United States: The Top Five IP And Tech Issues For Cross-Border Transactions

Last Updated: January 17 2019
Article by John Cao

Several questions and topics come up time and again during overseas visits with Chinese entities, both law firms and corporations. This article summarizes these hot topics that are of interest to overseas entities in the areas of intellectual property and technology transactions.

1. Ideas to Avoid Getting Caught in the US-China Disputes

Trade issues are a hot topic for Chinese entities. It appears that Chinese law firms and corporations are hesitant to invest in US subsidiaries because foreign investments in US entities are currently under scrutiny. For example, goods entering the US from factories in China are subject to a hike in tariff taxes. One solution to avoid the US-China disputes involves moving some of the factories within China to countries outside of China, e.g., Vietnam and Singapore. This solution could impact factories for electronics, manufacturing, and assembly, whereby goods entering the US from non-Chinese factories would be subject to low or no tariff taxes. Another idea to avoid tariffs is to reduce the size or limit the growth of US subsidiaries.

2. Export Control for Patents

Although US-China tensions currently exist in the areas of trade tariffs, it appears overseas entities, especially entities within China, remain highly interested in investing and dealing with US businesses. Large Chinese tech companies raise questions related to export control, and specifically whether inventions designed in the US, implemented in another country such as in Europe, and adopted in China were subject to export control. One obvious category subject to export control is military applications. However, inventions where civilian applications predominate are more difficult to assess. The safe assumption is that when a portion of the invention is conceived in the US, the invention is subject to export control.

3. Differentiations of Co-Ownership of Patents in Various Countries

Another question Chinese firms and companies raise is how two or more entities that jointly own patent rights can enforce their rights (e.g., sue) in the US versus other countries and how various countries differ. Here, for example, there is a distinction between the US and UK patent systems. The US patent system applies the rules that joint patent owners can assert 100% of their patent rights individually. The implication is that any one of the co-owners of the patent can freely enter into a contract with a third party without the other co-owner's consent, or sue an infringer without the other co-owner's consent. Procedurally, however, the US court will enjoin the other co-owners to avoid subsequent litigations by the other co-owners. This procedural hurdle effectively avoids multiple litigants litigating separate cases for the same patent and accused product or process. The same implication is observed in UK, where only one party's consent is required to sue an infringer but the UK court requires all owners of the patent to join in the case to avoid subsequent litigation for the same patent and accused product or process.

4. Potential Patent Ownership Issues for Graduate Students

Another issue related to patent ownership involves various employer-employee arrangements. Typically, an employer requires an employee to sign a non-disclosure agreement and a waiver of ownership to transfer any patent rights to the employer for any inventions the employee conceived while under the employ of the employer. However, there are specific scenarios where it is difficult to determine whether an employee, especially a grad student, conceived the invention during his/her employment. One example occurs when a grad student conceives an invention that includes concepts or ideas that arise from the research of the grad student and/or his/her professor. In this case, the inventive concepts may or may not be an idea of the grad student. The professor/university employer should advise the grad student employee of the agreement governing the relationship and ownership of the inventions arising from such research.

5. Cross-Border Litigation Strategies

Litigation strategies employed by Chinese entities with a US presence, e.g., US subsidiaries, is another topic of interest in China. For example, when a US constituent of an overseas entity is sued for patent infringement in a US court, the overseas entity can initiate a concurrent patent case in a foreign court, such as a Chinese court. It is typically cheaper and faster to litigate in the foreign court than in the US. The effect is that the US court case can be stayed subject to a decision from the foreign (e.g., Chinese) court. Once a decision is handed down in the foreign (e.g., Chinese) court, the US court case might be ripe for settlement in view of the foreign court decision, even in cases where the foreign court case is not representative of the US court case.

Furthermore, some foreign courts, such as the Chinese courts, do not allow arbitration of patent infringement cases as a matter of law. This leads some companies to arbitrate in the US and UK rather than bring the case in a Chinese court. Nevertheless, foreign entities are well advised that initiation of overseas court cases is one strategy that may be adopted.

Previously published by IPWatchdog

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions