Standards of Reward and Remuneration for Work-related Inventions

On December 11, 2023, the State Council announced the Decision of the State Council on Amending the Implementation Regulations for the Patent Law of the People’s Republic of China. The amended and revised Implementation Regulations for the Patent Law of the People’s Republic of China (“New Implementation Regulations”) will become effective on January 20, 2024. For enterprises, the New Implementation Regulations may increase the burden on enterprises in terms of rewards and remuneration for work-related inventions if enterprises have not yet formulated their own rules or entered into agreements with their employees. Details are as follows:

“Work-related invention” and “work-related scientific and technological achievement” have different definitions under current Chinese laws but the two concepts have overlapping content which leads to the controversy about whether the provisions of the Law of the People’s Republic of China on Promoting the Transformation of Scientific and Technological Achievements may apply to the reward and remuneration of work-related inventions. The New Implementation Regulations unifies the controversy and increases the statutory reward standard at the same time. For enterprises, if the enterprise already has internal rules for work-related invention reward and remuneration or corresponding agreements, the New Implementation Regulations will not have a substantial impact; on the contrary, for enterprises that have not yet formulated corresponding internal rules or relevant agreements, it is recommended to fill this gap as soon as possible, otherwise, they may have to pay high fees to employees for work-related inventions in the future based on statutory standards.