On 22 June 2016, the Ministry of Science and Technology, the Ministry of Finance and the State Administration of Taxation (SAT) jointly issued the revised Working Guidelines for the Recognition and Administration of High and New Technology Enterprises (HNTE) (notice No. 195) to implement the new HNTE recognition rules issued earlier this year under the Administrative Measures on the Recognition of High and New Technology Enterprises (notice No. 32).
IP requirement. Notice No. 195 restates the intellectual property (IP) ownership requirement under notice No. 32. It requires an enterprise to own the core IP in its main products or services for the enterprise to qualify as an HNTE. When an IP is jointly owned by two or more enterprises, only one of them can use the IP to apply for HNTE status.
Notice No. 195 further classifies IP into two categories:
- Type I covers invention patents, exclusive rights over integrated circuit layout/design, new plant varieties, etc.; and
- Type II covers utility model and design patents and software copyright (excluding trademark).
An enterprise can only use a particular piece of Type II IP once when applying for HNTE status. There is no such limitation on Type I IP.