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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II TECHNOLOGY DEVELOPMENT CONTRACTS CHPATER III TECHNOLOGY TRANSFER CONTRACTS CHAPTER IV TECHNICAL CONSULTING CONTRACTS AND TECHNICAL SERVICE CONTRACT CHAPTER V ISSUES ON PROCEDURES RELATED TO THE TRIAL OF DISPUTES OVER TECHNOLOGY CONTRACTS CHPATER VI MISCELLANEOUS PROVISIONS The following Interpretation regarding relevant issues is hereby given in accordance with the relevant provisions in the Contract Law of the People's Republic of China, the Patent Law of the People's Republic of China, the Civil Litigation Law of the People's Republic of China and other laws, as well as in combination with the judicial trial practices so as to correctly try the cases on disputes over technology contracts. CHAPTER I GENERAL PROVISIONS Article 1. Technological achievements shall mean the technological plans involving product, process, material and the improvements, etc. thereof, which are made with utilization of scientific and technological knowledge, information and experiences, including patents, patent applications, technical secrets, computer software, integrated circuit layout designs, new varieties of plant, and so on. Technical secret shall mean the technical information which is unknown by the public, has commercial value, and also is maintained confidential by the obligee concerning which the obligee has taken confidential measures. Article 2. "Executing work tasks of the legal person or other organization" mentioned in Paragraph 2 of Article 326 of the Contract Law shall include: (1) Implementing his post duties of the legal person or other organization or undertaking other technology development tasks consigned by the legal person or other organization; and (2) Within one year after his leaving the post, continuing engaging in the technology development related to his post duties of the former legal person or other organization, or related to the tasks consigned by it, unless otherwise prescribed in laws or administrative regulations. Where there are stipulations between the legal person or other organization and its employee on the rights and interests of the technological achievements accomplished by such employee during his employment or after his leaving the post, the people's court shall make confirmation on the basis of such stipulations. Article 3. "Material and technical conditions" mentioned in Paragraph 2 of Article 326 of the Contract Law shall include funds, equipment, apparatus, raw materials and unpublicized technical information and data, etc. Article 4. "Mainly utilizing the material and technical conditions of a legal person or other organization" mentioned in Paragraph 2 of Article 326 of the Contract Law shall include the employee's utilizing the whole or major part of funds, equipment, apparatus, raw materials or other material conditions of a legal person or other organization in the process of research and development of the technological achievement, and such material conditions have essential effects on the forming of the said technological achievement; it shall also include the circumstances under which the essential contents of the technological achievement are completed on the basis of the technological achievement of either the whole process or a certain stage which has not been publicized by the legal person or other organization, with the exceptions of the following circumstances: (1) With respect to the utilization of the material and technical conditions provided by the legal person or other organization, it is stipulated that the funds should be refunded or the royalties should be paid; (2) After the technological achievement is accomplished, the technological plan is verified or tested with utilization of the material and technical conditions of the legal person or other organization. Article 5. Where a technological achievement accomplished by an individual in executing his work tasks of the former legal person or other organization where he worked but by mainly utilizing the material and technical conditions of the legal person or other organization where he presently works, the rights and interests shall be confirmed pursuant to the agreement reached between the said former legal person or other organization where the natural person worked and the one where he presently works. In case no agreement can be reached, the rights and interests shall be reasonably shared by both parties on the basis of their contributions to this accomplished technological achievement. Article 6. "Individuals" who accomplish a technological achievement, mentioned in Articles 326 and 327 of the Contract Law, shall include the persons who independently or jointly make creative contributions to the technological achievement, that is, the inventors or designers of the technological achievement. The people's court shall, when ascertaining the creative contributions, decompose the composition of the essential technology involved in the technological achievement. The person who proposes the composition of the essential technology and therefore achieves the technological plan shall be the person who makes creative contributions. The persons, who provide funds, equipment, materials, conditions for experiments, carry out organizational management, assist in making drawings, clearing up documents and translating literatures, shall not be the individuals who accomplish the technological achievement. Article 7. A technology contract concluded by a scientific research organization having no status as a civil subject shall, if it is authorized or ratified by the legal person or other organization, be deemed as a contract concluded by the legal person or other organization, who shall bear the liabilities; or if the said technology contract is not authorized or ratified by the legal person or other organization, the members of this scientific