(By Wang Ting and You Yunting) Today we will discuss the legal restrictions and application procedures in regard to the introduction of foreign software into China.
- Copyright Protection of Imported Software
The Protection of Computer Software Regulations dividends the protection of imported foreign software into two types:
- Software first distributed within the territory of China shall have copyright;
- Software concluded with China by the countries to which the creators belong or in which the creators reside habitually or under the international conventions to which China is a member state shall enjoy its copyright.
China has concluded the Berne Convention for the Protection of Literary and Artistic Works with more than a hundred countries in the world. Taking that into consideration, under most circumstances if the requirements above can be met, the creator of the introduced software can cite the convention to gain copyright protection which is equal to Chinese citizens.
- Restrictions imposed on imported software’s technical improvements
Software copyright is considered as a civil right for creators to transfer rights or grant license to others. However, in view of the fact that some certain technology is involved in the software, it would be deemed as technology import if any citizen or legal person shall introduce software from abroad. Where a software copyright is transferred or granted to others, a written contract should be signed between the parties involved.
However, in regard to the ownership of imported software’s technical improvements, there are three limitations abided by the law of China.
(1) According to the Regulations on Technology Import and Export Administration, within the term of validity of a contract for technology import, an achievement made in improving the technology concerned belongs to the party making the improvement.
(2) The Interpretation of the Supreme People’s Court concerning Some Issues on Application of Law for the Trial of Cases on Disputes over Technology Contracts regulates what is called “illegally monopolizing technology and impairing technological progress”; that is, prohibiting the technology accepter from conducting research and development on the basis of the contractual subject or employing the improved technology.
(3) The Contract Law regulates that “A technology contract which illegally monopolizes technology, impairs technological advancement or infringes on the technology of a third party, is invalid.”
Apparently, laws and regulations in China are to the advantage of Chinese corporations in spite of their inconformity with international practice. Although these regulations are seldom cited by courts in China, they still enjoy some extent of deterrence. Therefore, when it comes to contract dispute, foreign corporations currently would try to avoid jurisdiction by courts or regulations in China by choosing applicable law and dispute resolution organization.
- Contract registration of imported software
Pursuant to the provisions of the Foreign Trade Law and the Regulations on Technology Import and Export Administration, apart from technologies which are totally banned to be imported, so as to technologies whose import are restricted, a license has to be applied to the Ministry of Commerce. For technologies other than the above two types, free import and export of technologies are allowed by the country.
In respect of import of a technology restricted from import, an application for technology import shall be filed with the Ministry of Commerce. Where an application for technology import is approved and a letter of intent for licensing the technology import, an import operator may sign a contract for technology import with its overseas counterpart, after which a technology import license should be applied to the Ministry of Commerce.
Technologies freely importable shall be subject to the contract registration system and registration shall be made with the Ministry of Commerce. A contract for importing a freely importable technology takes effect from the time when the contract is established according to law, without taking the registration thereof as a condition for the contract to be effective. That is to say, a contract is still effective even though there is no registration. Where the contract is registered, the Ministry of Commerce shall issue the certificate of registration of the technology import contract.
Applicants shall use the technology import license or certificate of registration of technology import contract to go through the foreign exchange, banking, taxation and customs formalities.
Where a technology import contract licensed or registered according to the Regulations on Technology Import and Export Administration is changed in terms of the main contents thereof, the formalities shall be gone through once again for the license or registration thereof. Any licensed or registered technology import contract which has terminated shall be submitted with the Ministry of Commerce.
- Products registration of imported software
Registration of a technology import contract is not equal to being immediately allowed to conduct commercial activities relating to the software within the territory of China for the reason that marketing and sales are not allowed in China without the registration and record of the filing.
According to the Regulations on Administration of Software Products issued by the Ministry of Industry and Information Technology, the registration and filing of an imported software product shall be undertaken by the relevant importer. What should be noted here is that at the applying for registration of the software, Software Copyright Registration Certificate should be submitted.
Software products meeting the requirements of registration and filing shall be issued with software product registration number and certificate. The validity term of software product registration is five years, after which the period can be extended if applied.
Lawyer Contacts
You Yunting：86-21-52134918 youyunting@debund.com/yytbest@gmail.com
Disclaimer of Bridge IP Law Commentary
Short Link: