Meaning
The administrative provision defining the default financial compensation for inventors of service inventions provides the baseline for corporate reward schemes in China. According to Chinese Patent Law Implementing Regulations Article 78, a company must pay a lump sum or a percentage of the licensing revenue to the inventor if no contract exists. This obligation starts once the patent is granted and continues throughout its commercial exploitation.
Compensation Baseline
The default rates require a payment of at least two percent of the profits derived from exploiting the patent. Alternatively, if the patent is licensed to a third party, the inventor must receive at least ten percent of the license fee. This default mechanism protects the financial interests of researchers when agreements are absent.
Statutory Threshold
These percentages represent a minimum standard that companies cannot unilaterally reduce. They ensure that inventors receive a fair share of the economic returns generated by their work. This prevents corporations from exploiting the silence of employees.
Corporate Compliance
Firms usually design internal invention reward policies to override these high default percentages. A custom plan must be adopted through a consultation process with the company union. This reduces the risk of unexpected compensation claims.
