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China’s State Council releases new rules on external intellectual property rights transfers

China’s State Council releases new rules on external intellectual property rights transfers

The State Council of China recently
issued
a notice on the approval of trial working rules on external
transfers of intellectual property rights (IPR). The new guidelines tighten
scrutiny over IP transfers to foreign investors.

Technology exports and international acquisitions will be subject to checks under new guidelines to safeguard China’s
key public interests.

According to the official announcement, the new rules are
made to “improve the national security system, protect the public interest, and
regulate external transfers of IPR”.

The document listed an investigation mechanism that covers
external transfers of IPR such as patent rights, exclusive rights to layout
designs of integrated circuits, computer software copyrights, and new plant
variety rights. These may occur in the process of technology export, and
foreign investors’ acquisition of Chinese enterprises.

"To establish and perfect the review mechanism for IP
transfers overseas is not a move to upset foreign investors,”  said Zhang Zhicheng, Director of the Protection
and Coordination Department at the State Intellectual Property Office of China
(SIPO), as reported by Xinhua news
agency.

“The guideline has rather formulated concrete measures to secure
a better business environment," he added.

The external transfer of IPR mentioned in the document means
Chinese units or individuals can transfer their domestic IPR to foreign
enterprises, individuals or other groups. This includes the transfer of IPR
owners, actual IPR controllers, and the exclusive license of IPR.

The influence of external IPR transfers on China’s national
security and the core technology innovation in China’s key fields will be
investigated, according to the document.

The working rules do not apply to cases involving national
defense security.

When China joined the World Trade Organization (WTO) in
2001, it entered into the Agreement
on Trade-Related Aspects of Intellectual Property Rights
to bring its IP
laws to an international level.

The official document can be read here (Chinese only).

Feature image: Nick Youngson CC BY-SA 3.0 ImageCreator