Licensing and technology transfer
Licensing and technology transfer can be an effective way for Australian companies to gain revenue from the Chinese market without entering China.
Trade marks, patents, designs, copyright and trade secrets can all be licensed.
Before you consider licensing you should register your intellectual property (IP) in China and conduct due diligence on the potential licensee. You should put in place a licensing contract that is enforceable in China that at the least sets out:
- the extent of the licensed IP
- who can use the IP
- territorial restrictions
- monitoring and quality supervision
- ownership of any commissioned IP
- dispute resolution.
You should register license agreements with relevant agencies to ensure its enforceability and facilitate overseas royalty payments.
Technology transfers occur with patents or trade secrets are licensed or assigned to a Chinese company. Specific Chinese laws apply to technology transfers where some technology imports are prohibited or restricted. This is a particularly legally complex area so seek expert legal advice to best manage these issues in your contracts.
Trade secrets are protected under Chinese anti-unfair competition law and can protect valuable confidential information and data.
You should identify your trade secrets and protect these using contracts with employees and commercial partners.
If you’re considering exhibiting at an international trade fair, the risks to your IP are high unless you prepare appropriately.
By registering your patents, designs and trade marks in China and other relevant markets before you exhibit your product you can avoid being vulnerable to trade mark squatters or losing the ability to secure patent or design protection.
Free trade zones
China has 11 free trade zones, which relax some foreign investment restrictions, taxes and regulation requirements. When operating in a free trade zone you still need to register key IP and avoid infringing on other’s IP rights.
- Read our guide on protecting your IP in China.
- The EU IPR SME helpdesk offers detailed information and guidance on specific IP in China topics.