Software Licensing and Use Restrictions

By Jerry Yulin Zhang
[email protected]

Licensing transactions often involve PRC companies as users of certain high technology or other proprietary information or intellectual property rights. Many of these transactions are accomplished through a direct licensing arrangement between the owner of the technology or the owner of the intellectual property rights and the user. Some transactions involve a middle person as the licensee of the head agreement who will sub-licence the intellectual property rights to the user in China.

Here we will look at some issues in Chinese law in respect of the software licensing and use restriction in a license arrangement between a foreign licensor and a Chinese licensee. We assume that there is a head licence between two foreign companies that are governed by a foreign law, while the sub-licence agreement is governed under Chinese law.