A foreign business may jointly own a Chinese patent with a manufacturer, research partner or another group company. When a distributor requests exclusive rights, the commercial team needs more than a certificate showing the business’s name. The immediate questions are which agreement governs the co-owners, what permissions already exist and who can approve the proposed commitment.
This review concerns a Chinese patent or patent application. A global development agreement may cover several jurisdictions, several inventions and rights that have not yet been filed. Match each proposed transaction to the particular Chinese right before assuming that a permission concerning the project covers every patent.
Start with the co-ownership agreement
Article 14 of the Patent Law as amended in 2020 gives priority to the co-owners’ agreement on exercising the rights. Collect the development agreement, schedules, amendments, assignment documents and later permissions. Identify the parties by their legal names and check whether the relevant patent application or granted right is actually included.
Separate ownership provisions from operating instructions. A clause assigning responsibility for prosecution, fees or communications with an agent may not authorise that party to grant every type of licence. Likewise, an internal budget approval does not establish the consent of a separate co-owner. Read the operative wording and preserve the complete document rather than a summary in a project presentation.
If the agreement is missing, obtain the records from both sides and note the uncertainty. Do not replace an unavailable signed schedule with a newly prepared list represented as contemporaneous. A later written clarification can be useful, but it should carry its true date and explain what it confirms.
Apply the statutory default carefully
Where there is no agreement, Article 14 permits a co-owner to implement the patent independently or license another person through an ordinary, non-exclusive licence. Royalties collected from licensing must be distributed among the co-owners. The provision does not specify an automatic equal split in its text; establish the applicable allocation rather than inventing one.
Outside the circumstances covered by its first paragraph, Article 14 requires all co-owners’ consent to exercising the jointly owned patent application right or patent right. A proposed exclusive arrangement therefore needs a separate authority review. The fact that one co-owner could give an ordinary licence under the default rule does not establish authority to promise exclusivity.
For example, in a hypothetical joint development project, the overseas partner proposes that only one distributor may manufacture the patented product in China. Before signing, compare that promise with the co-owner agreement and any existing ordinary licences. The commercial objective cannot itself remove another party’s existing contractual position.
Build an existing-permissions register
Ask each co-owner for licences, amendments, renewal notices and relevant settlement permissions. Record the patent number, licensee, territory, permitted acts, duration, exclusivity wording and sublicensing terms. Include documents described as supply arrangements or cooperation letters where they may contain patent permissions.
Article 12 addresses patent licensing and provides that a licensee cannot authorise entities or individuals outside the contract’s permission to implement the patent. Where a factory relies on a distributor’s consent, follow the chain back to the licence. A branded purchase order alone may not answer whether sublicensing or the particular manufacturing arrangement was authorised.
Keep royalty records separately from the permission register. Invoices, receipts and allocation statements help identify what was paid and to whom. They should be connected to the relevant agreement and accounting period. A dispute about distribution among co-owners should not be assumed to make every downstream transaction unauthorised without examining the legal basis.
Document approval for the actual transaction
Prepare a short decision sheet specifying the Chinese rights, proposed counterparty, permitted conduct, term and commercial restrictions. Attach the draft licence or settlement and identify any promises that affect existing arrangements. Obtain the necessary agreement or consents from the correct legal entities through authorised signatories.
If the proposal is a transfer, treat it separately. Article 10 requires a written contract and registration with the patent authority; the transfer takes effect from registration. It also requires compliance with relevant laws and administrative regulations for transfers by a Chinese entity or individual to a foreign recipient. Check those requirements rather than treating an executed commercial document as the complete transfer process.
Retain the final executed version, approval evidence and the official records relevant to the transaction. A draft approval email and a completed official registration are different records. Keep any outstanding step visible in the file so that commercial announcements do not run ahead of the underlying rights.
Review authority before an enforcement response
When suspected infringement arises, preserve the product and seller evidence while reviewing ownership and permissions. A permission granted by another co-owner may materially affect the proposed allegation. Check it before describing the other business as an unlicensed user.
Separately assess who may bring the particular claim, how other co-owners should participate and who may settle, release claims or grant future rights. This requires the governing agreement and the procedural rules for the chosen route; co-ownership alone does not settle every litigation question.
Contact Pan Jianxing with the Chinese patent number, the co-owner names and a non-confidential description of the proposed licence or dispute. The initial review can identify the missing permissions and documents before a binding commercial commitment is made.
Official sources & legal review
Legal position checked 2026-10-22. Official Chinese texts govern; the English analysis is a summary.
General information about mainland China. The applicable law, rights, evidence and procedure require review for a specific matter.
Pan Jianxing
China-qualified lawyer · Partner, 北京市长安律师事务所
Beijing & Shenzhen
Discuss a China IP matter →