CHAPTER I GENERAL PROVISIONS
CHAPTER II ARRANGEMENTS FOR IMPLEMENTATION
CHAPTER III GUARANTEE MEASURES
CHAPTER IV TECHNOLOGICAL RIGHTS AND INTERESTS
CHAPTER V LEGAL RESPONSIBILITY
CHAPTER VI SUPPLEMENTARY PROVISIONS
Article 1 This law is enacted for the purpose of promoting the transformation of scientific and technological achievements into
real productive forces, standardizing such transformation, hastening scientific and technological progress and facilitating
economic and social development.
Article 2 The phrase “transformation of scientific and technological achievements” as used in this Law means the entire process of
the follow-up tests, development, application and widespread use of the applicable scientific and technological achievements,
made as a result of scientific research and technological development, through to the final creation of new products, new
techniques, new materials and new industries — all for the purpose of enhancing the productive forces.
Article 3 Transformation of scientific and technological achievements shall be instrumental to increasing economic and social results
and protecting the environment and natural resources, as well as to promoting economic and social development and
strengthening national defense.
In transforming scientific and technological achievements, the persons concerned shall abide by the principles of voluntariness,
mutual benefit, fairness and good faith and shall, in accordance with law or contractual agreement, enjoy interests and
bear risks. Intellectual property involved in transformation of scientific and technological achievements shall be protected
by law.
In transformation of scientific and technological achievements, laws shall be observed and State interests safeguarded,
and no public interests shall be damaged.
Article 4 The administrative department for science and technology, the planning department, the administrative department for comprehensive
economic and trade affairs and other relevant administrative departments under the State Council shall, within their
functions and responsibilities as prescribed by the State Council, administer, guide and coordinate efforts for the
transformation of scientific and technological achievements.
The local people’s governments at various levels shall be responsible for administering, guiding and coordinating efforts
for the transformation of scientific and technological achievements within their respective administrative regions.
CHAPTER II ARRANGEMENTS FOR IMPLEMENTATION
Article 5 The State Council and the local people’s governments at various levels shall incorporate the transformation of scientific
and technological achievements in their notional economic and social development plans and make arrangements and coordinate
efforts for the transformation of scientific and technological achievements.
Article 6 The relevant departments under the State Council and the people’s governments of provinces, autonomous regions and municipalities
directly under the Central Government shall, at regular intervals, publish catalogues of scientific and technological
achievements and handbooks of major projects for transformation of scientific and technological achievements and shall
give first priority and assistance to the following:
(1) projects that will noticeably help raise the industrial and technical level and increase economic results;
(2) projects of an industrial scale that can compete among the economies of the world;
(3) projects that can help rationally develop and utilize the natural resources, conserve energy, reduce material consumption
and prevent and control environmental pollution;
(4) projects that can facilitate high-yield, high-quality and high- efficiency farming and promote economic development in the
countryside; and
(5) projects that can help accelerate the social and economic development in areas inhabited by minority nationalities
and outlying and poverty-stricken areas.
Article 7 The State, by adopting appropriate policies and measures, promotes and encourages the use of advanced technology, techniques
and equipment and continued improvement, restricted use and elimination of backward technology, techniques and equipment.
Article 8 When making arrangements for transformation of major scientific and technological achievements, the people’s governments
at various levels may have relevant departments to arrange for the transformation through public bidding. These departments
shall provide the successful tender with the funds and other conditions that they decided to offer when making the bidding.
Article 9 Holders of scientific and technological achievements may have their achievements transformed in the following ways:
(1) investing in the transformation themselves;
(2) transferring their achievements to another;
(3) allowing another to use their achievements;
(4) working together with another for the transformation with their achievements as the conditions for cooperation; and
(5) investing with their achievements as trade-in, as converted shares or as proportions of contribution to the investment.
