Patent Pledge refers to the use of the proprietary rights within a patent as collateral. In the event that the debtor fails to fulfill their obligations upon maturity, the creditor has the right to receive priority compensation from the proceeds of the patent transfer.

The following outlines the specific procedures and legal requirements for patent pledging:

I. Legal Basis for Patent Right Pledge

A patent right pledge refers to the act of using the property rights associated with a patent as collateral. If the debtor fails to fulfill the obligation upon maturity, the creditor has the right to priority compensation from the proceeds of the transfer of the pledged patent rights.

The legal basis for patent right pledges in China is established under:

· The Civil Code of the People's Republic of China

· The Guarantee Law of the People's Republic of China

· The Patent Law of the People's Republic of China

The China National Intellectual Property Administration (CNIPA) is responsible for registering patent right pledges.

II. Procedures for Patent Right Pledge

1. Signing a Pledge Contract

· The pledgor (patent holder) and the pledgee (creditor) must sign a written pledge contract. This contract can be a standalone agreement or a guarantee clause in the principal contract.

· The pledge contract must include:

o Names and addresses of the parties

o Type and amount of the secured debt

o Term for the debtor’s performance of the obligation

o Details of the pledged patents, including:

§ Patent name

§ Patent number

§ Application date

§ Grant and publication date

o Scope of the secured pledge

2. Preparation of Application Materials

The following materials must be prepared:

· Patent Right Pledge Registration Application Form, signed or stamped by both parties

· Original Pledge Contract

· Identification documents of both parties or letters of commitment

· Power of attorney, if an agent is appointed, specifying the scope of authority

· Other required materials, such as an asset appraisal report if the patent right has been evaluated

3. Submission of Application

The application can be submitted via mail, in person, or online.

l Online Submission Process

1. Visit the CNIPA patent transaction system: https://cponline.cnipa.gov.cn/

2. Navigate to “Patent Transaction Services” → “Patent Contract Review” → “Patent Right Pledge Registration”

3. Click “New Application” and confirm

4. Fill in applicant information and choose the notification method

5. Add pledged patents by entering the patent number(s) manually or via an imported Excel file

6. Enter contract details and save

7. Input and save pledgor, pledgee, creditor, and debtor information

8. Upload scanned copies of:

o Application form

o Pledge contract

o Supporting documents (scanned as a multi-page PDF)

9. Submit the application

4. Review and Registration

· CNIPA reviews the application within 7 working days from receipt.

· For online submissions, CNIPA may complete the review within 1 working day.

· If approved:

o CNIPA announces the pledge registration in the Patent Gazette

o The pledge is recorded in the patent registry

o The parties receive a Patent Right Pledge Registration Notification

· If rejected:

o CNIPA issues a Special Notice for Patent Right Pledge Registration

o The applicant is informed of deficiencies and required to resubmit materials

5. Issuance of the Patent Right Pledge Registration Notification

· CNIPA delivers the registration notification via:

o Mail (if requested)

o Electronic transmission

o Collection in person at CNIPA or local intellectual property service centers

III. Important Considerations

1. Patent Validity

· The patent must remain valid throughout the pledge period.

· The pledgor must maintain the patent, including timely payment of annual fees.

2. Co-Owned Patents

· If the pledged patent is jointly owned, all co-owners must agree unless otherwise stipulated by contract.

3. Foreign Individuals and Enterprises

· Foreign individuals, enterprises, or organizations without a permanent establishment in China must appoint a legally registered patent agency in China to handle the pledge registration.

4. Document Requirements

· All submitted documents (except identification documents) must be in Chinese.

· If identification documents are in a foreign language, a Chinese translation must be provided; otherwise, the submission is considered incomplete.

· For online submissions, applicants must certify that electronic copies match the original documents and must submit hard copies afterward.

By following these procedures and requirements, patent right pledges can be successfully registered, ensuring the legal validity and enforceability of the pledge.