This article was prepared by Hefei Zhihai Yida Patent Agent Firm (agency code 34408) based on publicly available court decisions and information published by the Intellectual Property Court of the Supreme People’s Court. It is for reference only and does not constitute legal advice.
The Most Common Misconception
“I developed this technology with my own hands, so the patent I file after leaving my job is naturally mine.”
In patent agency practice, this is the most costly misconception we hear. The reality is: if you make an invention “related to” your former job duties or assigned tasks within one year after leaving your employer, it is a service invention owned by that employer — the right to apply for the patent and the patent itself belong to the former employer, regardless of in whose name you file, who pays the fees, or who organizes the R&D.
Ignoring this rule may at best cost you the patent; at worst — as WM Motor learned — a single lawsuit can bring a judgment of RMB 640 million.
I. A One-Year Quarantine Period Under the Law
Article 6(1) of China’s Patent Law provides that an invention made in the course of performing the entity’s tasks, or made primarily using the entity’s material and technical resources, is a service invention, and the right to apply for a patent belongs to the entity.
What counts as “performing the entity’s tasks”? The Implementing Regulations of the Patent Law (revised 2023, effective January 20, 2024; formerly Article 12, now Article 13) list three situations, of which the third is the most easily overlooked:
(3) An invention made within one year after retirement or transfer away from the original entity, or after termination of the labor or personnel relationship, which is related to the inventor’s own duties at the original entity or tasks assigned by that entity.
In other words, the law imposes a one-year quarantine period on R&D personnel mobility. The rationale is simple: invention is continuous intellectual work, and the tasks you undertook at the former employer may well “bear fruit” only after you join the new one. Without this time cut-off, any R&D employee could legally walk away with the employer’s R&D results by simply changing jobs, leaving the employer’s innovation investment unprotected.
Two key points:
- The one-year period runs from termination of the labor or personnel relationship — not from receipt of the separation certificate, completion of handover, or the first day at the new job;
- The presence or absence of a non-compete agreement does not affect the application of this rule — it is statutory and does not depend on any contract.
II. How Do Courts Decide “Related”? The Four Factors Set by the Supreme People’s Court
How is “related” assessed? In case No. (2019) Zui Gao Fa Zhi Min Zhong No. 799 (Edan Instruments v. Wondfo Biotech et al., patent application right ownership dispute, decided November 23, 2020), the Supreme People’s Court laid out a complete framework. There, two R&D employees left Edan and, within one year, filed an invention patent for a “blood gas analyzer and blood gas biochemistry test card” in the name of their new employer, Wondfo. The Court held that a service invention made within one year after resignation must satisfy all four of the following conditions:
- The inventor was formerly an employee of the entity asserting rights;
- That employee made a creative contribution to the substantive features of the invention (i.e., is a true inventor);
- The invention was made within one year after leaving the entity;
- The invention is related to the employee’s own duties or assigned tasks at the former entity.
Once all four are met, the patent application right belongs to the former employer — even if the invention is also related to the employee’s duties at the new employer, the new employer cannot “automatically” acquire the rights.
In the Weibang Technology v. Li Jianyi & Yuanzhi Intelligent Equipment case, published in the Gazette of the Supreme People’s Court, the Court further set out four comprehensive factors for judging “relatedness”:
- The departing employee’s job duties, authority, and the technical information relating to the patent that the employee could access, control, or obtain at the former entity;
- The technical field, the technical problem solved, the purpose and technical effect of the invention, and the scope of the claims, and their relationship to the employee’s former duties;
- Whether the former entity actually carried out R&D activities related to the patent;
- Whether the right holder and inventors can give a reasonable explanation of the R&D process or the source of the technology — the more complex the technical solution and the greater the R&D investment required, the less plausible an “independent development” explanation becomes over a short period.
The Court also emphasized that “related inventions” should not be interpreted too broadly, and that the interests of all three parties — the former employer, the departing employee, and the new employer — must be balanced: the knowledge, experience, and skills an R&D employee accumulates in the course of work may be taken along, but the former employer’s specific technical information may not. This boundary is precisely where most disputes arise.
III. Losing the Patent Is Only the Beginning: Three Routes of Liability
Many R&D employees assume the worst outcome is “the patent goes back to the former employer.” In reality, the ownership dispute is often only the first domino.
