Employee Inventions-New Developments which Employers should Know

According to PRC law, employee inventions (whether patented or not) are owned by the employer. However, the employer shall pay a remuneration to the employee inventor, who created the employee invention.

For patented employee inventions, rules on remuneration are provided in the Implementation Regulations of the PRC Patent Law (“Implementation Regulations”). The employer and the employee inventor are allowed to reach an agreement on the method and amount of remuneration of patented employee inventions. Without such agreement, the statutory remuneration standards set forth under the Implementation Regulations will apply.

Rules on remuneration for non-patented employee inventions (e.g. know-how, software copyrights, etc.) are stipulated in the PRC Law for Promoting the Transformation of Scientific and Technological Achievements (“LPTSTA”), which was promulgated on 15 May 1996. The LPTSTA does not give room for an agreement on the remuneration. In other words, the statutory remuneration standard in the LPTSTA is mandatory. On 29 August 2015, the PRC Standing Committee of the National People's Congress revised the LPTSTA. The revised LPTSTA will take effect on 1 October 2015.

Click the below Source link to read the main changes on the remuneration for non-patented employee inventions.