The Ministry of Foreign Trade and Economic Cooperation, the State Intellectual Property Office

Opinions of the MOFTEC and the State Intellectual Property Office on Strengthening the Administration of Patents in Foreign Trade

January 24, 2003

Opinions of the MOFTEC and the State Intellectual Property Office on Strengthening the Administration of Patents in Foreign TradeChina’s
accession to the WTO and the progress of the economic globalization have provided a broad space for the development of China’s foreign
trade. In the future, we’ll participate in international economic and technological cooperation and competition in a wider range
and on a higher level. As a member of the WTO, we shall pay special attention to the Trade-Related Intellectual Property Agreement
of the WTO, participate in the coming round of the Agreement, and voluntarily perform our commitments made upon our accession to
the WTO. The MOFTEC and the State Intellectual Property Office (hereafter “SIPO”) have, on the basis of deep research of the intellectual
property (hereafter “IP”) issues in the foreign trade of China, come to the consensus that efforts should be made to protect and
administer the IP rights in foreign trade, we should give full play to the functions of the IP system in the development of enterprises,
and give support and guidance to the enterprises in their employment of relevant IP laws in defending their own interests.

I.

The present Opinions have been formulated according to the Patent Law of the People’s Republic of China, the Foreign Trade Law of
the People’s Republic of China, the Regulation of the People’s Republic of China the Administration of the Import and Export of Technologies,
the Regulation on the Customs’ Protection of Intellectual Property Rights, and other relevant laws and regulation for the purpose
of intensifying the administration of patents in foreign trade, facilitate the enterprises in their prevention and reducing risks
in foreign trade, and promote the healthy development of foreign trade.

II.

The expression “administration of patents in foreign trade” as mentioned in the present opinions refers to the administration of the
affairs relating to patents (including the application for patents) involved in the import and export trade of goods, services, and
technologies.

The affairs relating to patent include the patent literature search, recognition of the legal status of patents, the monitoring of
patent infringement, the trade of patent licenses, the transfer of patent rights (the right to patent application), and the conclusion
and performance of contracts for the transfer or license of patents.

III.

Foreign trade operators shall establish and perfect their patent administration rules according to the requirements of the Measures
for the Administration of the Patents of Enterprises (for Trial Implementation).

IV.

The MOFTEC and the administrative department of foreign trade in all provinces, autonomous regions, and municipalities directly under
the Central Government as well as the SIPO and the organs authorized thereby shall establish a reporting system of the major, important,
and unexpected matters that happen in the administration of patents, and shall intensify the provision of guidance in the administration
of patents.

In order to deal with the major, important and unexpected matters as mentioned in the preceding paragraph, the MOFTEC and the SIPO
shall establish a system of joint meetings on various levels.

V.

Where any patent is involved when any foreign trade business operator imports any goods or imports any of the raw materials or spare
parts for the purpose of processing with the materials supplied by the client or of processing with imported raw materials, the business
operator shall request the exporter or client to provide relevant certificates to prove that it is the lawful holder or lawful licensee
of the patent.

It may be clearly stipulated in the contract for import or entrusted processing that if the importer of goods or the trustee to the
contract of entrusted processing is charged by any third party for patent infringement or is involved in any other dispute of patent,
the legal liabilities shall be borne by the exporter or the trustor.

VI.

Where the transfer of any patent or patent application right or the license of patent right is involved in the import of technology
or equipments by any foreign trade business operator, the transferrer or the licenser shall be required to show the certification
documents that proves the validity of the patent or the certification materials that proves the existence of the right to apply for
patents. Where it is necessary, it shall retrieve the patent documents within the technical fields at the patent service institutions
acknowledged by the SIPO or the organs authorized thereby so as to avoid infringing upon the patent right of any third party.

VII.

Where any new technology or invention is involved in the export of goods by any foreign trade business operator, the operator shall
retrieve the patent documents of the country or region where the importer is located within the technical fields of the patent so
as to prevent the export goods from infringing upon the patent right of the country or region where the goods are exported to. Where
it is necessary and it is possible, it may file an application beforehand or concurrent for patent to the country or region where
the importer is located.

VIII.

Where any foreign business operator exports any technology or equipment, it shall retrieve the patent documents of the country or
region where the importer is located within the technical fields of the technology so as to avoid infringing upon the patent right
of any third part. Where it is necessary and it is possible, it may file an application beforehand or concurrently at the country
or region where the importer is located.

IX.

Where the transfer of any patent or of any patent application right is involved in the import or export by any foreign trade business
operators, an contract for the transfer of patent rights or patent application rights shall be entered into. If the license of any
patent is involved, a contract for the license of patent shall be entered into.

In the conclusion of contracts of the transfer of patent rights or patent application rights, the Regulation of the People’s Republic
of China on the Administration of the Import and Export of Technologies shall be abided by.

X.

With a view to protecting the rights and interests of both parties to contracts, a contract for the license of patents may include
the following clauses:

1.

Contents of the patent license, including the all or part of the contents of the production, use, promise to sell or import the patented
goods;

2.

Whether the licensee is enpost_titled to license any other person to use the patent of the licenser;

3.

The countries and regions where the patented goods may be sold;

4.

In case the contract expires while the valid term of the patent has not expired, whether the licensee may continue to use the patent;

5.

The attribution of the right to apply for intellectual property protection to the inventions or creations jointly accomplished by
both parties in the process of the performance of the contract;

6.

The ex officio license of the new inventions and creations accomplished by the licenser in the performance of contracts or any other
provisions;

7.

The use of the know-how and the exchange of relevant materials relating to the implementation of the patent concerned and the relevant
technological services and technological training necessary for the implementation of the patent concerned;

8.

The use of relevant know-how, the matters of confidentiality, etc.;

9.

The responsibilities to be borne when the patented goods cannot meet the technical standards or qualities as agreed upon in the contract.

XI.

All foreign trade business operators shall make customs archivist files of relevant patents in conformity with the Regulation on the
Customs’ Protection of Intellectual Property Rights. Where any of them finds that any import or export goods might infringe upon
its patent right, it may plead the customs or the administrative department of patents, according to the Regulation on the Customs’
Protection of Intellectual Property Rights or other relevant laws and regulations, to take protective measures.

XII.

The MOFTEC and the organs authorized thereby as well as the SIPO and the organs authorized thereby shall supervise and inspect the
making of rules for the administration of patents of the foreign trade business operators and the activities of patent management
or business operation.

XIII.

The present Opinions shall be subject to the interpretation of the MOFTEC and the SIPO, and shall be implemented by reference 30 days
after publication.