The State Intellectual Property Office recently unveiled the Registration of the Pledge of Patent Rights Measures (Decree 56 of the State Intellectual Property Office) (the Measures) which take effect on 1 October. The Administration of Registration of Pledge Contracts for Patent Rights Interim Measures introduced in 1996 will be repealed simultaneously.
The Measures govern various areas such as the particulars of a pledge contract for a patent right, the documents required for the application for registering the pledge of a patent right, the registration process, the conditions for denial, revocation and cancellation of registration as well as the disposal of a patent right during a pledge period. The Measures primarily cover the following.
- A contract for the pledge of a patent right must be concluded in writing. It can be made as a separate contract or incorporated into a principal contract as guarantee terms. It must contain particulars such as information about the parties concerned, details of the secured creditor’s rights, time limits for the performance of debts, details of the patent right and scope of the pledge guarantee. Moreover, the parties may agree in the pledge contract on relevant matters (such as the payment of an annual fee for a patent right, the transfer and licensing of a patent right and the ways to deal with cases where a patent right is declared invalid or a change occurs in the ownership of a patent right) during a pledge period, and on the delivery of relevant technical information when a patent right is pledged.
- The parties can submit application documents (scanned documents are acceptable) to the State Intellectual Property Office, which will, within seven working days from the receipt of such documents, review the same and decide on whether registration is approved or not.
- Upon the review, the State Intellectual Property Office will deny registration if it finds that an overdue annual fee remains outstanding for a patent right; or procedures have been commenced for declaring a patent right invalid; or a dispute has arisen over the ownership of a patent right; or a People’s Court has ruled that preservation measures be taken against a patent right and as a result the formalities for the pledge of the patent right are suspended; or the consent of all the co-owners of a patent right is not obtained in case of the pledge of a co-owned pledge right; or an application is being filed for registering the pledge of a patent right during a pledge period.
- During a pledge period, if the State Intellectual Property Office identifies any of the above scenarios which has not been resolved, the pledge registration of the patent right should be revoked and void ab initio. To protect the interests of a pledgee, the Measures also provide that the State Intellectual Property Office has an obligation to inform the pledgee if a patent right is declared invalid or terminated during a pledge period or if a patentee fails to pay an annual fee for a pledged patent right as prescribed.
- During a pledge period, a pledgor must provide evidence of approval from a pledgee as a precondition if the pledgor wants to surrender, transfer or license a patent right, failing which the State Intellectual Property Office will not process the relevant formalities.
Business Law Digest is compiled with the assistance of Haiwen & Partners. The authors can be emailed at baochen@haiwen-law.com. Readers should not act on this information without seeking professional legal advice.