Route 1: Patent application right / patent right ownership dispute. The former employer sues to establish ownership, and once the judgment takes effect, the patent is transferred as a whole. In a rail-transit case decided by the Chengdu Intermediate People’s Court, a technical expert named Qian invested in and founded a technology company and served as its legal representative while still employed by an original machinery company. Within one year after resigning in January 2019, that company filed five rail-transit patents; the court of final instance ruled that the patent application rights to four of them belonged to the former employer.
Route 2: Implementation is infringement, with punitive damages of up to five times. If, after the patent is confirmed to belong to the former employer, you or your new employer continue to practice the technology, that constitutes patent infringement. Under Article 71 of the Patent Law, willful infringement in serious circumstances is subject to punitive damages of one to five times the base amount (losses, profits, or a multiple of the license fee); where the base amount cannot be determined, statutory damages of up to RMB 5 million apply.
Route 3: Trade secrets and even criminal liability. Technical drawings, source code, and process parameters taken away at departure often constitute trade secrets at the same time. The Anti-Unfair Competition Law likewise provides five-fold punitive damages; in serious cases, Article 219 of the Criminal Law (infringement of trade secrets) may apply, with imprisonment of up to ten years.
This is not theoretical. Consider two real judgments:
Geely v. WM Motor: from “12 utility models” to a RMB 640 million judgment. In June 2024, the Intellectual Property Court of the Supreme People’s Court rendered its final judgment in this largest-ever trade secret case in the new energy vehicle sector: nearly 40 executives and technical staff under Geely left to join WM Motor’s side, and in 2018, the WM side, using chassis drawings and digital model technical information those employees had accessed at their former employer, filed 12 utility model patents naming some of them as inventors or co-inventors. The Supreme People’s Court found this to be an organized, premeditated large-scale poaching of technical talent and technical resources by improper means, applied double (2x) punitive damages, and ordered the WM side to pay economic losses of RMB 637,596,249.6 plus RMB 5 million in reasonable enforcement expenses — a combined total of approximately RMB 640 million, a record for IP infringement litigation in China. The judgment also pioneered the cost of non-compliance: violating the obligation to cease use incurs late-performance damages of RMB 1 million per day; unauthorized disposal of any one of the 12 patents requires a one-time payment of RMB 1 million per patent.
The Guangzhou Lin case: filing a patent within one year — even abandoning it doesn’t help. Lin worked on trumpet-type product development at Donghe Company. Within one year after leaving and joining competitor Leyi, a utility model patent for “a composite-material trumpet” was filed in Leyi’s name. The court found the patent strongly related to his former duties and assigned tasks, and ruled it belonged to the former employer. What is more notable is what followed: during ownership negotiations, Lin and his new employer unilaterally declared abandonment of the patent right, attempting to nullify the judgment. The Guangzhou Intellectual Property Court found this to be a bad-faith abandonment of the patent right, and Lin was still ordered to compensate the former employer’s reasonable enforcement expenses — the patent can be abandoned, but the liability cannot.
IV. For R&D Personnel: A Departure Checklist
Based on the judicial rules above, if you are an R&D employee, check the following before and after changing jobs:
- The “three don’t-takes” at departure: don’t take drawings, data, source code, or customer information; don’t copy work files to personal email, USB drives, or cloud drives (in a case published by the Tianjin Third Intermediate People’s Court, an employee sent trade secret files to a personal email during his resignation period, and was held jointly liable with the recipient company for RMB 700,000);
- Hold off on “borderline” patent filings for one year: within one year after leaving, do not hastily file patents — in your own or your new employer’s name — for technical solutions related to your former position or projects. “Relatedness” is determined by the courts under the four factors, not by your self-assessment;
- Distinguish “skill accumulation” from “technical information”: general knowledge, experience, and skills may be taken and used in the new role; the former employer’s specific technical solutions, unpublished data, drawings, and digital models may not be taken, let alone used for patent filings;
- Being named as inventor ≠ ownership: your new employer listing you as an inventor does not make the patent yours — quite the opposite, it can be the direct lead for the former employer’s lawsuit (the Geely case built its evidence chain precisely through the inventor lists);
- When in doubt, get a risk assessment first: for career moves involving core technologies, have a patent attorney professionally evaluate “one-year window, technical relatedness, evidence chain” before deciding — the cost is far lower than defending a lawsuit.
