Protecting IPR When Conducting
R&D in China
Welcome to the webinar
Philippe Healey
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The China IPR SME Helpdesk
@iprchina
Fan page: “China IPR SME Helpdesk”
"China IPR"
The China IPR SME Helpdesk provides free, confidential, business-focused advice relating to China IPR to European Small and Medium Enterprises (SMEs).
Helpdesk Enquiry Service – question@china-iprhelpdesk.eu
Training & Events Materials
Today’s Speaker
• He Jing
• ZY Partners Law Firm
• E-mail:
jing.he@zypartners.com
• Direct Dial: +86 10 5879 0066 ext. 273
Place photo here
Agenda
• Introduction to R&D
• Develop your R&D strategy
• Ownership of IP
• IP Licensing
• Building valuable IP portfolios
• SME case study
Introduction to R&D
• What counts as R&D?
• You do not really need a lab or a team
on the ground.
Develop an IP Strategy
•
Where is your market in your current
business model?
•
Who will be the inventors?
•
Is the technology going to be useful for other
areas?
•
Are you willing to give away your IPR in
exchange for equity?
Ownership
• Sole ownership of all the IPR by the
European SME.
• Sole ownership of all the IPR by the Chinese
business partners.
• Co-ownership, shared between the
European SME and the Chinese business
partner. Terms of the co-ownership can be
largely defined by contracts.
IP Licensing
• What is licensing?
– Where, when, and how is the IP
exploited?
Key Terms
• Territory of the Licence:
– Does the licence cover China or is it applicable
worldwide?
– Is it better to have a licence that covers a certain
specified geographical area in China?
• Duration of the Licence:
– When does the licence expire? How should it be
renewed?
– Can the licence be terminated under certain,
defined, circumstances?
Terms of License
• Licensed IP:
– Categories of IP (patent, copyrights and trade marks).
– Graphic user interface, sensitive client information, special skills.
• Licensed products covered by the Licence
– The scope of product or service depends on the business model
• Royalties:
– Lump-sum payment. – Running royalties.
– Even operate royalty-free for a certain period of time and then start charging.
Poll
Which of the following statements are false?
A. IP license is the same as IP ownership. B. IP license must define licensed IP and
licensed products/services.
C. A royalty-free license is never good for the licensor.
D. I can not license my know-how to others.
Special Issue on
Joint Development
• Chinese laws do not allow foreign companies
to obtain ownership of improvements for
free that are made by Chinese parties.
• Chinese parties must be remunerated in
some way for these inventions.
• This remuneration could be in the form of
cash, shared profits, equity interest, or other
types of property rights.
Check-List for Building an IP
Portfolio in R&D
• Quality patent drafting
• Foreign filing licence
• Filing entity
• Transfer of patents
• Registration of IP licence
• Employee remuneration
Quality Patent Drafting
• Invention patent v. utility model
• Translation issues
Foreign filing license
• What is it?
• If your inventor is a Chinese citizen, you must
get a foreign filing license if you want to file
first outside China
• Is it difficult to get the foreign license from the
State Intellectual Property Office?
Transfer of patents
• Transfer of Chinese patents to an overseas entity
need to go through extra approvals
• The way China regulates technology transfer (from
China to overseas)
– Freely tradable technology
– Catalogue of Export Restricted Technologies
– Catalogue of Export Prohibition Technologies
• For example manufacture of traditional Chinese medicine, land surveying, breeding of livestock, encryption, and computer
Remuneration for Employees
• A touchy issue for employers
• If the employer fails to specify this in a
contract with its employee, the employee may
come back to claim profits out of the
invention
• What could be said in the contract or
employment manual?
Poll
Which of the following statements
are correct?
A. I can file patents in China in English language.
B. If my Chinese engineers come up with an invention in Beijing, I can file it first in Germany.
C. If I do not pay any remuneration to my Chinese employees for their patents, I may be sued.
D. I licensed my patents to a Beijing company. I should register the licence with the government before I can transfer the royalty out of China.
Case Study
• A European SME has come up with a very unique algorithm
and prototype software in the video searching field.
• The SME has identified a promising business partner in China
with whom to conduct joint R&D.
• The purpose of the joint R&D is to launch a software product
suitable for Chinese search engines. The Chinese business
partner has a R&D team and impressive marketing capability
in China.
• The Chinese business partner is offering equity in its current
company in exchange for the IP rights to the future R&D.
• How should the IPR issues be handled?
Advice
• IP ownership
– A joint ownership in China and full ownership outside China?
• Licensing
– Potential applications other than search engines?
– Exclusive licence to the Chinese business partners for the search engine sector.
– Retain the right to use the technologies for other business applications.
• IP Portfolio
– Enter into a contract with the business partner to dictate how the patents are going to be filed.
– Define how to manage the non-patented technologies, source codes, etc.
Key Messages for SMEs
• Effective planning of your IP strategy.
• Structure IP ownership and IP
licensing.
• Implement key aspects of building IP
portfolio.
• He Jing
• ZY Partners
• E-mail:
jing.he@zypartners.com
• Direct Dial: +86 10 5879 0066 ext. 273
Place photo here
Helpdesk Guide:
Guide to R&D in China for European SMEs (new!)
http://www.china-iprhelpdesk.eu/docs/publications/EN_RnD_April-2012.pdf
Upcoming Helpdesk Events and
Webinars
Save the dates of our upcoming events and webinars
•How to Enforce
your Intellectual Property Rights in China: 15
May,
Wuxi
•How to Enforce your Intellectual Property Rights in China: 16
May,
Suzhou
•Crossing the Great Wall: Doing Business in Chinese second-tier
Cities: 17 May,
Dublin
•FinNode China Annual Conference 2012: 23 May,
Helsinki
•Business Opportunities in China: Protecting IP when
Conducting Technology Transfers to China: 24 May,
Budapest
Thank you
The China IPR SME Helpdesk provides free, confidential, business-focused advice relating to China IPR to European Small and Medium Enterprises (SMEs).
Helpdesk Enquiry Service – question@china-iprhelpdesk.eu
Training & Events Materials
Online Services - www.china-iprhelpdesk.eu
For more information please contact the Helpdesk:
Room 900, Beijing Sunflower Tower No. 37 Maizidian Street
Chaoyang District
Beijing 100125, P.R. China
