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Interim Provisions on Administering Intellectual Property Right in Relation to International Cooperation Projects in Science and Technology 2006-11-29

Circular of the Ministry of Science and Technology on the Printing and Distribution of the Interim Provisions on Administering Intellectual Property Right in Relation to International Cooperation Projects in Science and Technology
Guo Ke Fa Wai Zi [2006] No. 479

The departments (commissions or bureaus) of each province, autonomous region, municipality directly under the Central Government, city specifically designated in the State plan, sub-provincial city, Science and Technology Bureau of Xinjiang Production and Construction Corps, each ministry and commission under the State Council, and each science and technology administrative department of the institutions directly under the Ministry of Science and Technology,

In order to improve the awareness of protecting intellectual property right and reinforcing the management of intellectual property right in the international cooperation in science and technology is an important task to protect the interests of the state, enhance the ability of independent innovation and safeguard the creative achievements of the Chinese party. For the purpose of delimiting the principles and measures for the settlement and management of intellectual property right problems in relation to the international cooperation projects in science and technology, properly solving the problems in relation to intellectual property right, safeguarding the lawful rights and interests of all parties concerned to the cooperation, promoting the development of international cooperation and exchange in science and technology and accelerating the construction of the national innovative system, the Ministry of Science and Technology constituted the Interim Provisions on Administering Intellectual Property Right in Relation to International Cooperation Projects in Science and Technology. They are hereby printed and distributed to you, please earnestly comply with and implement them.

The Ministry of Science and Technology
November 29, 2006

With a view to earnestly implementing the Decision of the CCCPC and the State Council on Implementing the Outline of the Scientific and Technological Plan and Strengthening the Independent Innovation Capacity (Zhong Fa [2006] No. 4 ) and the National Guideline for Medium and Long-term Plan for Science and Technology Development (2006-2020), further reinforcing the management and protection of intellectual property right in the international cooperation in science and technology and safeguarding the rights and interests in relation to the intellectual property right of all parties concerned to the cooperation, the present Provisions are constituted.

1. To strengthen the management and protection of intellectual property right in the negotiations and talks for the protocols and agreements on international cooperation projects in science and technology, and the acceptance and execution of applications for, evaluation, check, supervision and inspection of international cooperation projects in science and technology.

The related entities and individuals, in charge of or participating in the negotiations, management and execution of international science and technology cooperation protocols and agreements as well as international science and technology cooperation projects, shall, according to the present Provisions, earnestly perform the work duties in relation to intellectual property right and do a good job in managing and protecting intellectual property rights in the international cooperation projects in science and technology.

2. The present Provisions shall apply to the following international cooperation projects in science and technology:
(1) The international inter-governmental cooperation projects in science and technology under the international science and technology cooperation protocols as entered into between the Ministry of Science and Technology, on behalf of the Chinese Government, and foreign governments or international organizations;
(2) The international cooperation projects in science and technology under the international science and technology cooperation protocols as entered into between the related departments under the State Council and the departments of foreign governments, and those under the international cooperation projects in science and technology as entered into between the provincial people’s governments and the state governments of foreign countries; and
(3) The international cooperation projects in science and technology initiated under the national scientific research plan and other international cooperation projects in science and technology funded by the state treasury.

3. The Ministry of Science and Technology shall take charge of managing and protecting intellectual property right in relation to the international cooperation in science and technology. Other related departments under the State Council and all provincial people’s governments shall take charge of managing and protecting intellectual property right in relation to the international cooperation projects in science and technology organized and executed by the present departments or regions, respectively.

4. All related departments of the State Council, all provincial people’s governments and the institutions in charge of executing and managing the projects upon their authorization or entrustment (hereinafter referred to as the project management departments) shall adopt effective measures to direct the enterprises, scientific research institutes, colleges and universities to do a good job in protecting and managing intellectual property rights in relation to the international cooperation projects in science and technology, reasonably arrange the intellectual property right relationship with other cooperators, properly solve the intellectual property right problems occurring during the cooperation process, and accelerate the process to make scientific research achievements with independent intellectual property right.

5. An entity to undertake any international cooperation project in science and technology (hereinafter referred to as the "entity to undertake the project") shall set up and perfect the rules on managing intellectual property right, input more funds for the work of intellectual property right, set up a special institution for the work of intellectual property right, equip with full-time personnel or entrust an intermediary service institution of intellectual property right to be responsible for the management and protection of intellectual property rights and enhance the ability and level to solve the matters of intellectual property right in relation to the international cooperation projects in science and technology so as to effectively protect the legitimate rights and interests of the Chinese party.

