On June 24th, 2013, the Shanghai Higher Court issued the “Guidelines on Trial of Disputes over Rewards and Remuneration for Inventors or Designers of Service Invention or Creation” (the “Guidelines”), effective as of the release date.

The Guidelines mainly regulate rewards and remuneration for service inventions or creations, including: 1. The employer may reach agreement with the inventor or designer regarding the reward and remuneration for service invention or creation; 2. If the amount of reward and remuneration agreed by the parties is extremely low and evidently unreasonable, the court cannot directly adopt the statutory standard in deciding the amount of reward and remuneration; instead, the court should abide by the principle of reasonableness stipulated in the Patent Law and decide the reasonable amount of reward and remuneration based on the specific circumstances of the case; 3. In the case of commissioned and cooperative development, the prerequisite that the inventor or designer of service invention or creation request payment of reward and remuneration is that the inventor or designer shall be an employee of the company which is granted the patent, for instance, in the case of commissioned development; 4. In the case of labor dispatch, dispatched employees may claim against the employer for reward and remuneration for a service invention or creation; 5.A twoyear limitation of action period shall apply to disputes over reward and remuneration for service invention or creation; the limitation of action period shall commence from the date on which the plaintiff becomes or should become aware of the infringement of rights, regardless of whether the employment relationship has been terminated or not on such date. Furthermore, the Guidelines also stipulate in details such issues as the examination on the reasonableness of agreement, the determination of the amount of statutory rewards and remuneration, jurisdiction, and so on.

The statutory minimums for the amount of the reward and remuneration for service invention or creation provided by The Draft Regulations on Service Inventions which were released by the State Intellectual Property Office (SIPO) for public comment on 12 November 2012 are as follows: (1) for an invention patent or plant variety rights, a total minimum reward of two months’ average employee salary; for other IP rights, including utility model patents, the minimum reward will be one month’ s average employee salary; (2) an inventor should receive at least 5% of the employer’s operating profit (or 0.5% of sales) made from the exploitation of an invention patent/plant variety rights; for other IP rights, 3% (or 0.3% of sales); (3) where the employer assigns or licenses an invention or utility model to another party, the inventor should be remunerated at least 20% of the fees obtained.