On 29 March 2018, the Chinese State Council released the External Transfer of Intellectual Property Rights Measures (for trial implementation) (the IPR Overseas Transfer Measures) providing for further governmental scrutiny of overseas transfers of IPR from the People’s Republic of China (PRC or China), with a focus on the impact of such transfers on national security and/or the impact on the development capabilities for certain key industries in China. More specifically, the IPR Overseas Transfer Measures set forth procedures for various governmental departments, including those in charge of Intellectual Property (IP), technology, agriculture, and forestry to become involved in reviews of such transfers conducted by the Ministry of Commerce (MOFCOM).

The IPR Overseas Transfer Measures became effective from the date on which they were “printed and issued”, which we presume to be 29 March 2008 (not 18 March 2018 the date on which the IPR Overseas Transfer Measures were passed). As is customary in China, there is no indication as to the length of the “trial implementation” period.

Though many of the details on how the IPR Overseas Transfer Measures will be implemented remain to be worked out, the message is clear that there will be a stepping up in the enforcement of Chinese technology export regulations, potentially affecting multinationals that engage in research and development (R&D) activities in China or who are parties to IPR licensing transactions that may result in improvements being made by their Chinese licensees which they wish to have exported to the overseas contracting party.

We have published a report covering:

  • Scope of the IPR Overseas Transfer Measures
  • Evaluation standard
  • Review mechanisms (exported tech & acquisitions by foreign inventors)
  • Supplemental rules to be issued
  • Conclusion

Please read the report here