6. To handle any intellectual property right problem occurring in the international science and technology cooperation, the Chinese party shall abide by the principle of equality and reciprocity, observing the agreement and keeping commitments and shall comply with the laws and regulations of China on intellectual property right, as well as the international conventions or bilateral treaties concerning the protection of intellectual property right, to which China acceded or which were entered into between China and other cooperative countries.

7. The related entities in charge of the talks in relation to the international inter-governmental science and technology cooperation agreements, international science and technology cooperation agreements between the provincial people’s governments and the state governments of foreign countries, as well as the international cooperation projects in science and technology shall, in accordance with the specific information about the fields and projects to conduct international science and technology cooperation, advance the principle and specific plan on the talks about the intellectual property right by themselves or entrusting an intermediary institution of intellectual property right or experts to do so, and take such principle and specific plan as a basis for the talks and for the determination of intellectual property right problems in relation to the international science and technology cooperation.

8. When entering into an international inter-governmental science and technology agreement, international science and technology cooperation treaty between a related department under the State Council and a department of a foreign country or between a provincial people’s government and a foreign state, the Chinese party shall arrange in advance the intellectual property right problems in relation to the international science and technology cooperation, shall negotiate with the foreign cooperator and stipulate an intellectual property right clause or conclude a separate intellectual property right treaty, which shall definite the basic principles for the ownership and utilization of intellectual property rights in relation to the research achievements, so as to guarantee that our country can effectively grasp and reasonably share the cooperative research achievements as well as the rights and interests of the relevant intellectual property rights.

9. In respect to an international cooperation project in science and technology whereby the Chinese party is asked to obtain the independent intellectual property rights or to satisfy the technological indicators, the entity applying for the international science and technology cooperation shall, in the project proposal, explicitly specify the specific aim of intellectual property right, details of the cooperation with the foreign party, as well as the plan on sharing and utilizing the intellectual property right, which shall include the type, quantity and stage of the intellectual property right to be obtained through research and development, and the basis for searching and analyzing the intellectual property right.

10. A project management department shall take the situation about the establishment of rules on managing intellectual property right, set-up of working institution of intellectual property right, fit-out of funds for the work of intellectual property right, etc. as one of the important indicators for selecting and determining any international cooperation project in science and technology and entity to undertake the project, and shall, in the task document or project contract as entered into between it and the undertaking entity, explicitly stipulate such items as the specific aims of intellectual property right in relation to the project, protection form, ownership and sharing of rights to be enjoyed by the Chinese party and the foreign cooperator, the management duties of the entity to undertake the project and so on.

11. When a project cooperation agreement is concluded between the entity to undertake the project and the foreign cooperator, they shall constitute a specific clause on the intellectual property right or both parties shall agree separately on the intellectual property right so as to definite the ownership of the intellectual property rights in relation to or arising during the cooperation, distribution of the related rights and interests, liabilities for breach of contract, settlement of disputes, etc., and shall report it to the project management department for archival filling through the original project application channel.

In case any foreign export is hired by way of wage payments during the course of execution of the project, it shall be stipulated that the intellectual property rights in relation to the intellectual labor achievements made by this export during his working in China belong to the employing entity and that the person who makes the achievements has the right of identity and the right of honor. If it is necessary for the entity undertaking the project to assign any employee to do research in the foreign cooperator, a confidentiality agreement shall be signed with him to guarantee that the secrets of the state and the technical secrets of this entity will not be released.

12. During the course of executing the international cooperation project in science and technology, the entity undertaking the project shall, in accordance with the present Provisions and the requirements of the task document or project contract it concludes, perform the intellectual property right management duties, adopt necessary measures for managing intellectual property right, go through the application, registration and other formalities for protecting intellectual property rights in a timely manner so as to protect the various research achievements made in different stages in the execution of the project in a timely, precise and effective way.

13. When organizing the check and acceptance of the project, the project management department shall, in accordance with the needs, employ some intellectual property right experts or entrust an intermediary institution of intellectual property right to assess the management and protection of the intellectual property rights in relation to the project.

