October 2, 2024 | less than a minute read

Multinational Patent Deal Complications

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Michael McNamara

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Get in touch

Michael McNamara

Member

Import, Export, Logistics concept - Map global partner connection of Container Cargo freight ship for Logistic Import Export background (Elements of this image furnished by NASA)

Entering into a patent purchase transaction is complicated. Not surprisingly, purchasing assets that include Chinese originated technology is even more complicated. Before signing a deal, make sure the diligence period allows for securing the appropriate certificates.

Many countries regulate exportation of sensitive technology. The United States regulates the exportation of certain technology related to national security, nuclear nonproliferation, and the like. China takes this regulation to a much more complicated degree. The China National Intellectual Property Administration requires a registration certificate prior to recording an assignment to a foreign entity. That is true even for “freely exportable” technology. Securing those certificates can break a deal if the diligence window is too short.

IP Watchdog recently put out a great article diving into the detail of that system.

Note that even if a Chinese patent application or patent covers a freely exportable technology, the China National Intellectual Property Administration (CNIPA) will still need a registration certificate from the Ministry of Commerce (MOFCOM) to record the assignment from a Chinese entity to a foreign entity. This article will discuss the procedures to obtain a registration certificate or export certificate for freely exportable and restricted technologies, respectively, and conclude with some example scenarios involving multinationals with Chinese inventors.