Reward and Remuneration for Service Inventions: Shanghai Higher People's Court issues Guidelines following controversial China State IP Office's draft regulations last year

The draft Regulations on Service Inventions published by the China State Intellectual Property Office in November last year caused widespread discussions and concerns amongst corporations, to the extent that a number of them have been reconsidering/revamping their R&D strategies in China.

Whilst those are being further considered, the Shanghai Higher People's Court, on 25 June 2013, issued its Guidelines on the Adjudication of Disputes Involving Rewards and Remuneration for the Inventors or Designers of Service Invention Creations.  The Shanghai Guidelines have no binding effect per se, but as a matter of judicial practice, will be followed by lower courts in Shanghai and are generally persuasive to other courts nationwide.

Unlike the SIPO Draft, which proposes a number of highly controversial provisions such as default minimum rewards and remuneration, higher and inconsistent with those provided in the Implementing Rules of the Patent Law, the Shanghai Guidelines clarifies some fundamental issues and are generally welcomed by the industry and IP law practitioners.   We highlight some of the more salient provisions in the Shanghai Guidelines in this note.

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