Feb. to June 2014 China Bulletin

In August, 2012, the China State Intellectual Property Office (SIPO) issued draft regulations that would have added substantial new administrative burdens and legal uncertainty to compensation for service inventions. However, in June, 2013, the Shanghai High People’s Court issued Guidelines (Shanghai Service Inventions Opinion, Aug.-Sept. 2013, China Bulletin) that employers favored for providing reassurance and certainty. Recently in April, SIPO, issued an updated revision of the draft regulations that retain problematic provisions, such as mandating compensation for technological secrets and know how that are not patented (see English Translation). In addition, they increase the compensation to employee-inventors to twice the average monthly wage in the company and 5% of the benefits realized by the company from exploitation of the invention, although the parties are still permitted to supersede the statutory requirements by agreement. People’s Courts in Shanghai reportedly continue to refer to the Guidelines of the Shanghai High People’s Court, indicating differing views on how service inventions should be handled.

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