Article 10 An enterprise may, for the purpose of adopting new technology, new techniques and new materials and manufacturing
new products, publish information on its own or entrust an intermediate institution engaged in trade of technology to solicit
the scientific and technological achievements that it needs or to find collaborators for the transformation of scientific
and technological achievements.
Article 11 An enterprise shall, according to law, have the right to conduct transformation of scientific and technological achievements
independently or jointly with domestic or foreign enterprises or institutions or other collaborators.
An enterprise may, through fair competition, undertake the projects, arranged by the government, for scientific and technological
research and development or for the transformation of scientific and technological achievements independently or
jointly with another.
Article 12 The State encourages research and development institutions, colleges and universities and other institutions to join efforts
with manufacturers for the transformation of scientific and technological achievements.
Research and development institutions, colleges and universities and other institutions may participate in the bidding or tendering
conducted by relevant departments of the government or enterprises for transformation of scientific and technological
achievements.
Article 13 The State encourages agricultural research institutions and agricultural experiment and demonstration stations to transform
scientific and technological achievements independently or in cooperation with another.
Agricultural research institutions may, for the purpose of advancing the transformation of their scientific and technological achievements
and in accordance with law, deal in the fine strains which they breed through their own research or in cooperation with another
and which are approved after examination.
Article 14 With regard to scientific and technological achievements worth applying that are made by persons while holding positions in
the research and development institutions set up by the State or in colleges and universities, if the units concerned
fail to make timely transformation of the achievements, the persons who made the achievements and the participants
may, on condition that ownership of the achievements remains unchanged and in accordance with the agreement they reached with
the units they belong to, transform the achievements, and they shall enjoy the rights and interests as stipulated in the
agreement. And the units concerned should assist in the transformation of the scientific and technological achievements mentioned
above.
Persons who made the scientific and technological achievements or leading members of a research project may not obstruct
transformation of the scientific and technological achievements they made while holding positions in the units or take
into their own possession such achievements or thus encroach upon the lawful rights and interests of the units they
belong to.
Article 15 Units that made scientific and technological achievements, units that conduct transformation of the achievements and units
that invest in such transformation shall sign a contract if they intend to cooperate in the follow-up tests, development
and application of the achievements as well as their putting into production and operation, in which to stipulate the rights
to be enjoyed and the risks to be borne by each party.
Article 16 In testing and evaluating scientific and technological achievements in the course of their transformation, the principles
of impartiality and objectiveness shall be adhered to; it is not allowed to provide false testing results or evaluation certificates.
When research and development institutions that are set up by the State, colleges and universities or State-owned enterprises work
together with enterprises, other organizations or individuals from outside China in transforming scientific and technological
achievements, they must evaluate the achievements in accordance with relevant regulations of the State.
Where State secrets are involved in transforming scientific and technological achievements with the cooperation of
other countries, prior approval must be obtained through the procedures stipulated by law.
Article 17 In places or agencies set up according to law for the exchange of technology, the following activities to promote
transformation of scientific and technological achievements may be conducted:
(1) introducing or recommending scientific and technological achievements that are advanced, matured and applicable;
(2) providing economic, technological, environmental and other information needed for transformation of scientific and
technological achievements;
(3) trading in technologies; and
(4) providing other advisory services for transformation of scientific and technological achievements.
Article 18 Intermediate institutions acting as agent or intermediaries or providing other paid services in the exchange of technologies
must obtain business licenses as required by relevant State regulations. Brokers of these institutions must have qualification
certificates as required by relevant State regulations.
Article 19 The State encourages enterprises and institutions and economic cooperative organizations engaged in scientific
and technological activities in the countryside to conduct intermediate and industrial experiments, agricultural experiments
and demonstrations and other technological innovations and to provide technical services.
The following activities may be engaged in the bases for conducting intermediate and industrial experiments, agricultural
experiments and demonstrations for the purpose of transforming scientific and technological achievements and in
other institutions that are engaged in technical innovations or provide technical services:
(1) conducting intermediate and industrial experiments with regard to new products and new techniques;
(2) engaging in ancillary development and technical innovation for the systematization and engineering of scientific and
technological achievements in different areas or trades to serve the community;
(3) providing technology or technical services to small and mediumsized enterprises, township enterprises, and economic
cooperative organizations engaged in scientific and technological activities in the countryside; and
(4) providing all-round services in support of transforming high- technology achievements and establishing enterprises
for the transformation.
Capital construction of the bases and institutions mentioned in the preceding paragraph shall have to be approved by the relevant
department under the State Council and the people’s governments of provinces, autonomous regions and municipalities
directly under the Central Government and shall be included in the relevant plans of the State or the local authorities.
Article 20 Trial products from the transformation of scientific and technological achievements may be provided for test marketing within
the verified period for trial sale, in accordance with State regulations governing products for trial sale and after approval
by the relevant department. Trial manufacturing and test marketing of the products mentioned above shall meet the technical,
quality, safety, health and other standards prescribed by the State.
Article 21 Of the funds the government allocates to scientific and technological undertakings, to investment in fixed assets and
to technological updating, a certain proportion shall be used for transforming scientific and technological achievements.
This proportion of government funds shall be chiefly used as initiation funds, discount loans, subsidy funds, risk investment
and other funds for promoting transformation of scientific and technological achievements.
Article 22 The State adopts a preferential tax policy regarding transformation of scientific and technological achievements. Specific
measures shall be formulated by the State Council.
Article 23 State banking institutions shall support transformation of scientific and technological achievements in matters of loans
and gradually increase the amount of loans extended for such transformation.
Article 24 The State encourages establishment of funds or risk funds for transformation of scientific and technological achievements, such
funds shall be raised by the State, local authorities, enterprises, institutions and other organizations and individuals
and shall be used to aid transformation of such scientific and technological achievements as need substantial investment,
involve considerable risks and promise high yields and to accelerate the application of major scientific and technological
achievements in industrial production.
Funds and risk funds for transformation of scientific and technological achievements shall be established and used in accordance
with relevant regulations of the State.
Article 25 The State promotes the establishment and expansion of scientific and technological information networks and the establishment
of a data bank of scientific and technological achievements, both of which shall provide information services regarding
such achievements throughout the country.
CHAPTER IV TECHNOLOGICAL RIGHTS AND INTERESTS
Article 26 When a unit that made scientific and technological achievements and another unit join efforts to transform
the achievements, the ownership of rights and interests related to the achievements shall be stipulated in a contract
in accordance with law. What is not stipulated in the contract shall be handled according to the following principles:
(1) Where no invention or creation ensures from transformation of a scientific or technological achievement, the rights
and interests related to the scientific or technological achievement shall belong to the unit that made the achievement;
(2) Where inventions or creations ensue from collaborated transformation of a scientific or technological achievement, the rights
and interests related to the inventions or creations shall belong to both parties in collaboration; and
(3) As to the scientific and technological achievements made through collaborated transformation, both parties shall have the
right to put into practice the achievements thus made; consent shall have to be obtained from both parties in collaboration
for transfer of the said achievements.
Article 27 When a unit, that made scientific and technological achievements, and another unit collaborate to transform
the achievements, both parties shall reach an agreement on protection of the technical know-how; the parties may not,
running counter to the agreement or the request of the obligee for keeping the technical know-how, disclose or let
another use the technical know-how.
Agencies of technological exchange and intermediate institutions shall be obligated to keep secret the technical know-how
of the parties concerned, which they come to know while serving as an agent or an intermediary.
Article 28 Enterprises and institutions shall establish a system for protection of the technical know-how and keep improving it, in order
to guard the technical know-how of their own. Employees shall adhere to the system of their own units for protection of the
technical know-how.
