(Adopted
on June 23, 1987 by the 21st Session of the Standing
Committee of the 6th National People's
Congress)
CHAPTER I General Principles
Article 1. This Law is formulated in order to
give impetus to scientific and technical development, to
promote the service of science and technology for the
construction of socialist modernization, to protect the
legitimate rights and interests of the parties to technology
contracts and to maintain order in the technology market. Article 2. This Law applies to contracts
made between legal persons, between legal persons and
citizens, and between citizens, which establish civil rights
and obligations in technical development, technology
transfer, technical consultancy and technical service. It
does not apply however, to contracts in which one party is a
foreign enterprise, other foreign organization or foreign
individual.
Article 3. The formation of a
technology contract shall be in conformity with laws and
regulations, be of benefit to the progress of science and
technology and accelerate the application and dissemination
of scientific and technical results.
Article
4. The formation of a technology contract shall conform to
the principles of voluntary participation and equality.
mutual benefit and compensation, and trust and integrity.
Article 5. Where the content of a technology
contract touches on national security, or where the greater
interest demands confidentiality, this shall be handled in
accordance with the relevant State regulations.
Article 6. Technical results arising out of
the execution of a unit's tasks or as a result mainly of the
utilization of the material technical resources of a
particular unit shall be professional technical results. The
right to utilize and transfer professional technical
results. The right to utilize and transfer professional
technical results lies with the unit concerned, which has
the right to conclude technology contracts relating to those
professional technical results. The unit shall reward the
individual responsible for achieving the said technical
results in accordance with the income obtained by the unit
through the utilization or transfer of the professional
technical results.
The right to utilize and
transfer non-professional technical results lies with the
individual responsible for achieving those results, who
shall have the right to conclude technology contracts
relating to the non-Professional technical results.
Application for patent and the award of patent
rights with regard to professional or non-professional
technical results shall be handled in accordance with the
Patent Law and relevant regulations.
An
individual responsible for achieving technical results shall
have the right to state clearly on documents relating to the
technical results that he is the person responsible for
achieving them, and shall have the right to obtain a
certificate of honor and a reward.
Article 7. The relevant State Council
department in charge and the people's governments of the
provinces, autonomous regions and directly administered
municipalities shall have the right as required by the
national and common social interest, to decide upon the
dissemination to and utilization by designated units of
non-patented technical results of major significance
achieved by units under the ownership of the whole people,
which fall within their particular system or scope of
jurisdiction. A unit utilizing technical results has the
responsibility to maintain the confidentiality of those
results. The utilizing unit shall pay a fee for use in
accordance with the agreement between the two parties. If
the two parties are unable to reach an agreement, the
designating organ shall determine a reasonable fee.
The dissemination for use of non-patented
technical results achieved by collectively-owned units or by
individuals, which are of major significance to the national
or common social interest, shall, where necessary, by
handled in accordance with the aforementioned provisions,
following approval by the relevant State Council department
in charge.
Article 8. The bodies responsible
for administering technology contracts shall be stipulated
by the State Council.
CHAPTER II Formation, Performance, Modification And Termination
of Technology Contracts
Article
9. The formation, modification and termination of a
technology contract shall all be in written form.
Article 10. A technology contract shall be
formed once the parties affix their signatures or personal
seals to the contract. Where State regulations require
approval by relevant organs, the contract shall be formed
from the time of approval.
Article 11. The
parties may stipulate guarantees for technology contracts. A
contract under which a third party is guarantor shall be
formed once the guarantor and guarantee affix their
signatures or personal seals to the contract.
Article 12. The price or remuneration in a
technology contract and its method of payment shall be
stipulated by the parties to the contract.
Article 13. A party may appoint an agent to
form a technology contract on his behalf. The appointing
party shall provide the agent with a power of attorney. The
agent shall, within the scope of authority granted to him by
the appointing party, conclude a contract in the name of the
appointed party.
Article 14. Any body which
provides introductory services in the formation of a
technology contract which complies with the provisions of
this Law and abides by the principle of trust and integrity
may accept reasonable compensation therefor.