research organization shall jointly bear the liabilities, however, the legal person or other organization shall bear the liabilities accordingly within the scope of the benefits, if any, which it gains from the contract. Scientific research organization having no status as a civil subject, which is mentioned in the preceding paragraph, shall include the research topic group or work room, etc. established by a legal person or other organization to engage in activities such as technological research, development and transfer, etc. Article 8. Where the production of products or provision of services subject to lawful approval or administrative license by the relevant department is not so approved or licensed, the effectiveness of the relevant technology contract concluded between the parties shall not be affected. Where there are no stipulations between the parties on the obligation of applying for the approval or license mentioned in the preceding paragraph, or if such stipulations are not clear, the people's court shall rule that the party exploiting the technology shall bear such obligation, unless otherwise prescribed by laws or administrative regulations. Article 9. Where one party concludes a commissioned development contract with others by fraudulent means and have others deem his existing technological achievement as the subject matter of research and development, and charges the research and development fee, or successively concludes separate commissioned development contracts with two or more entrusting parties by fraudulent means regarding the same research and development topic, and charges research and development fees repeatedly, the people's court shall support the aggrieved party's claim, if any, for modification or revocation of the contract under Paragraph 2 of Article 54 of the Contract Law. Article 10. The following circumstances shall belong to "illegally monopolizing technology and impairing technological progress" mentioned in Article 329 of the Contract Law: (1) Restricting one party from making new research and development on the basis of the contractual subject technology, or restricting this party from using the improved technology, or the conditions for both parties to exchange the improved technologies with each other being not reciprocal, including circumstances such as requiring one party to gratuitously provide the other party with the improved technology, to transfer the improved technology to the other party non-reciprocally, to gratuitously and solely occupy, or jointly own the intellectual property of the improved technology; (2) Restricting one party from obtaining, from other origins, the technology similar to or competitive against that of the technology provider; (3) Impeding one party's sufficient exploitation of the contractual subject technology in a reasonable way pursuant to the market demands, including unreasonably restricting the quantity, varieties, price, sales channel or export market of the contractual subject technology exploited by technology accepter in an obvious way to produce products or to provide services; (4) Requiring the technology accepter to accept attached conditions dispensable for exploiting the technology, including purchasing dispensable technologies, raw materials, products, equipment, services or accepting dispensable persons, etc.; (5) Unreasonably restricting the channels or origins for the technology accepter to purchase raw materials, parts and components, products or equipment, etc.; (6) Prohibiting the technology accepter from making objections to the effectiveness of the intellectual property of the contractual subject technology, or attaching conditions to the objections made. Article 11. If, after a technology contract is invalidated or revoked, the researcher and developer under the technology development contract, the transferor under the technology transfer contract, or the entrusted party under the technical consulting contract or technical service contract has implemented or partially implemented the stipulated obligations, and the fault of causing invalidity or revocation of the contract lies in the other party, the people's court may ascertain the research and development fees ought to be charged for the implemented obligations, the technology royalties, or the remuneration from provision of consulting services as the losses caused by the other party from invalidity or revocation of the contract. If, after a technology contract is invalidated or revoked, the parties are unable to re-determine through agreement the new technological achievement accomplished due to implementation of the contract, or the belongingness of rights and sharing of benefits of the technological achievement based upon the follow-up improvements of the technological achievements accomplished by others, the people's court may rule that the technological achievement shall be owned by the accomplishing party. Article 12. In accordance with Article 329 of the Contract Law, after a technology contract infringing upon other's technical secret is confirmed invalid, the party who obtained the technical secret in good faith may, unless otherwise prescribed by laws or administrative regulations, continue using this technical secret within the same scope as that when he obtained it, provided that he shall pay the obligee reasonable royalties and bear confidential obligations. Where both parties maliciously collude with each other to conclude or implement a contract, or one party who knows or ought to know the other party's infringement concludes a contract with such other party or implements the contract, such conclusion or implementation of the contract shall be joint infringement, and the people's court shall rule that the tortfeasors shall bear joint indemnity liabilities or confidential obligations, therefore the party who has obtained the technical secret may not continue using this technical secret. Article 13. Where a person who may continue using a technical secret in accordance with Paragraph 1 of the preceding article is in dispute with the obligee over the payment of royalties, either party may require the people's court for settlement. If the user continues using the technical secret but refuses to pay the royalties, the people's court may, upon the obligee's request, rule that the user cease using it. The people's court may determine the royalties in a reasonable way on the basis of the royalties for the obligee to usually license this technical secret, or the royalties paid by the user to obtain the technical secret, as well as by taking into consideration factors such as the research and development cost of this technical secret, the extent of conversion and application of the achievement, the user's scale of use and his economic benefits, etc. No matter whether the user continues using the technical secret or not, the people's court shall rule that he shall pay the obligee royalties for the period when he has used the technical secret. The royalties which have been paid by the user to the transferor under the invalid contract shall be refunded by the transferor. Article 14. Where there are no stipulations between the parties concerning the price, remuneration and royalties under the technology contract, or such stipulations are unclear, the people's court may deal with the matter in compliance with the following principles: (1) For technology development contracts and technology transfer contracts, they shall be reasonably determined on the basis of the research and development costs, advancement, extent of conversion or application of the relevant technological achievements, the rights and interests to be enjoyed and the liabilities to be borne by the parties, as well as the economic benefits of the technological achievements, and so on; and (2) For technical consulting contracts and technical service contracts, they shall be reasonably determined on the basis of the relevant technological content, quality and quantity of the consulting services, as well as economic benefits which have occurred or is predicted to occur, and so on. Where the price, remuneration or royalties under a technology contract include non-technical money, the amount shall be calculated by items. Article 15. Where one party to a technology contract delays implementing his major debt, and fails to implement it within 30 days after being informed, while the other party claims rescission of the contract in accordance with Item (3) of Article 94 of the Contract Law, the people's court shall support such claim. Where the party states in the informing notice a time limit of more than 30 days for implementation, the people's court shall ascertain this time limit as the reasonable time limit prescribed in Item (3) of Article 94 of the Contract Law. Article 16. Where the parties contribute a technological achievement to an enterprise as investment but do not clearly stipulate the proprietorship, and the enterprise which accepts the investment claims proprietorship of the technological achievement, the people's court shall usually support this claim, unless the proportion of the value of the technological achievement to the investment amount is obviously unreasonable, thus damaging the investor's benefits. Where the parties have stipulated a proportion between each other on the proprietorship of a technological achievement, the technological achievement shall be deemed to be jointly owned by them, thus the exercise of the rights thereof and the distribution of the benefits shall be in compliance with the relevant provisions on jointly owned technological achievements. However, if there are otherwise stipulations between both parties, those stipulations shall prevail. Where the parties have stipulated a proportion between each other on the use right of a technological achievement, the people's court may deem proportion such as that for the parties to distribute the proceeds obtained from exploitation of this technological achievement. However, if there are otherwise stipulations between both parties, those provisions shall prevail. CHAPTER II TECHNOLOGY DEVELOPMENT CONTRACTS Article 17. "New technology, new product, new process, new material and the system thereof" mentioned in Article 330 of the Contract Law shall include the product, process, material, the system thereof, and other technological plan, which were not grasped by the party at the time of conclusion of the technology contract, with the exception of remodeling of the existing product without technical innovation, modification of process, adjustment of material formula, and verification, testing and use of the technological achievement. Article 18. A technology conversion contract "concluded between the parties for converting a scientific and technological achievement having the value of industrial application", which is prescribed in Paragraph 4 of Article 330 of the Contract Law, shall mean a contract between the parties regarding a scientific and technological achievement (including a technological achievement of a certain stage) having practical value but having not been used for industrialized application, so as to realize industrialized application of this scientific and technological achievement, and in which contents such as follow-up experiment, development and application, etc. are stipulated. Article 19. "Participating in the development by implementing their respective tasks" mentioned in Article 335 of the Contract Law shall include the parties' joint or separate undertaking of design, process, experiment and trial-production, etc. in light of the plans and division of tasks agreed upon between them. Where one party to a technology development contract only provides material conditions such as funds, equipment, materials, etc. or only undertakes auxiliary affairs, while the other party carries out research and development, such a contract shall be a commissioned development contract. Article 20. "Both parties' rights to use and transfer", which is mentioned in Article 341 of the Contract Law shall include the rights that either party does not have to be consented to by the other party before using the technical secret or licensing the technical secret to others by means of common license for use, and may solely occupy the benefits obtained therefrom. If one party assigns the right to transfer the technical secret achievement to others, or licenses the technical secret to others by means of sole or exclusive license for use, without the other party's consent or confirmation, the said assignment or license shall be ascertained to be invalid. Article 21. Where one party to a technology development contract discretionarily exploits a patent or uses a technical secret under the Contract Law or the contractual stipulations, but licenses it by means of common license to others for exploitation or use due to the fact that he cannot meet the conditions for independently exploiting the patent or using the technical secret, he may be permitted to do so. CHPATER III TECHNOLOGY TRANSFER CONTRACTS Article 22. "Technology transfer contract" mentioned in Article 342 of the Contract Law shall mean a contract concluded between an obligee who lawfully owns the technology (including those who are entitled to transfer the technology to foreign parties), under which the obligee transfers the relevant rights to the certain patent, patent application or technical secret to others, or license others to exploit or use it. However, the contracts concluded regarding the technological achievement to be researched and developed or regarding the knowledge, technology, experiences or information involving no patent, patent application or technical secret shall be excluded. The stipulations in a technology transfer contract on the special equipment, raw materials provided by the transferor to the transferee for exploitation of the technology or on provision of relevant technical consulting or technical services, shall be a part of the technology transfer contract. Disputes arising out of these matters shall be settled in a way applicable to technology transfer contracts. Where a party concludes a consortion contract by contributing his technology as shares, but does not participate in the management of the consortium, and stipulates the consortium in a form of floor clause, or stipulates that the other party to the consortion shall pay the price or royalties for the technology, it shall be deemed as a technology transfer contract. Article 23. Where a party to a contract for transfer of the right to apply for a patent requests rescission of the contract with the reason that the patent application is rejected or is deemed to have been withdrawn, and this fact occurs prior to registration of the transfer of the right to apply for a patent under Paragraph 3 of Article 10 of the Patent Law, the people's court shall support such request; and shall not support it if the said fact occurs after the transfer registration, unless otherwise agreed upon between the parties. Where a patent application is rejected due to the existence of an earlier patent application for an unpublicized invention creation of the same kind at the time when the contract for transfer of the right to apply for a patent is concluded, and the party concerned requests modification or revocation of the contract under Item (2) of Paragraph 1 of Article 54 of the Contract Law, the people's court shall support such request. Article 24. If, before concluding a contract for transfer of the patent right or a contract for transfer of the right to apply for a patent, the transferor himself has exploited the invention creation, and after the contract has become effective, the transferee requires the transferor to cease the exploitation, the people's court shall support such request, unless otherwise agreed upon between the parties. The contract concluded between the transferor and the transferee on transfer of the patent right or the right to apply for a patent, shall not affect the effectiveness of the relevant contract on license for exploitation of patent or that on transfer of technical secret which is concluded between the transferor and others before the said contract is concluded. Article 25. A license for exploitation of patent may be granted in the following ways: (1) Sole license for exploitation, which means the transferor licenses a patent within the stipulated license scope for exploitation of the patent to only one transferee for exploitation, and the transferor shall not exploit this patent pursuant to the contractual stipulations; (2) License for exclusive exploitation, which means the transferor licenses a patent within the stipulated license scope for exploitation of the patent to only one transferee for exploitation, but the transferor may discretionarily exploit this patent pursuant to the contractual stipulations; and (3) Common license for exploitation, which means the transferor licenses a patent within the stipulated license scope to others for exploitation, and may discretionarily exploit this patent. Where there are no stipulations between the parties on the way of license for exploitation of patent or such stipulations are not clear, the said way of license shall be deemed as common license for exploitation. If the contract on license for exploitation of patent stipulates that the transferee may sublicense others to exploit the patent, such sublicense may be deemed as common license for exploitation, unless otherwise agreed upon between the parties. The ways of license for using technical secrets shall be determined by referring to Paragraphs 1 and 2 of this Article. Article 26. The transferor to a contract on license for exploitation of a patent shall bear