8. Q: Is it necessary to have a patent license/pledge agreement recorded?

A patent pledge agreement will not come into effect until it is duly recorded with the State Intellectual Property Office. On the other hand, for a patent license agreement, according to  the Chinese Contract law and Patent Law, it will come into effect when it is duly executed by the licenser and licensee. Although, it is mentioned in the Implementing Regulations of the Patent Law that a patent license agreement should be recorded at the SIPO within three months from its effective date, the recordal is not mandatory. If parties decide not to record their agreement, there will be no punishment, and the validity of their agreement will not be affected. On the other hand, the recordal is not completely useless. In Chinese practice, the recordal may be required in foreign exchange, tax deduction, customs protection, etc., and may be considered by courts or local patent offices in determining damages in a patent infringement case.

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