Article 15. The articles of a technology
contract shall be stipulated by the parties. They shall
generally include the following items:
(1)
Name of the project;
(2) Content, scope and
requirements of the object of the contract;
(3) Performance plan, progress projection,
duration, place, and method of performance;
(4) Confidentiality of technical information
and data;
(5) Liability for risk;
(6) Ownership and Sharing of technical
results;
(7) Standard and method of
acceptance;
(8) Price or remuneration and
method of payment;
(9) Method of calculation
of penalties or damages;
(10) Dispute
resolution method;
(11) Definition of names
and technical terms.
Technical background
material relevant to the performance of the contract, and
feasibility and technical evaluation reports, project task
and planning documents, as well as drawings, tables, data
and photographs may, as agreed between the parties, form an
integral part of the contract.
Article 16. A
technology contract formed in accordance with the law shall
immediately become legally binding. The parties shall
perform their duties fully as stipulated in the contract.
One party may not, of its own accord, modify or terminate
the contract.
Article 17. If one party fails
to execute a technology contract or if their performance of
their contractual obligations does not conform to the
stipulated conditions, thereby rendering them in breach of
contract, the other party shall have the right to demand
performance or to adopt remedial measures, as well as have
the right to demand damages.
The liability for
compensation by the party in breach of contract shall be
equivalent to the loss suffered by the other party as a
result of the breach, but shall not exceed the amount which
should have been foreseen by the party in breach at the time
of forming the contract.
The parties may agree
in the contract that if one party is in breach of contract
it shall pay a stipulated monetary penalty to the other
party. They may, alternatively, stipulate a method for the
calculation of damages.
A party which suffers
a loss as a result of breach of contract by the other party
shall promptly take appropriate steps to prevent the loss
form increasing. Should it fail to promptly take appropriate
action, thereby causing an increase in the loss, it shall
not have the right to demand compensation for the additional
loss.
Article 18. If all parties are in breach
of contract, they shall all bear equivalent liability.
Article 19. If one party is unable to fulfil
its contractual obligations as a result of the actions of a
higher authority it shall, as stipulated by the contract,
compensate the other party for damages or adopt other
remedial measures, after which higher authority shall be
responsible for dealing with the loss incurred in doing so.
Article 20. If a party is unable to perform a
technology contract for reasons of force majeure, it shall
be relieved form its liability for non-performance.
Article 21. The following technology contracts
shall be invalid:
(1) Those which violate the
law or regulations or which are harmful to the national or
common social interest;
(2) Those which
illegally monopolize or obstruct the progress of technology;
(3) Those which violate another's legitimate
rights or interests; and
(4) Those concluded
by way of deception or coercion.
An invalid
contract shall have no legally binding force from the time
it is made. The invalidity of a portion of a contract shall
not affect the remainder of the contract which shall retain
its validity.
Article 22. If the formation of
a technology contract which violates the law or regulations
or which is harmful to the national or common social
interest involves an illegal activity, administrative or
criminal liability shall be investigated and determined in
accordance with the law.
Article 23. If the
parties are in unanimous agreement, a technology contract
may be modified or terminated.
The
modification or termination of a contract approved by a
relevant organ shall be agreed to by the original approving
body.
Article 24. If any one of the following
circumstances arises, rendering the performance of a
technology contract unnecessary or impossible, one party
shall have the right to notify the other party of
termination of the contract:
(1) Breach of
contract by the other party;
(2) Force
majeure;
(3) Public disclosure by another
person of the specific technology of a technical development
contract.
Article 25. The modification or
termination of a contract shall not affect the rights of the
parties to demand damages.
Article 26. Within
the period of validity of a technology contract, one party
may not, without the agreement of the other party, transfer
its rights or obligations in whole or in part to a third
party.
CHAPTER III Technical Development Contracts
Article 27. A technical
development contract refers to a contract concluded between
parties for the research and development of new technology,
products, new processes, new materials and their systems.
Technical development contracts include
commission development contracts and co-operative
development contracts.