14. The ownership of the intellectual property right in any research achievement as achieved in an international science and technology cooperation shall be determined in accordance with the stipulations in the cooperation agreement as entered into between the cooperating parties. The right to apply for a patent and other rights in relation to the intellectual property right usually belong to cooperating parties in common and may be handled by following the principles as follows:
(1) If any cooperating party applies for a patent within its own country on behalf of all cooperating parties and allows others to use the patent after the patent is obtained, the economic benefits that are derived therefrom shall be distributed in accordance with the proportions as stipulated in the agreement.
(2) When applying for a patent, the sequential order of the persons making the achievement shall be arranged in accordance with their respective share of contribution. Where it is difficult to clarify their respective share of contribution, when a cooperating party applies for a patent within its own country, it may grant the first position to the person of its party, who has made the achievement; when applying for a patent in a third country, both parties shall decide through negotiation, or the grant the first position to the person who has made achievement and who works for the party that assumes the patent application fee and maintenance fee.
(3) If any of the cooperating parties waives the right to apply for a patent, the other party may apply independently, or the other parties may jointly apply. After a patent is granted, the party that waives the right to apply for the patent may execute the patent right without paying any loyalty.
(4) In case either or any of the cooperating parties does not agree to apply for a patent with adequate reasons, the other party or other parties should not apply for the patent.
(5) In case either or any of the cooperating parties transfers the jointly owned right to apply for patent or the jointly owned patent, it shall inform the other cooperating party or parties, and the other cooperating party or parties has or have the priority to acquire it.
(6) In case any of the cooperating parties signs a patent licensing contract with a third party, it shall obtain the consent of the other parties in advance and shall determine the loyalties jointly with the other cooperative parties,. All cooperating parties shall, in accordance with their agreement, rationally share the economic benefits derived therefrom.
(7) When determining their respective proportion of share of the patent loyalties, the human resources, funds, apparatus, equipment and information materials that are provided by each cooperating party shall be taken into consideration.

15. As regards any research achievement as made in an international cooperation project in science and technology and the intellectual property right formed therefrom, the part belonging to the Chinese party shall be granted to the entity undertaking the project according to the Several Provisions on Administering Research Achievements and Intellectual Property Rights Formed in Projects under the State Scientific Research Plan (Guo Ban Fa [2002] No. 30), unless it involves in the state security, state interests or significant social public benefit or unless it is otherwise stipulated in the task document, project contract or cooperation agreement. The state has the right to gratuitously use, exploit, efficiently utilize the intellectual property rights of research achievements and obtain gains therefrom under a special circumstance.

An entity undertaking a project may independently decide to execute, permit others to execute, transfer the research achievement or intellectual property, ascertain a price for it and convert the price into shares, and obtain corresponding gains. However, where it is necessary to transfer abroad the research achievements or intellectual property, an application shall be filed to the project management department through the original project application channel to obtain its consent.

16. An entity undertaking an international cooperation project in science and technology may apply for paying the expenses for the affairs in relation to intellectual property right including the fees which the Chinese party needs to pay for the patent application and other affairs in relation to intellectual property right during the course of project research and development with the project fund budget.

17. After the entity undertaking a project obtains the intellectual property rights in the research achievements as made in an international cooperation project in science and technology, it shall, within 1 month as of its receipt of the patent certificate, registration certificate of new species of plant, software registration certificate, trademark registration certificate and other definite right certification documents, submit a written report of the intellectual property rights it obtains to the project management department.

18. As regards any intellectual property right dispute occurring during the execution of an international cooperation project in science and technology, the entity undertaking a project shall, within 1 month as of the settlement of the dispute, submit a written report of the relevant information to the project management department.

19. A project management department shall take charge of supervising and inspecting the entities undertaking international cooperation projects in science and technology in terms of management and protection of intellectual property rights.

Where the entity undertaking the project disobeys the present Provisions, the project management department shall, in accordance with the statutory power and by considering different circumstances, order it to make corrections, give it a warning, criticize it by circulating a notice, terminate the project contract, ask for repayment of the fund allocated, or refuse to accept its applications for undertaking international cooperation projects in science and technology within a certain time limit. In case it goes against any discipline, it may suggest the department concerned to give it a disciplinary sanction. Where any crime is constituted, it shall transfer it to the judicial organ for criminal liabilities.

20. The related departments under the State Council and the people’s governments of each province shall constitute some necessary detailed implementation rules or specific management measures according to the present Provisions.

21. With regard to any project that is excluded out of the international cooperation projects in science and technology or projects under the national science and research plan, where it is necessary to carry out international science and technology cooperation and exchange, the management and protection of intellectual property rights therein shall be reinforced in accordance with the present Provisions.

22. The present Provisions shall go into effect as of the promulgation date.