China’s
rules and practices in relation to technology transfer have been of
long-standing concern to its trading partners. These concerns are most strongly
evident in the United States Trade Representative’s section 301 Report which foreshadowed the imposition of substantial
increased tariffs
on Chinese goods; a move which was quickly mirrored by China. This article
subjects some of these concerns to legal scrutiny. Particular attention is given
to China’s
treatment of grantback clauses in technology transfer contracts which speak to
the ownership of improvements made to \licensed technology. China’s
outgoing and recently revised rules are evaluated under two questions. The first
is whether China’s rules are discriminatory contrary to the Trade-Related Aspects of
Intellectual Property Rights (TRIPS) national treatment obligation. The second
is the extent to which states are free under the TRIPS to interfere with
freedom of contract in technology transfer. The article identifies
a shift as between the two questions from high consensus, to low consensus norms.
While the prohibition on discrimination must be strictly interpreted and
applied, other TRIPS provisions which touch upon the control of
anti-competitive practices in technology licensing, do not remotely reflect
a stable international consensus. Interpretations of these provisions should
therefore seek to accommodate different approaches, rather than presume that they reflect
and prioritize one approach to the exclusion of others.