By Yan Zhao and Max Lin, Foley & Lardner LLP
This article is part of our Fall 2010 edition of Legal News: China Quarterly Newsletter, Eye on China.
On August 26, 2010,
Patent Pledge Contract
Under the Regulation, the pledgor and pledgee shall first enter into a written contract for a patent pledge. The pledge contract can be either a separate agreement or a clause in a master agreement. Notably, the patent pledge contract will not become effective until it has been registered with SIPO.
Further, the pledge contract shall include certain mandatory provisions such as 1) type and amount of collateralized debt; 2) terms of fulfilling the debt; 3) number of patent(s) and details of the patent(s), such as title, patent number, application date, and grant date; and 4) extent guaranteed by the pledge.
In addition, consensus among co-owners shall be required for pledge of co-owned patent(s).
Registration of Patent Pledge Contract
The following documents shall be submitted for registration of a patent pledge contract with SIPO:
Except for item 3, above, all the documents shall be in Chinese. If item 3, above, is in a foreign language, a Chinese translation is required.
SIPO will, within seven working days after receipt of the registration materials, examine the materials and decide whether the registration shall be approved. Upon approval, SIPO will publish the patent pledge in patent journals, including the name of the pledgee and pledgor, IPC classification number, patent number, date of grant, and date of pledge registration.
Upon expiration or invalidation of the subject patent(s), SIPO will revoke the patent pledge registration and notify the parties.
During the patent pledge term, transfer, licensing, or surrender of the subject patent(s) shall require the pledgee’s pre-approval.