China: Practical Guidance On License Agreement Recordal At The SIPO

Last Updated: 17 July 2017
Article by Qi LIU

Along with the rapid growth of the Chinese patent filings, attention begins to focus on how to exploit the patent right in order to realize its utmost value in business. In the recent years, the Chinese government enacted and renewed the Laws and Regulations in succession, in order to propel the commercialization of the scientific and technological achievements and boost the economy in China. As one of the most-frequently used methods to enforce the Chinese patent rights, patent licensing in China is becoming more and more active in the business operations.

In order to protect a patent right, regulate the license acts and promote the proper usage of the patent right, the State Intellectual Property Office of China (i.e. the "SIPO") enacted, under the Chinese Patent Law and Contract Law, and released the Administrative Measures for Recording a License Agreement ("Measures"), which took effect as of August 1, 2011. According to the Measures, the patent owners could record license agreements officially in order to safeguard their interests over the licensed Chinese patents in China.

Nowadays, more and more license agreements are concluded due to the various transnational cooperation, and then may need to be recorded with the SIPO. Though the above Measures have been implemented for several years, there still exist some typical neglects by licensors in practice, which lead to unsuccessful recordal acts before the SIPO. Taking those typical situations into consideration, we think the following points in recording a license agreement at the SIPO shall be kept in mind by all patent owners, especially by foreign companies and individuals.

  1. The necessity to record a license agreement at the SIPO

First of all, we should mention that it is not compulsory for a licensor, typically a patent owner, to record his license agreement under the Chinese Patent Law. The license agreement shall be concluded under the Contract Law in China, and takes effect as of the effective date of the agreement. The recordal is, by no means, the condition for the license to be valid in China.

Nevertheless, the recordal is beneficial for the sake of the licensor and licensee. For example, after the recordal, the SIPO will publish the basic data (exclusive of the text of the license agreement) of the recorded license agreement, and the publication would go against any third party with good faith. Another example is that, when a local Intellectual Property Office handles an administrative conciliation in a patent infringement dispute, the type, duration, royalty and payment methods etc. of the recorded license, would be taken as the reference for deciding the compensation. Moreover, according to the Some Provisions regarding the Applicable Laws for Injunction issued by the Supreme Court, Rule 4, Para 2, the Certificate of a license agreement recordal would be served as necessary proof for the interested party to request injunction. For some Chinese licensee, the recordal of exclusive license against the Chinese patents would be one of the necessary conditions to obtain the qualification as the High and New Technology Enterprises under the related Chinese laws and regulations, with which the Chinese licensee could enjoy many benefits, such as the tax reduction and funding support by the local government.

We thus suggest foreign companies and individuals to consider the benefits of the license agreement recordal in China, and take the relevant procedures, for, with the recordal, the relevant parties are holding the obvious advantages, when their legalized rights in the license are violated.

  1. Matters needing attention before the recordal of a license agreement
  1. Time Frame:It is regulated under the Implementing Regulations of Chinese Patent Law, Rule 14, the recordal of a license agreement shall be made within three months from the effective date of the license agreement. In practice, if the time frame is overdue for a short time, usually less than 6 months, it is still possible for this license agreement to be recorded, but a Declaration announcing that the agreement is still valid should be further submitted with the SIPO. In case that the three-month time limit is out of date for a longer time, it is recommended that a new license agreement be signed to effectuate a new date for the recordal purpose.
  2. Co-ownership status: In the situation of co-ownership, if there is an agreement concluded on exercising of the patent right, the agreement shall apply. In the absence of such an agreement, any co-owner may independently license another party to exploit the patent but only through the non-exclusive license. Nevertheless, the royalty fees obtained from licensing shall be distributed among the co-owners. In practice, when filing the recordal request for such a non-exclusive license agreement at the SIPO, no document for attesting the consent of the other owner(s) is needed.
  3. However, in case of an exclusive license agreement, the co-owner has to obtain the consent from the other co-owner(s), in order to grant the license to any third party. In practice, the Consent Letter from the other co-owner is necessary when making the recordal of the license agreement at the SIPO.

