technological achievement obtained from the subsequent improvements made in the exploitation of a patent or the use of know-how in light of the principle of mutual benefit. Where there is no such agreement in the contract or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the other parties shall have no right to share the technological achievement made by one party in the subsequent improvements.
Article 876 Transfer and licensing of other intellectual property: transfer and licensing of other intellectual property rights such as the design exclusivity right of integrated circuit layouts, the right of new plant varieties, the copyright of computer software shall refer to the relevant regulations in this section.
Article 877 Applicable law for technology import and export contracts or patent and patent application contracts: where the laws and administrative regulations provide otherwise for the technology import and export contracts, patent contracts or patent application contracts, such provisions shall govern.
Section 4 Technical Consultancy Contracts and Technical Service Contracts
Article 878 Technical consultancy and technical service contracts: technical consultancy contracts include contracts for the provision of feasibility studies, technological forecasts, specialized technical investigations and analysis and evaluation reports in respect of specific projects.
Technical service contracts refer to contracts whereby one party agrees to solve specific technical problems by using its technical expertise for the other party, excluding construction project contracts and contracts for works.
Article 879 Obligations of the technical consultancy contract client: the client to a technical consultancy contract shall, as agreed in the contract, elucidate the issue for which consultancy is sought, supply technological background information and the relevant technical materials and data, accept from the consultant the result of its work and pay the remuneration.
Article 880 Obligations of trustees of technical consultancy contracts: the consultant to a technical consultancy contract shall, as agreed in the contract, complete the consultancy report or answer the questions raised by the client within the agreed time limit. The consultancy report thus submitted shall meet the requirements as agreed in the contract.
Article 881 Liability for breach of contract by trustee of technical consultancy contract: if the client to a technical consultancy contract fails to supply the necessary materials and data in accordance with the terms of the contract, which consequently affects the progress and quality of the consultancy work, or if the client fails to accept the result of the work or accepts it beyond the time limit, the client shall not claim refund of the remuneration already paid, and shall pay any outstanding remuneration.
If the consultant to a technical consultancy contract fails to submit the consultancy report on time or the report thus submitted does not meet the requirements as agreed in the contract, the consultant shall assume liability for breach of contract by way of reducing or foregoing the remuneration thereof.
Where the consultancy report and advice submitted by the consultant to a technical consultancy contract meet the requirements set out in the contract, any loss resulting from decisions made by the client on the basis thereof of shall be borne by the client, unless the parties have agreed otherwise.
Article 882 Obligations of technical service contract clients: the client to a technical service contract shall supply the work facilities and accomplish cooperative duties in accordance with the terms of the contract, accept the result of the work and pay the remuneration.
Article 883 Obligations of technical service contract trustee: the service provider to a technical service contract shall complete the service, solve the technical problems, guarantee the quality of its work and impart the know-how for solving technical problems in accordance with the terms of the contract.
Article 884 Liability for breach of technical service contract: if the client to a technical service contract fails to fulfill its contractual obligations or the fulfillment is not in conformity with the terms of the contract, which consequently affects the progress and the quality of the work, or if the client fails to accept the result of the work or accepts it beyond the time limit, the client may not claim a refund of the remuneration paid, and shall pay the outstanding remuneration.
Where the service provider fails to complete the service work in conformity with the terms of the contract, the said provider shall assume liability for breach of contract by way of foregoing the remuneration.
Article 885 The achievement attribution of innovative technology: any new technological achievement accomplished by the consultant or service provider in the performance of a technical consultancy contract or a technical service contract by using the technological materials and work facilities supplied by the client shall belong to the consultant or service provider, while any new technological achievement accomplished by the client by using the achievement of the work of the consultant or service provider shall belong to the client. However, if the parties agree otherwise in the contract, such agreement shall govern.
In the technical consultancy contract and technical service contract, the cost required by the trustee to carry out the work normally is borne by the trustee when there is no agreement or the agreement is not clear.
Article887 Applicable law for technical intermediary contracts and technical training contracts: where the laws and regulations provide otherwise for technical intermediation contracts and technical training contracts, such provisions shall govern.
Part 5 Marriage Law
Husband and wife Relations
Article 1062 Common property of husband and wife: the following properties incurred during the existence of marriage shall be jointly owned by
1. both husband and wife:
2. wages and bonuses;
3. any income incurred from production or management;
4. any income incurred from intellectual property;
5. any property inherited or bestowed, with the exception of those as mentioned in Article 18 (c) of this law;
6. other property that shall be jointly owned.
7. Both husband and wife shall have equal rights in the disposal of jointly owned property.
Chapter 2 Constituting Liability and Methods of Assuming Liability
Article 1185: Punitive Damages for Infringement of Intellectual Property Rights.
If the circumstances are serious that intentionally infringes on the intellectual property rights of others. The infringed person has the right to request corresponding punitive damages.
Article 1259 The meaning of legal terms: the terms "above", "below", "within" and "expiration" referred to in the Civil Law include the number itself;
the terms "dissatisfaction", "excess", and "outside" in the Civil Law do not include the number itself.
Article 1260 Date of implementation and repeal of the old law: this law shall come into force on January 1, 2021. At the same time, Marriage Law of the People's Republic of China, Law of Succession of the People's Republic of China, General Principles of the Civil Law of the People's Republic of China, Adoption Law of the People's Republic of China, The Guarantee Law of the People's Republic of China , Contract Law of the People's Republic of China, Property Law of the People's Republic of China, Tort Law of the People's Republic of China and General Rules of the Civil Law of the People's Republic of China were abolished.
