Supreme People's Court Final Judgment Confirms: In the Absence of a Written Technology Transfer Contract, the Right to Apply for a Patent Shall Vest i

Recently, the Intellectual Property Court of the Supreme People's Court of the People's Republic of China rendered a final judgment in a dispute over the ownership of the right to apply for an invention patent, holding that the patent application filed by Company A and Company B for "a single-tube structure of a high-performance annular concrete communication tower and a method for preparing the same" had its technical solution substantially derived from technical materials provided by Company C, and that the right to apply for the patent should belong to Company C.

Company C is an enterprise engaged in the manufacture of cement products. Starting from May 2020, the company commenced research and development on high-performance concrete communication towers, involving multiple R&D tasks including concrete mix proportion development, tower design finalization, and mechanical performance testing. Between November and December 2021, Mr. Shen, Chief Engineer of Company C, transmitted technical materials—including engineering site photographs, technical drawings, and production process flows—via an instant messaging platform to Mr. Guan, who was then engaged as a technical advisor to Company A. Mr. Guan subsequently forwarded the above materials to Company A and Company B.

During this period, Mr. Liu C, the de facto controller of Company A, transferred RMB 300,000 to Mr. Liu B, the legal representative of Company C. However, the parties did not enter into a written technology transfer contract with respect to the technical materials in question, nor did they make any agreement regarding the ownership of subsequent R&D outcomes.

On July 22, 2022, Company A and Company B jointly filed the invention patent application in question with the China National Intellectual Property Administration, listing among the inventors 12 individuals including Mr. Guan.

In December 2022, Company C sent a notice letter to Company A and Company B, asserting that the unauthorized use of its technical materials for patent application purposes constituted an infringement of its trade secrets and its right to apply for the patent. Company A and Company B replied denying the infringement. Thereafter, Mr. Liu C, the de facto controller of Company A, proactively contacted Company C and expressed a willingness to list Company C as a joint patentee.

Company C subsequently filed a lawsuit before the Hangzhou Intermediate People's Court of Zhejiang Province, seeking a declaration that the right to apply for the invention patent in question belonged to it. After trial, the court of first instance ruled in favor of Company C's claim. Company A, Company B, and Mr. Guan all appealed to the Supreme People's Court.

The core dispute in this case centered on whether the technical solution of the patent in question was derived from the technical materials provided by Company C, and whether Company C had made an inventive contribution to the substantive features of that technical solution.

Upon trial, the Supreme People's Court held that the evidence on record merely established that Company A and Company B had obtained technical materials from Company C and paid RMB 300,000, but there was no evidence proving that such payment was related to the ownership or transfer of the technical solution of the patent in question, nor was there evidence showing that the parties had reached a mutual agreement on the technology transfer. Pursuant to Article 863 of the Civil Code of the People's Republic of China, which provides that "technology transfer contracts and technology licensing contracts shall be concluded in writing," the contention of Company A and Company B that payment of consideration automatically conferred ownership of the technical materials could not be sustained.

Furthermore, upon a claim-by-claim comparison between the patent application's claims and the technical materials provided by Company C, the court found that the two were substantially consistent in terms of the technical field, the intended purpose of the invention, and the technical problems to be solved, and that the substantive inventive features of the patent had already been reflected in the technical materials. Although Company A and Company B asserted that the patent was the result of their own independent R&D, they failed to produce any records of the R&D process, experimental data, or other evidence to support that assertion.

Accordingly, the Supreme People's Court, based on Article 6, paragraph 2, of the Patent Law of the People's Republic of China (providing that "for a non-service invention-creation, the right to apply for a patent belongs to the inventor or designer") and the rules of burden of proof under the Civil Procedure Law of the People's Republic of China, held that Company C had made an inventive contribution to the substantive features of the technical solution of the patent in question, and that the right to apply for the patent should vest in Company C.

This case demonstrates that a technology transfer contract is a statutory formal contract. Although Article 490, paragraph 2, of the Civil Code provides that "where a contract is required by law or administrative regulations, or as agreed by the parties, to be concluded in writing, and the parties fail to do so but one party has already performed its main obligations and the other party accepts the performance, the contract is formed," in this case, Company A and Company B failed to prove that the RMB 300,000 payment constituted technology transfer consideration. In other words, they did not establish that they had performed the main obligations under the technology transfer contract in question. Consequently, the technology transfer contract was not formed.

In addition, this case further clarifies that a party claiming to have made an inventive contribution to an invention-creation must provide evidence—such as R&D process records, experimental data, and other materials—that demonstrates the specific progression of the technical concept from the prior art to the patented technical solution. Mere indirect evidence, such as the inventor's professional title or R&D capability, is insufficient to establish such a claim.