  1. No legal defects: a Chinese patent or a patent application involved in a license agreement recordal, shall be attached with no legal defects. It is deemed that there are legal defects with the license agreement if:
    • A Notification deeming as withdrawn, a Notification of Termination, a Notification of Non-Payment, or the like is issued by the SIPO to the patent or patent application, and no restoration request has been made yet;
    • The patent is in the invalidation procedure;
    • The patent isannounced invalid or already expired or terminated;
    • For the patent or patent application, the Court adopts preservation measures as to the ownership thereof; and,
    • The patent or patent application is pledged to a third party, except that the pledgee consents to the license and authorizes the patentee or applicant to proceed with the license.
  1. The necessary information to be involved in the license agreement

Generally speaking, a license agreement shall include the following elements when making the recordal at the SIPO:

  • The detailed information of the licensor and licensee, i.e. their full names and addresses, and the Chinese patent (application) number(s) involved in the license agreement;
  • The effective date and terminating date;
  • The type of the license;
  • The royalty and the practical way of the payment; and,
  • The place to implement the license.

The examiners usually hold the following standards,when examining the above-mentioned elements:

  1. As for licensor status: the licensor should be the patent owner; otherwise, further documents or procedures are needed. In case of a patent pool, in which various patent owners hand over their patents to one of them or a third party, in order to have the patents licensed among them or out to other entities, the licensor, usually the entity operating the patent pool, should be authorized by the patent owners, evidenced by the Letter of Authorization. Where the ownership of a patent is changed before the license agreement, but yet to be recorded, the recordal of ownership change shall be attended and completed officially before proceeding with the recordal of the license agreement. In the latter case, the examiner requires that the effective date of the license agreement should be later than the effective date of the recordal of the ownership change.
  2. As for effective date: the effective date of the license agreement refers to the effective date stipulated in the license agreement. However, the license acts could be traced to the past, and such understandings could be concluded in the license agreement.
  3. The terminating date of the license agreement shall not exceed the expiration date of the licensed patent right. The expiration date refers to the end of the lifespan of a Chinese patent, which is 20 years for an invention or 10 years for a utility model and design, from their filing dates under the Chinese Patent Law. If there are a number of Chinese patents or patent applications, the terminating date of the license agreement shall not exceed the last expiration date of the patents or patent applications.

    For most transnational license agreements, they do not only include IP rights, but also a package of technologies and know-hows. The expiration date of the patents could, by no means, be stipulated as the benchmark of the whole license agreement. In this situation, our advice is to conclude the wordings for these different varieties of IP rights under the Terminating clauses, to meet the SIPO's requirements in formality. If the accurate date is hard or not desired to be indicated in the agreement, it is suggested that a description about the expiration date as the terminating date for the patent issues be added therein.

    To finish this point, we would like to draw your specific attention to an important issue. That is, in the Chinese Patent Law, a Chinese patent is deemed as invalid on its expiration date. For example, if a Chinese patent's expiring date is Dec.30, 2015, legally, the patent right could not obtain the protection on this specific date and after. Therefore, if an accurate terminating date needs to be introduced in an agreement for a Chinese patent, it has to be a day prior to the patent's expiring date, taking the above example, the terminating date of the license agreement for that case would be Dec.29, 2015.

  1. As for license types: generally speaking, there are three types of license in the Chinese Laws. One is the non-exclusive license. As for the exclusive license, the Chinese Laws further divide it into two types as follows:
    • The exclusive license, where only the licensee could exploit the licensed patent right, while the licensor and any third party could not make use thereof;
    • The exclusive license, where both licensor and licensee could exploit the licensed patent right, while any third party could not make use thereof.
    Before attending to the recordal, the licensor shall clarify which of the above-mentioned exclusive license it would like to record, since parts of the transnational license agreement is ambiguous on this issue, and the applicable laws are often the foreign laws, which do not subdivide the exclusive license.
  1. The royalty has to be put in the license agreement and should be reasonable, since it is one of the essential conditions to validate an agreement under the Contract Law. Without the royalty, the license agreement will be deemed as invalid and will NOT be accepted by the SIPO for the recordal purpose.

