The recent amendments to the Act on Prevention of Divulgence and
Protection of Industrial Technology, which were passed by the
National Assembly on June 30, 2011, were promulgated on July 25,
2011. The amendments are scheduled to become effective six months
from the promulgation date - on January 26, 2012.
The salient points of the recent amendments are as follows:
Restrictions on foreign investments (such as overseas
mergers/acquisitions and joint investments) in institutions that
hold key national technologies are adopted: Under the
current law, if an institution holding key national technology
which was developed using government funding intends to export the
technology overseas, such as by selling or transferring the
technology to a foreign company, it is required to obtain prior
approval from the Minister of the Ministry of Knowledge Economy.
The recent amendments, however, go one step further to require such
companies to report to the Minister of the Ministry of Knowledge
Economy prior to approval of foreign investments (e.g.,
mergers/acquisitions or joint investments by foreign entities) at
the company level - and not just sales or transfers of the
technology itself. The precise scope of transactions to which this
reporting requirement will apply will be determined by a separate
In addition, in the event the overseas transaction at issue is
determined to pose a serious risk to national security, the
Minister of the Ministry of Knowledge Economy may order various
measures to address the risk, such as an order to suspend, prohibit
or even unwind the transaction.
Request for injunctions against industrial technology
infringement are now permitted: Under the recent
amendments, if an infringement of (or attempt to infringe)
industrial technology results in damages to an entity's
profits, or exposes an entity to the risk of such damages, the
entity may request an injunction from the court to block or prevent
the infringement. As a result of the amendments, there are now
clear statutory grounds for requesting injunctions to block or
prevent industrial technology infringements. Moreover, in the event
industrial technology is infringed upon or leaked, the Minister of
the Ministry of Knowledge Economy and the head of the appropriate
investigative authority may take discretionary measures necessary
to block the infringement or leakage, even if these measures are
not requested by the relevant company.
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On January 1, 2015, China will formally begin implementing an updated Environmental Protection Law ("the China EPL").
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”