the obligations of maintaining the validity of the patent right within the duration of effectiveness of the contract, including lawfully paying annual fee for the patent, and actively responding to claims of others for announcing invalidity of the patent right, unless otherwise agreed upon between the parties. Article 27. Where the transferor to a contract on license for exclusive exploitation does not have the conditions to independently exploit the patent, and licenses others in the way of common license to exploit the patent, the people's court may ascertain that the transferor himself may exploit the patent, unless otherwise agreed upon between the parties. Article 28. "Scope of exploitation of patents or use of technical secrets" mentioned in Article 343 of the Contract Law shall include the duration, area, method of exploitation of patents or of use of technical secrets, as well as the persons who access to the technical secrets, and so on. Where there are no stipulations between the parties on the duration of exploiting a patent or of using a technical secret, or such stipulations are not clear, the transferee shall not be restricted by duration from exploiting the patent or using the technical secret. Article 29. "Confidential obligations" prescribed in Article 347 of the Contract Law, which are to be borne by the transferor to a contract on transfer of a technical secret, shall not restrict him from applying for the patent, unless it is otherwise stipulated between the parties that the transferor shall not apply for the patent. The contract on license for use, which is concluded between the parties regarding the technological achievement under application for a patent shall, before the patent application is publicized, be governed by the relevant provisions on contracts for transfer of technical secrets; or shall, after an application for invention patent is publicized and before it is patented, be governed by the relevant provisions on contracts on license for exploitation of patent for reference; or, after it is patented, the original contract shall be the contract on license for exploitation of patent, and be governed by the relevant provisions on contracts on license for exploitation of patent. The people's court shall not ascertain a contract concluded between the parties on license for exploitation of patent under application to be ineffective with the reason that the technology has not been patented. CHAPTER IV TECHNICAL CONSULTING CONTRACTS AND TECHNICAL SERVICE CONTRACT Article 30. "Certain technical projects" mentioned in Paragraph 1 of Article 356 of the Contract Law shall include the soft scientific research projects related to the harmonious development of science, technology, economy and society, as well as the professional technical projects of carrying out surveys, analysis, demonstration, appraisal and forecast with scientific knowledge and by technical means, which aim at promoting scientific and technical progress and modernized management, improving economic benefits and social benefits. Article 31. Where there are no stipulations between the parties on the burdens of expenses needed for the entrusted party to the technical consulting contract to carry out surveys, research, analysis, demonstration, experimental test, etc., or such stipulations are not clear, the said burdens shall be borne by the entrusted party. Where there are no stipulations between the parties to a technical consulting contract on the obligation of maintaining confidentiality for the technical information and data provided by the entrusting party or for the consulting reports and opinions proposed by the entrusted party, the party that cites, publicizes or divulges them to a third person shall not be deemed to breach the contract, provided that this party shall, if it infringes upon the other party's lawful rights and interests, bear the civil liabilities in accordance with the law. Article 32. Where the entrusted party to a technical consulting contract finds any obvious error or defect in the information or data provided by the entrusting party, but fails to notify the entrusting party within a reasonable time limit, it shall be deemed to have ratified the technical information and data, etc. provided by the entrusting party. The entrusting party shall bear the losses caused, if he fails to make a reply and correction within a reasonable time limit after receiving the entrusted party's notification for correction. Article 33. "Certain technical problems" mentioned in Paragraph 2 of Article 356 of the Contract Law shall include the professional technical problems which need to be resolved with professional technical knowledge, experiences and information, and are related to the improvement of product structure, processing flow and product quality, the reduction of product costs, resource consumption, the protection of resources and environment, the realization of safe operation, as well as the increase of economic benefits and social benefits, etc. Article 34. Where one party provides in the name of technology transfer a technology which has entered public sector, or the subject technology under a technology transfer contract enters public sector in the process of implementation of the contract, but the technology provider still provides technical guidance or technical knowledge, or resolves any certain technical problem for the other party by meeting the stipulated conditions, such a contract shall be deemed as a technical service contract, and the stipulated fee for transfer of the technology may be deemed as the remuneration and expenses for providing technical service, unless otherwise prescribed in laws or administrative regulations. If, in accordance with the preceding paragraph, it is obviously unreasonable to deem the fee for transfer of the technology as the remuneration and expenses for providing technical services, the people's