Tripartite Contract Design for Statutory Invention Compliance in Chinese Agencies
Tripartite agency contracts require Article 4 labor consultation procedures and dual pass-through assignment clauses to override statutory patent payouts.
Article 6
Meaning
Allocating intellectual property rights between employers and individual creators establishes the statutory baseline for industrial research output in China. Under article 6 of the PRC Patent Law, an invention created by an employee while performing duty tasks or workplace assignments belongs to the enterprise. The law distinguishes between job-related creations and non-service creations to determine patent application rights.
Foreign companies funding local research and development entities must align internal labor contracts with this statutory boundary. Where a creation is deemed a service invention, the employer holds the right to apply for the patent, while the individual inventor retains authorship rights.
Ownership Division
Duties specified in job descriptions or assigned project tasks trigger automatic employer ownership of resulting patents. Inventions completed within one year after resignation or retirement fall under employer ownership if they relate to former duties. Non-service inventions remain the private property of individual employees when created outside work scope without utilizing corporate infrastructure.
Resource Nexus
Material and technical conditions include machinery, funds, confidential technical data, or proprietary software not available to the general public. When an employee utilizes company financial backing or internal equipment, ownership defaults to the employer unless private contract terms state otherwise.
Contractual Limitation
Statutory ownership defaults under article 6 can be modified through explicit written agreements between the foreign enterprise and the local employee. Parties may contractually allocate application rights and patent ownership for creations resulting from company resources. Lacking clear contract terms, Chinese courts enforce statutory defaults strictly against foreign employers attempting to claim non-duty inventions.