Structuring Tripartite Utility Model Assignment Covenants under PRC Contract Law
Structure tripartite PRC utility model assignments with direct sub-tier developer privity, pre-signed CNIPA filings, and milestone payment holds.
Article 15 Joint Ownership
Meaning
Statutory rules defining default rights among co-owners of patents determine how shared industrial property is exploited and monetized in China. Under article 15 joint ownership, co-owners may agree on exploitation terms, but in the absence of an agreement, each co-owner may exploit the patent independently or grant a non-exclusive license to third parties. The provisions define precise operational boundaries for domestic and foreign joint ventures operating inside Chinese manufacturing jurisdictions.
The requirement stops applying when co-owners execute a written contract that overrides statutory default allocations.
Consent Requirement
Unilateral assignment or exclusive licensing of co-owned patents remains strictly prohibited without unanimous co-owner approval. Co-owners must obtain explicit written agreement from all title holders before executing an assignment or granting exclusive exploitation rights. Non-consensual transfers create no valid legal title for foreign assignees.
Civil courts enforce injunctions against non-compliant licensing arrangements.
Revenue Allocation
Royalty revenues derived from non-exclusive third-party licenses must be distributed among all co-owners according to statutory defaults or prior written terms. The licensing co-owner holds a duty to account for received fees and distribute proportional shares. Direct self-exploitation of the technology by one co-owner requires no payment of royalties to other co-owners unless explicitly agreed in writing.
Financial liabilities for maintenance fees remain jointly shared.
Licensing Default
Statutory defaults preserve individual commercial exploitation rights while preventing predatory third-party transfers. A single co-owner retains authority to grant non-exclusive operational licenses without prior consent, expanding immediate commercial utility. Third-party licensees receive valid operating protection under these non-exclusive grants.
Downstream remedies protect remaining co-owners through mandatory accounting of licensing proceeds.