court may reasonably determine the sum of the fee upon request of the party concerned. Article 35. Where there are no stipulations between the parties on the burden of expenses needed for the entrusted party to the technical service contract to provide services, or such stipulations are not clear, the said expenses shall be borne by the entrusted party. Where the entrusted party to a technical service contract finds that the information, data, sample, material, site, or other working conditions, which are provided by the entrusting party, do not meet the stipulations, but fails to notify the entrusting party within a reasonable time limit, this entrusted party shall be deemed to have ratified the working conditions provided by the entrusting party. The entrusting party shall bear the losses caused, if it fails to make a reply and correction within a reasonable time limit after receiving the entrusted party's notification for correction. Article 36. "Technical training contract" prescribed in Article 364 of the Contract Law shall mean a contract concluded for one party to entrust the other party to provide professional technical training and technical guidance to enable the designated students to accept certain trainings, not including occupational trainings, study, and employees' spare-time education carried out pursuant to the plans of the very sector, or of the legal person or other organization. Article 37. Where there are no stipulations between the parties on the duties of providing and managing the working conditions such as indispensable technical training site and facilities, experimental conditions, etc., or such stipulations are not clear, the responsibility to provide and manage the said working conditions shall remain with the entrusting party. Where the students dispatched by the entrusting party to a technical training contract fail to meet the stipulated conditions, thus affecting the training quality, the entrusting party shall pay the remuneration pursuant to the contractual stipulations. Where the teachers supplied by the entrusted party fail to meet the stipulated conditions, thus affecting the training quality, or the entrusted party fails to hold the training pursuant to the plan or project, thus causing the stipulated training target unable to be achieved, the entrusted party shall reduce or exempt the remuneration. Where the entrusted party finds that the students do not meet the stipulated conditions or the entrusting party finds that the teachers do not meet the stipulated conditions, but fails to notify the other party within a reasonable time limit, or the notified party fails to replace the dispatched personnel pursuant to the contractual stipulations within a reasonable time limit, the obligated party concerned shall bear the corresponding civil liabilities. Article 38. "Technical intermediation contract" prescribed in Article 364 of the Contract Law shall mean a contract concluded by one party with the other party, under which the said this party provides contact, intermediary services, or special services for implementation of contract with its knowledge, technology, experiences and information so as to enable the said other party to conclude a technology contract with a third person. Article 39. The expenses for an intermediator to conduct intermediary activities shall mean the expenses of communication, travel and necessary investigation and research, which are spend by the intermediator before the entrusting party and the third person conclude the technology contract for the sake of contact and intermediary activities, etc. The intermediator's remuneration shall mean the proceeds, which ought to be received by the intermediator due to the entrusting party's conclusion of the technology contract with the third person as well as due to its own provision of services for the implementation of the contract. Where there are no stipulations between the parties on the burden of expenses for the intermediator to conduct intermediary activities, or such stipulations are not clear, the said expenses shall be borne by the intermediator. If the parties stipulate that the expenses shall be borne by the entrusting party, but do not stipulate the specific amount or calculating method, the entrusting party shall bear the necessary expenses spend by the intermediator for conducting the intermediary activities. Where there are no stipulations between the parties on the amount of intermediator's remuneration, or such stipulations are not clear, the said amount shall be reasonably determined on the basis of the labor services provided by the intermediator, and be borne by the entrusting party. If the intermediation clause is only stipulated in the technology contract concluded between the entrusting party and the third person, but there are no stipulations on payment of remuneration to the intermediator or such stipulations are not clear, the payable remuneration shall be equally borne by the entrusting party and the third person. Article 40. Where an intermediator fails to cause the technology contract to be concluded between the entrusting party and the third person, the people's court shall not support its claim for payment of remuneration; but shall support its claim for payment by the entrusting party of the necessary expenses for conducting intermediary activities, unless otherwise agreed upon between the parties. Where an intermediator conceals any important fact related to the conclusion of a technology contract or provides false information, and infringes upon the entrusting party's interest, it shall, on the basis of the consequences, either receive no remuneration and bear indemnity liabilities. Article 41. Where an intermediator has no fault in the ineffectiveness or revocation of the technology contract between the entrusting party and the third person, and the ineffectiveness or revocation of this technology contract will not affect the continuing effectiveness of the relevant intermediation clause or technology intermediation contract, the people's court shall support the intermediator's claim for payment by the entrusting party of the expenses for conducting intermediary activities and the remuneration pursuant to the stipulations or relevant provisions of this Interpretation. The intermediator's expenses for conducting intermediary activities and its remuneration shall not be deemed as the losses of either the entrusting party or the third person due to the dispute over the technology contract between them. CHAPTER V PROCEDURES RELATED TO THE TRIAL OF DISPUTES OVER TECHNOLOGY CONTRACTS Article 42. Where the parties include the contents of a technology contract and those of other contracts, or include the contents of technology contracts of different types into one contract, the nature and cause of the case shall be determined on the basis of the disputed rights and obligations of the parties. Where the name of a technology contract is not consistent with the stipulated right-obligation relationship, the type of the contract and cause of the case shall be determined on the basis of the stipulated rights and obligations. Where it is stipulated in a technology transfer contract that the transferor shall be responsible for underwriting or repurchasing the products manufactured by the transferee from exploitation of the contractual subject technology, and a dispute arises out of the transferor's not implementing or not fully implementing its underwriting or repurchasing obligation, without involving any technical problem, the cause of the case shall be determined on the basis of the rights and obligations stipulated in the underwriting or repurchasing clause. Article 43. The cases on disputes over technology contracts shall usually be under the jurisdiction of intermediate people's courts or people's courts at higher levels. Each higher people's court may, on the basis of the actual circumstance of its own jurisdiction and upon approval from the Supreme People's Court, designate some people's courts at the gross-root level to exercise jurisdiction over cases of the first instance on disputes over technology contracts. Where there are otherwise provisions in other judicial interpretations regarding cases on disputes over technology contracts, such provisions shall apply. Where a contract contains both the contents of a technology contract, and those of other contracts, and the parties are in dispute over both contents, the case shall be accepted by a people's court having the jurisdiction over cases on disputes over technology contracts. Article 44. Where one party requires the court to confirm a technology contract to be ineffective with the reason that the disputed contract in litigation infringes upon other's technological achievements, or the people's court finds in trying disputes over technology contracts any cause that might lead to the ineffectiveness of a technology contract, the people's court shall lawfully notify the relevant interested person that he/it may, as a third person with independent claim, participate in the litigation or separately bring a lawsuit in accordance with the law to the people's court having the jurisdiction over the said contract. Where the interested person does not bring a lawsuit within 15 days as of receipt of the notice, the trying of the case by the people's court shall not be affected. Article 45. Where, a third person claims by alleging proprietorship of the contractual subject technology or claims against infringement to a people's court that accepts the case on dispute over a technology contract, and the said people's court has jurisdiction over this case, it may try the dispute over the proprietorship or infringement in combination with the contractual dispute; if the said people's court has no jurisdiction over this case, it shall inform the party concerned to bring a separate lawsuit to a people's court having the jurisdiction, or to apply for transferring the accepted case on dispute over the proprietorship or infringement to a people's court having the jurisdiction. After the case on the dispute over proprietorship or infringement is accepted as another case, the litigation of contractual dispute shall be suspended. Where, during the litigation concerning a contract on license for exploitation of a patent, the transferee or a third person requires the Patent Reexamination Board to declare the invalidity of the patent right, the people's court does not have to suspend the litigation. If the patent right is declared invalid in the process of trial of the case, the matter shall be dealt with in accordance with Paragraphs 2 and 3 of Article 47 of the Patent Law. CHPATER VI MISCELLANEOUS PROVISIONS Article 46. With respect to the disputes over contracts on integrated circuit layout design, license for use of or transfer of new varieties of plant, etc., if there are otherwise provisions in relevant administrative regulations, such provisions shall apply; if there are no such provisions, the provisions in the General Principles of the Contract Law shall apply, and the relevant provisions in Chapter XVIII of the Contract Law and this Interpretation may be taken into consideration for reference. With respect to the disputes over contracts on development of, license for use of or transfer of computer software, etc., if there are otherwise provisions in the Copyright Law or other laws or administrative regulations, such provisions shall apply; if there are no such provisions, the provisions in the General Principles of the Contract Law shall apply, and the relevant provisions in Chapter XVIII of the Contract Law and this Interpretation may be taken into consideration for reference. Article 47. This Interpretation shall come into force on January 1, 2005. |
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