Article 28. A
commission development contract refers to a contract under
which one party commissions another party to engage in
research and development.
The primary
obligations of the commissioning party shall be:
(1) To pay research and development fees and
remunerations as stipulated by the contract;
(2) To provide technical material and original
data and to co-operate in the completion of tasks as
stipulated by the contract; and
(3) To take
delivery on time of the results of the research and
development.
The primary obligations of the
party undertaking the research and development shall be:
(1) To formulate and implement a research and
development plan;
(2) To make reasonable use
of research and development funds; and
(3) To
complete research and development and hand over the results
of the research and development on time, to provide relevant
technical data and necessary technical guidance and to
assist the commissioning party to gain an understanding of
the results of the research and development.
Article 29. If the commissioning party is in
breach of contract, thereby causing disruption, delay or
failure of the research and development work, it shall pay a
penalty or damages.
If the party undertaking
the research and development is in breach of contract,
thereby causing disruption, delay or failure of the research
and development work it shall, in addition to adopting
remedial measures for the continued performance of the
contract, pay a penalty or damages. Where failure of the
research and development is caused, the party shall refund
all or part of the fee or remuneration for research and
development and shall pay a penalty or damages.
Article 30. A co-operative development
contract refers to a contract concluded between parties for
the purposes of joint research and development.
The primary obligations of all parties to a
co-operative development contract shall be:
(1) To invest (including the provision of
technology as investment) as stipulated by the contract;
(2) To share research and development work as
stipulated by the contract; and
(3) To
co-operate and co-ordinate with the other parties to the
contract
Article 31. If any one of the various
parties to co-operative development is in breach of the
contract, thereby causing disruption, delay or failure of
the research and development work, it shall pay a penalty or
damages.
Article 32. The principles of
ownership and sharing of technical results arising out of
the performance of a technology contract are as follows;
(1) The right to apply for patent of a
discovery or invention which results from commissioned
development shall, unless otherwise stipulated by the
contract, lie with the party which undertook the research
and development. If the party which undertook the research
and development obtains patent rights, the commissioning
party may implement the patent free of charge.
If the party which undertook the research and
development transfers its right to apply for patent of its
discovery or invention, the commissioning party may have the
right of first refusal of such transfer.
(2)
The right to apply for patent of a discovery or invention
which results from co-operative development shall, unless
otherwise stipulated by the contract, lie jointly with the
parties to the joint development. If one party transfers its
joint rights of patent application, the other party or
parties may have the right of first refusal of such
transfer.
If one party to co-operative
development declares the relinquishment of its jointly-held
patent application right, the other party may submit a sole
application, or the other parties may submit a joint
application. Once a patent right is granted, the party which
relinquished its patent application right may implement the
patent free of charge.
If one party to a
co-operative development does not agree to the patent
application, the other party or other parties shall not be
allowed to submit a patent application.
(3)
The rights to utilize and transfer non-patented technical
results of commissioned or co-operative development, as well
as details of the method of distribution of profit shall be
stipulated by the parties in the contract. If the contract
contains no stipulation, all parties shall have the right to
utilize or transfer the technical results. The party
commissioned to undertake the research and development may
not, however, transfer the results of the research and
development to a third party prior to handing those results
over to the commissioning party.
Article 33.
The parties shall stipulate in the contract the liability
for risk in the case of total or partial failure of the
research and development due to insurmountable technical
difficulties during the performance of a technology
development contract. If the contract contains no
stipulation, the parties shall each bear a reasonable share
of the liability.
If one party discovers the
existence of one of the abovementioned circumstances which
could lead to the total or partial failure of the research
and development, it shall promptly notify the other party
and adopt appropriate measures to reduce the loss. If one
party fails to promptly notify the other party and to adopt
appropriate measures, thereby causing an increase in the
loss, it shall bear liability for the additional loss.
CHAPTER IV Technology Transfer
Contracts
Article 34. A
technology transfer contract refers to a contract concluded
between parties for the transfer of a patent, transfer of
patent application rights, a licence to implement a patent
or for the transfer of non-patented technology.