The royalty in a license agreement could be a fixed fee or a running royalty or the combination. It could also be free or a nominal amount, such as 1.00 dollar. When recording the license agreement, the SIPO will not examine the reasonability of the royalty, but requests the existence of such in the agreement. Furthermore, the SIPO demands a concrete amount of royalty in the requesting form, when making the recordal of the license agreement.

In a real license agreement, due to the unpredictable sales and profits, the running royalty is usually adopted by the licensor and licensee, on the basis of, e.g. gross sale, net revenue, net profits or per unit. It is quite normal and likely that the royalty base would not be available, when attending to the recordal at the SIPO, let alone a clear figure. However, under the current provisions, there is no workaround and this requirement has to be fulfilled strictly, if the license agreement needs to be recorded officially. In order to deal with this issue, when a running royalty is reached out by the licensor and license in an agreement, we summarize three ways for the readers' optional usage:

  • Before the execution of the agreement, draft a clause, indicating the clear amount with the descriptions to limit this figure only for the recordal purpose in China;
  • After the execution of the agreement, draft a confirmatory letter, indicating the clear amount, with the signatures of both of the licensor and licensee;
  • If a royalty base could be identified and predicted, and calculation methods could work out, it is possible to remain the agreement unchanged, but working out a figure on the basis of the royalty base and calculation methods to be submitted with the SIPO. And such figure should be evidenced by an explanation about how this figure is calculated out,which needs NOT to be signed by either licensor or licensee.

For all the efforts made above, what is on earth the importance of a concrete royalty amount for recordal? As we discuss, at the beginning of this passage, the necessity to record a license agreement at the SIPO, the royalty has the legal force as the evidence, when the local Intellectual Property Office decides the compensation in an administrative conciliation. For another point, it was a necessary document when making the overseas remittance before Sept.1, 2013, under the "Notice on the Issues for Strengthening the Management for Remitting the Payments for the Imported Intangible Assets" stipulated by the State Administration of Foreign Exchange ("SAFE"). However, this regulation was abolished and replaced by the "Notice on issuance of the Management Regulations on the Service, Trade and Foreign Exchange" by SAFE on Sept.1, 2013, in which the Certificate for license agreement recordal was no longer necessary for the Chinese banks to make the foreign remittance for the Chinese entities. But, at present, some local banks may still require this document for prudence or local regulations.

  1. The alteration and cancelation of the recordal of license agreement
  1. Alternation: for a license agreement, which has been already recorded at the SIPO, if there are any changes on the involved Chinese patent(s), the type of the license, the royalty, the practical way of payment or the terminating date, the licensor and licensee could record the changes, with the revised agreements concluded by both of the licensor and licensee as well as the original Certificate of the license agreement recordal.
  2. Among those alternations, in case the terminating date is desired to be prolonged, the licensor and licensee shall make recordal of this change, before two months from the terminating date of the original recorded license agreement. The necessary documents are the same as above.

  1. With 30 days after the termination of the license agreement or early termination agreement, the licensor and licensee should make a request for the cancelation of the recordal at the SIPO.

If any Chinese patent involved in a license agreement terminated before the end of its lifespan or invalidated, the licensor and licensee should make a request for the cancelation of the recordal at the SIPO.

Nevertheless, at present the lateness or failure in making the request for the cancelation will not introduce any disadvantages or punishment under the Chinese laws.

  1. Technology Exportation Involved in License Agreement

For Chinese entities, which license their patent rights to foreign entities, a Technology Exportation Certificate must be obtained under the Chinese Patent Law, before they record their license agreements over the Chinese patents at the SIPO.

The Technology Exportation Certificate shall be obtained by the Chinese entities at the local authority in charge of foreign trade and commerce under the "National Regulations on the Technology Importation and Exportation" promulgated by the State Council in 2002.

At present, the recordal of license agreement at the SIPO is still an examination emphasizing the formality over the content. When drafting the transnational license agreement, the above information is highly suggested for consideration, or a short-term license agreement specific to the recordal in China can be made as the supplementary documents to the master license agreement.

Hope our experiences, which have been accumulated during years of making the recordal of license agreements, could provide some helps to those who are involved in patent license in China.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions