Technology Transfer Under the PRC Antitrust Framework

• Published in: Intellectual property & technology law journal 2008-11, Vol.20 (11), p.19
• Main Authors: Huang, John Z L, Ma, Patrick
• Format: Article
• Language: English
• Subjects: Antitrust; Compensation; Foreign investment; Intellectual property; Licenses; Monopolies; Monopolistic competition; OEM; Product development; Provisions; R&D; Raw materials; Research & development; Technology transfer
• ISSN: 1534-3618

According to the People's Republic of China (PRC) Ministry of Commerce (MOFCOM), 10,538 technology contracts were registered with MOFCOM with an aggregate value of US$22.02 billion in 2006, an increase of 15.6 percent from 2005. Fees received by foreign transferors of technology accounted for 67 percent of the total value i.e., US$14.76 billion). As the value of technology contracts has increased, so has the wariness of the government of the PRC of foreign participation in many key sectors and its perceived potential to create technology monopolies in China held by foreign interests. John Z.L. Huang and Patrick Ma explain that, for example, it is common practice for a foreign transferor to try to place substantial restrictions on the use of the subject technology in technology agreements. Under this scenario, relevant PRC laws try to balance the benefits of having a free flow of technology against the risk that it will distort competition. The authors suggest that, as a result, foreign investors must pay more attention to competition and antitrust concerns in their Chinese technology transfer deals. [PUBLICATION ABSTRACT]