Article 21 Foreign investors’ capital contribution, profits, capital gains, assets disposal income, intellectual property license fees, legally obtained compensation or damages, liquidation income, etc., in China may be freely remitted in RMB or foreign exchanges from or to China according to law.

This amendment clarifies that intellectual property license fees may be freely remitted in RMB or foreign exchanges from or to China according to law. This provides legal protection for the payment and collection of intellectual property license fees.

Article 22 The State protects the intellectual property rights of foreign investors and foreign-invested enterprises and protects the legitimate rights and interests of intellectual property right holders and related right holders; the infringement of intellectual property rights shall be strictly investigated for legal liability according to law.

The State encourages technical cooperation in the process of foreign investment on the basis of voluntary principles and commercial rules. The conditions for technical cooperation shall be determined through equal consultation among investors in accordance with the principle of fairness. Administrative organs and their staff members shall not use administrative means to force the transfer of technology.

This amendment clarifies that foreign investment enjoys national treatment in intellectual property protection and technical cooperation after being admitted. Administrative organs and their staff members shall not use administrative means to force the transfer of technology.

Article 24. The technology supplying party to a technology import contract shall ensure that he or it is the legitimate owner of the technology supplied or one who has the right to assign or license the technology.

Where the receiving party to a technology import contract is accused of infringement by a third party for using the technology supplied by the supplying party under the contract, the former shall immediately notify the latter; the latter, upon receipt of the notification, shall assist the former in removing the impediment.

Where the receiving party to a technology import contract infringes another person's lawful rights and interests by using the technology supplied by the supplying party, the supplying party shall bear the liability therefore.

Article 24. The technology supplying party to a technology import contract shall ensure that he or it is the legitimate owner of the technology supplied or one who has the right to assign or license the technology.

Where the receiving party to a technology import contract is accused of infringement by a third party for using the technology supplied by the supplying party under the contract, the former shall immediately notify the latter; the latter, upon receipt of the notification, shall assist the former in removing the impediment.

Where the receiving party to a technology import contract infringes another person's lawful rights and interests by using the technology supplied by the supplying party, the supplying party shall bear the liability therefore.

The stipulation that the foreign party should bear infringement liability in technology import contract has been deleted. In the case of infringement caused by the use of technology, the liability of both parties may be determined by mutual agreement in accordance with the relevant provisions of the Contract Law.

Article 27. 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.

Article 27. 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.

In technology transfer in the presentence of such provision, in order to meet the interests of both parties, these parties may file an improvement of technology as a joint patent application to share such achievement; or the foreign party owns the patent and the Chinese party receives technology license. After this amendment, limit on sharing subsequent technology improvements by the foreign and domestic parties is removed.

Article 29. A technology import contract shall not contain any of the following restrictive clauses:

(1) requiring the receiving party to accept any additional condition unnecessary for the technology import, including buying any unnecessary technology, raw material, product, equipment or service;

(2) requiring the receiving party to pay exploitation fee for a technology when the term of validity of the patent right in which has expired or the patent right of which has been invalidated, or to undertake other relevant obligations;

(3) restricting the receiving party from improving the technology supplied by the supplying party, or restricting the receiving party from using the improved technology;

(4) restricting the receiving party from obtaining technology similar to that supplied by the supplying party from other sources or from obtaining a competing technology;

(5) unduly restricting the receiving party from purchasing raw material, parts and components, products or equipment from other channels or sources;

(6) unduly restricting the quantity, variety, or sales price of the products the receiving party produces; or

(7) unduly restricting the receiving party from utilizing the channel for exporting products manufactured using the imported technology.

Article 29. A technology import contract shall not contain any of the following restrictive clauses:

(1) requiring the receiving party to accept any additional condition unnecessary for the technology import, including buying any unnecessary technology, raw material, product, equipment or service;

(2) requiring the receiving party to pay exploitation fee for a technology when the term of validity of the patent right in which has expired or the patent right of which has been invalidated, or to undertake other relevant obligations;

(3) restricting the receiving party from improving the technology supplied by the supplying party, or restricting the receiving party from using the improved technology;

(4) restricting the receiving party from obtaining technology similar to that supplied by the supplying party from other sources or from obtaining a competing technology;

(5) unduly restricting the receiving party from purchasing raw material, parts and components, products or equipment from other channels or sources;

(6) unduly restricting the quantity, variety, or sales price of the products the receiving party produces; or

(7) unduly restricting the receiving party from utilizing the channel for exporting products manufactured using the imported technology.

This amendment deletes special restrictions on restrictive clauses in technology import contracts.

In business practice, technology licensors may impose certain restrictions on the transferee to protect their own interests.

After this provision is deleted, whether the restrictive clauses in the technology import contract are valid should be judged by considering the specific provisions in the Contract Law and the Anti-Monopoly Law.

Article 43. The technology transfer agreements concluded by a joint venture shall be examined and agreed to by the department in charge of the joint venture and then submitted for approval to the examining and approving authorities.

Technology transfer agreements shall comply with the following stipulations:

(1) Fees for the use of technology shall be fair and reasonable.

(2) Unless otherwise agreed upon by both parties, the technology exporting party shall not put any restrictions on the quantity, price or region of sale of the products that are to be exported by the technology importing party.

(3) The term for a technology transfer agreement is generally not longer than 10 years.

(4) After the expiration of a technology transfer agreement, the technology importing party shall have the right to continue to use the technology.

(5) Conditions for mutual exchange of information on the improvement of technology by both parties of the technology transfer agreement shall be reciprocal.

(6) The technology importing party shall have the right to buy the equipment, parts and raw materials needed from sources they deem suitable.

(7) No irrational restrictive clauses prohibited under Chinese law and regulations shall be included.

Article 43. The technology transfer agreements concluded by a joint venture shall be examined and agreed to by the department in charge of the joint venture and then submitted for approval to the examining and approving authorities.

Technology transfer agreements shall comply with the following stipulations:

(1) Fees for the use of technology shall be fair and reasonable.

(2) Unless otherwise agreed upon by both parties, the technology exporting party shall not put any restrictions on the quantity, price or region of sale of the products that are to be exported by the technology importing party.

(3) The term for a technology transfer agreement is generally not longer than 10 years.

(4) After the expiration of a technology transfer agreement, the technology importing party shall have the right to continue to use the technology.

(5) Conditions for mutual exchange of information on the improvement of technology by both parties of the technology transfer agreement shall be reciprocal.

(6) The technology importing party shall have the right to buy the equipment, parts and raw materials needed from sources they deem suitable.

(7) No irrational restrictive clauses prohibited under Chinese law and regulations shall be included.

This amendment deletes the time limit for technology transfer agreements and special protection provisions for the technology importing party.

The relevant content of the two items may be determined by agreement between the two parties in accordance with the relevant provisions of the Contract Law.