Article 35. A technology transfer contract may
stipulate the scope of patent implementation or utilization
of non-patented technology by the transferor and transferee.
The terms of the contract may not be used however, to
restrict technological competition or development.
Article 36. The formation of a contract for
the transfer of patent rights or of patent application
rights shall conform to the Patent Law and relevant
regulations.
Article 37. The primary
obligations of the transferor in a contract of licence to
work a patent shall be:
(1) To permit the
transferee to work the patent within the scope stipulated by
the contract; and
(2) To hand over technical
data relevant to the working of the patent and to provide
the necessary technical guidance.
The primary
obligations of the transferee in a contract of licence to
work a patent shall be:
(1) To work the patent
within the scope stipulated by the contract and to not
permit a third party not included in the contract to work
the said patent; and
(2) To pay royalties as
stipulated by the contract.
Article 38. a
technology transfer contract which involves a patent shall
clearly specify the name of the discovery or invention, the
patent applicant and the patentee, the date and number of
the application and the period of validity of the patent
right.
A contract of licence to work a patent
shall be valid only for the term of validity of the patent
right. Upon the expiry of the validity of the patent right,
or following declaration of the patent right as invalid, the
patentee shall not conclude with another person a contract
of licence to work the said patent.
Article
39. The primary obligations of the transferor in a contract
for the transfer of non-patented technology shall be:
(1) To provide technical data and carry out
technical guidance as stipulated by the contract;
(2) To guarantee the applicability and
reliability of the technology;
(3) To
undertake the obligation of confidentiality as stipulated by
the contract.
The primary obligations of the
transferee in a contract for the transfer of non-patented
technology shall be:
(1) To utilize the
technology within the scope stipulated by the contract;
(2) To pay fees for use as stipulated by the
contract;
(3) To undertake the obligation of
confidentiality as stipulated by the contract.
Article 40. If the transfer is in breach of
contract, it shall undertake liability as follows:
(1) If the party does not transfer the
technology as stipulated by the contract it shall, in
addition to refunding all or part of the fee for use, pay a
penalty or damages.
(2) If the party works a
patent or utilizes non-patented technology beyond the scope
stipulated in the contract, or breaches the contract by the
unauthorized granting to a third party of licence to work
the said patent or utilize the non-patented technology, it
shall cease the action which is in breach of contract and
shall pay a penalty or damages.
(3) If the
party is in breach of the contractual obligation of
confidentiality, it shall pay a penalty or damages.
Article 41. If the transferee is in breach of
contract, it shall undertake liability as follows:
(1) If it fails to pay the fee for use as
stipulated by the contract, it shall make up the fee and, in
addition, pay a penalty as agreed in the contract. If it
fails to make up the fee or pay a penalty, it must cease to
work the patent or to utilize the non-patented technology,
return the technical data and pay a penalty or damages.
(2) If it works a patent or utilizes
non-patented technology beyond the scope stipulated in the
contract, or if it, without the agreement of the transferor,
grants licence to a third party to work the patent or
utilize the non-patented technology, it shall cease the
action which is in breach of contract and shall pay a
penalty or damages.
(3) If it is in breach of
the contractual obligation of confidentiality, it shall pay
a penalty or damages.
Article 42. If the
violation of another person's legitimate rights or interests
is caused by the transferee's working of a patent or
utilization of non-patented technology, the transferor shall
undertake liability.
Article 43. The parties
may, in accordance with the principle of mutual benefit,
stipulate in the contract a method of sharing ongoing
improvements to technical results following the working of a
patent or the utilization of non-patented technology. If the
contract contains no stipulation, no one party has the right
to share the ongoing improvements to the technical results
of another party.
CHAPTER V Technical Consultancy Contracts And Technical Service
Contracts
Article 44. A
technical consultancy contract refers to a contract
concluded for the supply by one party to another party of
feasibility evidence, technical calculations and the
findings of specialist technical surveys and analysis and
evaluation relating to specified technical project.
Article 45. The primary obligations of
commissioning party in a technical consultancy contract
shall be:
(1) To clearly state the problem for
consultancy and to provide technical background material and
relevant technical data and figures as stipulated by the
contract;
(2) To accept on time the results of
the work of the advising party and to pay remuneration.
The primary obligations of the advising party
in a technical consultancy contract shall be:
(1) To utilize its own technical knowledge to
complete a consultancy report as stipulated by the contract
or to answer the questions of the commissioning party;
(2) To submit a consultancy report which meets
the requirements stipulated in the contract.
Article 46. If the commissioning party in a
technical consultancy contract fails to provide the
necessary figures and data as stipulated by the contract,
thereby affecting the progress and quality of the work, it
may not recover that remuneration already paid and shall pay
in full any remuneration still owed.
If the
advising party in a technical consultancy contract fails to
submit its consultancy report on time, or if the report
submitted does not conform to the stipulations of the
contract, it shall receive a reduced remuneration or no
payment and shall pay a penalty or damages.
Any loss suffered by the commissioning party
in a technical consultancy contract as a result of a
decision taken on the basis of a consultancy report or
opinion provided by the advising party in conformity with
the requirements of the contract shall be borne by the
commissioning party, unless otherwise stipulated by the
contract.
Article 47. A technical service
contract refers to a contract under which one party uses its
technical knowledge to resolve a specified technical problem
for another party. It does not include contracts for
construction engineering survey, design or construction, for
installation or for contract processing.
Article 48. The primary obligations of the
commissioning party in a technical service contract shall
be:
(1) To provide working conditions and
complete complementary tasks to facilitate the service, as
stipulated by the contract;
(2) To accept on
time results of the service work and to pay remuneration.
The primary obligations of the service party
in a technical service contract shall be:
(1)
To complete the contractually stipulated service task on
time, to resolve the technical problem and to guarantee the
quality of the work;
(2) To transfer the
knowledge used to solve the technical problem.
Article 49. If the commissioning party in a
technical service contract is in breach of contract,
affecting the progress and quality of the work and does not
accept or is late in accepting the results of the service
work, it shall pay the remuneration in full.
If the service party in a technical service
contract fails to complete its service as stipulated by the
contract, it shall not be paid and shall pay a penalty or
damages.
Article 50. Any new technical results
achieved by the advising party or service party during the
performance of a technical consultancy or technical service
contract and utilizing technical data and work facilities
supplied by the commissioning party shall belong to the
advising party or the service party. Any new technical
results achieved by the commissioning party by utilizing the
results of the work of the advising party or the service
party shall belong to the commissioning party, unless
otherwise stipulated by the contract.
CHAPTER VI Arbitration And
Litigation of Technology Contract Disputes
Article 51. Disputes arising from technology
contracts may be resolved by the parties through
consultation or mediation. If the parties are unwilling or
unable to resolve the dispute through consultation or
mediation they may, in accordance with the arbitration
clause of the contract or a subsequently concluded
arbitration agreement, request arbitration by an arbitral
organ stipulated by the State.
If one party
fails within the designated time to perform the terms of an
arbitration award granted by the arbitral body, the other
party may apply to a people's court for enforcement of the
award.
If the parties have not included an
arbitration clause in the contract and have not subsequently
concluded an arbitration agreement, they may initiate
litigation in a people's court.
Article 52.
The period of limitation of actions with regard to disputes
arising from a technology contract and the limit for
application for arbitration shall be one year, to be
calculated from the day a party becomes aware or should
become aware of the violation of its legitimate rights or
interests.
CHAPTER VII Supplementary Provisions
Article 53. The Economic
Contract Law shall not apply to technology contracts formed
after the implementation of this Law.
Article
54. The State Council departments in charge of science and
technology may formulate implementing rules on the basis of
this Law. These implementing rules shall be implemented
following approval by the State Council.
Article 55. This Law shall come into force on
November 1, 1987.
( In case of
discrepancy, the original version in Chinese shall prevail..)
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