Enterprises and institutions may sign an agreement on protection of their technical know-how with the employees who participate
in the transformation of scientific and technological achievements during the period when they remain in employment or within
a specified period of time after they leave office or retire; the said employees may not, in violation of what is agreed
on, disclose the technical know-how of their own units or engage in transforming the same scientific or technological achievement
as that of their own units.
No employees may transfer, without authorization, the scientific or technological achievements they made while holding positions
in their units or do so in disguised form.
Article 29 When transferring a scientific or technological achievement made by employees while holding positions in a unit, the unit shall
take not less than 20 percent of the net income, obtained from transfer of the achievement, to award persons who made important
contributions to the scientific or technological achievement or to its transformation.
Article 30 If a scientific or technological achievement, that is made through the independent research and development of an enterprise
or institution or through research and development of the enterprise or institution with the collaboration of another
unit, is transformed successfully and is adopted in production, the unit or units shall take, for three to five years running,
not less than five percent of the added profits from adoption of the achievement, that they are enpost_titled to retain, to
award persons who made important contributions to the scientific or technological achievement or to its transformation.
In respect of the remunerations or rewards given to persons who made important contributions to research and development of
scientific and technological achievements or their transformation, joint stock enterprises may convert them into shares
or proportions of contribution to investment in accordance with relevant regulations of the State. The persons, as shareholders,
shall draw proceeds on the strength of the shares they hold or their proportions of contribution to investment.
Article 31 Anyone who, in violation of the provisions of this Law, resorts to deception in transformation of scientific or technological
achievements and thus gets an award or honorary post_title, fraudulent money or illegal profits, shall be ordered to put it right,
the award and honorary post_title shall be annulled, the illegal gains confiscated, and a fine also imposed on him. If he causes
economic losses to another, he shall bear civil liability for compensation in accordance with law. If a crime is constituted,
criminal responsibility shall be investigated according to law.
Article 32 Anyone who, in violation of the provisions of this Law, deliberately provides a false testing result or evaluation certificate
after testing or evaluating a scientific or technological achievement shall be ordered to put it right and given a disciplinary
warning, his illegal gains shall be confiscated, and the institution that arranged for the testing and the evaluation institution
shall each be imposed with a fine. If the case is serious, the business license and qualification certificate
shall be revoked. If economic losses are caused to another, civil liability for compensation shall be borne in accordance
with law.
Article 33 Employees of administrative departments for science and technology and other relevant departments of the people’s governments
at various levels who neglect their duties or practise irregularities for personal gain shall be given administrative sanctions;
if the case constitutes a crime, criminal responsibility shall be investigated in accordance with law.
Article 34 Whoever, in violation of the provisions of this Law, usurps another’s scientific or technological achievement by means
of instigation, luring or coercion and thus encroaches upon the rights and interests of that person shall bear civil liability
for compensation in accordance with law and may be imposed with a fine. If the case constitutes a crime, criminal
responsibility shall be investigated in accordance with law.
Article 35 If, in violation of the provisions of this Law, an employee who, without permission of his unit, discloses the technical know-how
of the unit or, without authorization, transfers or does so in disguised form the scientific or technological achievement
made while holding a position in the unit, or if a person who took part in the transformation of a scientific or technological
achievement, running counter to the agreement reached with his unit, engages in transforming the same scientific or
technological achievement as that of his unit during the agreed period of time after leaving office or retiring shall bear legal
responsibility in accordance with relevant regulations.
Article 36 If in the exchange of technologies the intermediate institution that serves as an agent or provides intermediary services
or the broker deceives the client or colludes with one party to deceive another party, it or he shall be ordered to put
it right, given a disciplinary warning and, in addition to bearing civil liability for compensation in accordance
with law, the illegal gains shall be confiscated and a fine imposed. If the case is serious, the business license
and qualification certificate shall be revoked in accordance with law. If the case constitutes a crime, criminal responsibility
shall be investigated in accordance with law.
CHAPTER VI SUPPLEMENTARY PROVISIONS
Article 37 This Law shall be put into force as of October 1,1996.
