The Open Patent Licensing System is a newly established special patent licensing mechanism introduced in the fourth amendment of the Patent Law of the People's Republic of China. It aims to promote the commercialization and utilization of patents, enhance matching efficiency, reduce institutional transaction costs, and bridge the "last mile" in transforming technological achievements into new productive forces.

The following provides a detailed overview of the Open Patent Licensing System:

I. Basic Definition of Patent Open Licensing

The Patent Open Licensing System is a special licensing mechanism newly introduced in the fourth amendment to the Patent Law of the People's Republic of China. It aims to promote patent commercialization, enhance efficiency in patent transactions, and reduce institutional transaction costs, thereby bridging the gap between technological advancements and industrial applications.

Patent open licensing allows a patent holder to voluntarily submit an open license declaration, specifying a fixed licensing fee. The State Council’s Patent Administration Department (China National Intellectual Property Administration, CNIPA) will then publicly announce the license availability. Any entity or individual can obtain the license by notifying the patent holder in writing and paying the published fee, with equal treatment given to all licensees.

II. Procedures for Patent Open Licensing

1. Submission of an Open License Declaration

· The patent holder must complete the Patent Open License Declaration Form, specifying:

o License fee

o License duration

o Other relevant licensing conditions

· The declaration must be submitted to CNIPA, including:

o Patent number

o Patent holder’s information

o Payment method and fee structure

· If the patent holder engages a patent agency to handle the submission, the agency’s name and registration code must be included in the form.

2. Review and Publication by CNIPA

· CNIPA reviews the submitted open license declaration.

· Upon approval, CNIPA publishes the open license details on its official website, including:

o Patent number

o Patent holder’s name

o License fee and payment terms

3. License Implementation

· Any entity or individual intending to use the open-licensed patent must:

o Notify the patent holder in writing

o Pay the license fee according to the published terms

· Upon successful payment, the entity or individual automatically obtains the license to implement the patented technology.

III. Advantages of Patent Open Licensing

1. Facilitates Patent Commercialization

· CNIPA’s public announcement provides an official platform for patent holders and potential licensees to connect.

· This enhances transparency and matchmaking efficiency between supply and demand.

2. Increases Licensing Efficiency

· Eliminates complex negotiations, enabling faster licensing transactions.

· Reduces transaction costs for both parties.

3. Lowers Transaction Risks

· By publicizing licensing terms, the system ensures a level playing field, reducing risks associated with information asymmetry.

4. Patent Annual Fee Reduction

· Patent holders enjoy a 15% reduction in annual fees for the duration of the open license.

· If other patent fee reduction policies apply, the patent holder may choose the most favorable policy, but cannot claim multiple reductions simultaneously.

IV. Key Considerations for Patent Open Licensing

1. Declaration Form Completion Guidelines

· Patent Number & Patent Holder Information:

o The patent number must match the records in the official patent register.

o If the patent has multiple owners, all owners must be listed.

· Patent Agency Information (if applicable):

o The patent agency must be registered with CNIPA and the State Administration for Market Regulation.

o The agency code and designated patent attorney’s name must be provided.

o If no agency is engaged, this section can be left blank.

· Commitment Clause:

o The patent holder must truthfully complete the commitment section.

o If the patent holder is a Chinese entity or individual, or if at least one co-owner is a Chinese entity or individual, a mandatory declaration must be made in Section 4.

· License Duration:

o The duration must be a fixed period, not exceeding the remaining patent term.

2. Licensing Terms and Duration

· Open licensing only allows non-exclusive licenses (ordinary licenses).

· Exclusive or sole licenses are not permitted under this system.

· The license must be granted for at least one year, but can be longer depending on the patent holder’s choice.

3. License Fees and Annual Fee Reductions

· The license fee structure must be predetermined.

· The fee can be:

o Fixed price

o Upfront payment + royalties

o Upfront payment + milestone-based payments

· During the open license period, the patent holder is eligible for a partial reduction in annual patent fees.

4. Dispute Resolution

· Disputes arising from patent open licensing should first be resolved through negotiation between the parties.

· If negotiation fails, the parties may:

o Request CNIPA to mediate the dispute.

o File a lawsuit in a People’s Court.

By following these procedures and regulations, the Patent Open Licensing System enables efficient, transparent, and cost-effective patent commercialization, fostering greater technological innovation and industrial application.