On 21 December 2023 the State Council published the Decision on Amending the Implementing Regulations of the Patent Law (State Council Decree No. 769), effective 20 January 2024. The decision was signed on 11 December and aligns the implementing rules with the Patent Law revised in 2020.
For innovative companies, the amendments are not merely procedural. They translate patent utilisation, employee-inventor incentives and international filing into operable rules.
Open licensing
The open licensing system allows a patent holder to declare willingness to license its patent and specify how royalties are paid. The rules address declaration, withdrawal, recordal and payment.
For patent holders, open licensing lowers negotiation costs but makes terms public and withdrawal restricted. Companies should assess before declaring whether the licensing scope is clear, the royalty reasonable and whether exclusive licences or assignments are already in place.
Rewards for employee inventions
The rules specify rewards and remuneration for employee inventions, including standards, calculation methods and the priority of agreed terms. Companies may set rewards through policies or contracts, but the terms must be reasonable and cannot effectively deprive inventors of their rights.
Technology companies should check whether employment contracts, IP ownership agreements and inventor-reward policies are consistent, whether rewards are actually paid and how departing employees’ inventions are handled.
International design registration
To align with the Hague Agreement, the rules address international design registration applications. For companies filing designs in China and abroad, the international route can handle procedures across jurisdictions.
Companies should watch designated states, priority, responses to examination opinions and linkage with domestic rights. International registration does not automatically confer domestic protection; domestic procedures still apply.
Term compensation and review
The rules refine patent term compensation and review/invalidation procedures. Term compensation concerns unreasonable delay in invention patent grants and, for certain products such as pharmaceuticals and medical devices, delays in regulatory approval. Companies should retain evidence of filing, examination and approval timelines.
Four steps for companies
First, update IP management policies to cover open licensing, employee-invention rewards, international registration and term compensation.
Second, review contract clauses. R&D cooperation, commissioned development and employee-invention ownership and reward terms should match the amended rules.
Third, maintain a patent ledger recording filing date, grant date, annuities, licences, pledges and assignments to avoid loss of rights through administrative oversight.
Fourth, note the effective date. The amendments apply from 20 January 2024, and transitional questions for pending applications and granted patents should be checked in advance.
For patent strategy and licensing, see our intellectual property service; for overseas filings and rights linkage, see overseas IP; for technical secrets and R&D cooperation, see trade secrets.
This article is based on the Decision on Amending the Implementing Regulations of the Patent Law published by the State Council on 21 December 2023. It is for reference only and does not constitute legal advice.