V. For Employers: Defend Early, Too
- Document the departure process: sign confidentiality and IP ownership confirmation forms, reclaim system accounts, and clearly inform departing employees of the legal consequences of service inventions made within one year after departure;
- Monitor former employees’ patent activity: periodically search for new filings naming departed core R&D staff as inventors; if filings related to their former roles appear, assert rights before grant (ownership disputes over patent application rights should be brought sooner rather than later);
- Hiring carries risk too: when hiring employees away from competitors, review patent applications they have filed within one year, to avoid becoming a co-defendant;
- Fix your evidence: project documentation, lab records, and drawing version control must be kept well in advance to be usable when needed.
Conclusion
The one-year quarantine period essentially draws a line between an R&D employee’s freedom to choose employment and the former employer’s innovation investment. Filing within the line, at best the patent changes hands; at worst — as the WM Motor case shows — a list of 12 utility model filings can evolve into a RMB 640 million judgment plus RMB 1 million per day in late-performance damages.
Technology can be taken along: knowledge and experience belonging to the “person” always stay with the person. But results belonging to the “employer” — within one year, the law will hold the line for them.
Frequently Asked Questions (FAQ)
Q: Once one year has passed, can I freely file patents?
A: Not necessarily. The one-year quarantine period only resolves the ownership layer of service inventions. Even beyond one year, if the technical solution derives from the former employer’s non-public drawings, data, or processes (constituting trade secrets), using them to file or implement a patent may still constitute trade secret misappropriation, with the same exposure to five-fold punitive damages and even criminal liability. Conversely, relying only on knowledge, experience, and skills accumulated at work to make an invention unrelated to former duties and assigned tasks is not restricted by law — the Weibang judgment drew exactly this “skills can be taken, information cannot” boundary.
Q: From what day does the one-year period run?
A: From the date of termination of the labor or personnel relationship — not from receipt of the separation certificate, completion of handover, or the start of the new job. In practice, courts generally presume that an invention was “made” within one year based on the patent filing date, but parties may rebut this with project records, experimental data, and R&D process evidence showing the actual completion date — which is why keeping R&D process records matters so much.
Q: If I never signed a non-compete agreement, can the former employer still assert rights?
A: Yes. The one-year service invention rule is statutory and does not depend on the existence of a non-compete or confidentiality agreement. A non-compete restricts “where you may work”; this rule determines “who owns the patent” — two independent regimes. Even if the former employer signed nothing, Article 13(3) applies all the same.
Q: The patent is in the new employer’s name — who bears the risk?
A: A judgment of ownership for the former employer is only the first step. If the new employer continues to practice the technology, it — as patentee and implementer — will be the main defendant in an infringement suit; the departing employee personally may bear joint and several liability for disclosing trade secrets or participating in joint infringement. In Geely v. WM, the defendants included four WM-side companies, and the court ordered relevant employees and suppliers to cooperate in destroying and handing over technical materials; in the Ruichang case, the Supreme People’s Court’s final judgment held certain departing individuals jointly liable for over RMB 3 million.
Q: The former employer never paid me service invention rewards — can I use that against its ownership claim?
A: No. Ownership and remuneration of service inventions are two independent legal relationships. If the employer failed to pay statutory rewards (Article 15 of the Patent Law), you may claim them separately, but in principle this does not affect the attribution of the patent application right and patent right to the entity. Arguing “you didn’t pay me” against “return the patent” does not work in court.
Q: How can I legitimately bring technology to a new employer?
A: Three legitimate routes: first, advance agreement — for inventions made primarily using the entity’s material and technical resources, the entity and inventor may agree on ownership by contract (Article 6(3) of the Patent Law); second, obtain authorization — secure a license or assignment of the relevant technology from the former employer; third, clean re-development — create a brand-new technical solution unrelated to former duties and assigned tasks, keeping complete R&D records to prove its origin. There is no fourth route called “file first and deal with it later.”
Q: I’m an employer, and I found that a former employee filed related patents in a new company’s name within one year of leaving. What should I do?
A: Act sooner rather than later. Before grant, you may file a patent application right ownership dispute; after grant, you may assert patent right ownership. At the same time, preserve evidence: the former employee’s project history, records of access permissions to technical information, and a comparison analysis between the patents at issue and the former employer’s R&D. If there are signs that drawings or data were taken, evaluate the trade secret route in parallel — the WM case is the classic example of combining “ownership leads + trade secret claims,” ultimately obtaining not just 12 patents but RMB 640 million in damages.