With the continuous increase in scientific research investment and the steady improvement of research and innovation capabilities in China, technology has become one of the core driving forces for economic growth. The transformation of scientific and technological achievements "is the core standard for measuring the quality of scientific research output and social contribution value of universities and research institutes. It is also an important support for promoting the construction of the national scientific and technological innovation system and assisting in the deepening of the domestic substitution process in key industries such as semiconductors and biomedicine.

China has always attached great importance to the transformation of scientific and technological achievements at the national level. The 14th Five Year Plan for National Economic and Social Development of the People's Republic of China and the 2035 Long Range Objectives clearly propose "innovative mechanisms for the transformation of scientific and technological achievements" and "expanding the autonomy of scientific research institutions and higher education institutions in the disposal of intellectual property rights". At the same time, laws and regulations such as the Law of the People's Republic of China on Science and Technology Progress (hereinafter referred to as the "Law on Science and Technology Progress") and the Law of the People's Republic of China on Promoting the Transformation of Scientific and Technological Achievements (hereinafter referred to as the "Law on Promoting the Transformation of Scientific and Technological Achievements") have established a comprehensive guarantee system at the institutional level, promoting the deep integration of industry, academia and research and the industrialization of scientific and technological achievements transformation.

At the same time, we have noticed that in the context of the promotion of the development strategy of new quality productivity and the increasingly fierce international scientific and technological competition, the transformation of scientific and technological achievements faces multiple legal challenges both domestically and cross-border. Among them, the scenario of commissioned development projects transforming into technological achievements involves multiple parties and legal relationships, and the entire process from the generation of technological achievements, to the ownership of rights, and finally to the implementation of transformation must be included in the scope of legal compliance review. Therefore, relevant parties also need to clarify the core legal points. This article will focus on a systematic analysis of the core legal issues in this specific scenario, providing legal references for relevant participants such as investment institutions, science and technology innovation enterprises, and research subjects in this field.

1、 Definition of the core legal relationship between the transformation of scientific and technological achievements and commissioned development projects

01. Definition of Technology Achievement Transformation

According to Article 2 of the Law on Promoting the Transformation of Scientific and Technological Achievements, "scientific and technological achievements" refer to "achievements with practical value generated through scientific research and technological development", while "transformation of scientific and technological achievements" refers to "the subsequent experimentation, development, application, promotion of scientific and technological achievements to form new technologies, new processes, new materials, new products, develop new industries, and other activities aimed at improving productivity levels.

02. Common scenarios for the transformation of technological achievements

Article 16 of the Law on Promoting the Transformation of Scientific and Technological Achievements stipulates six ways of transforming scientific and technological achievements: 1) self investment to implement transformation; 2) Transfer scientific and technological achievements to others; 3) Allowing others to use technological achievements; 4) Using technological achievements as a cooperative condition and jointly implementing transformation with others; 5) Using the technology achievement as a valuation for investment, converting it into shares or contribution ratios; 6) Other methods determined through negotiation. In practice, taking universities as an example, the most common scenarios for the transformation of scientific and technological achievements include:

1. Universities invest their job-related technological achievements in entrepreneurial enterprises, and researchers usually receive partial equity rewards.

2. Universities transfer their job-related scientific and technological achievements to researchers or their entrepreneurial enterprises, and researchers who obtain ownership of the achievements use them for enterprise investment.

3. Universities license scientific and technological achievements to researchers for entrepreneurship, which is common in situations where intellectual property is jointly owned, and the enterprise obtains exclusive or exclusive use rights.

4. Research personnel start businesses and collaborate with universities for research and development. Universities are responsible for basic research, while enterprises are responsible for intermediate experiments and industrialization, forming new intellectual property rights.

03. Legal relationships in the process of entrusting development projects to transform scientific and technological achievements

From a legal perspective, the legal basis for the entrusted development relationship is the provisions on technology development contracts in the Contract Compilation of the Civil Code of the People's Republic of China (hereinafter referred to as the "Civil Code"). Article 851 of the Civil Code stipulates that "a technology development contract is a contract concluded between the parties for the research and development of new technologies, new products, new processes, new varieties or new materials and their systems. Technology development contracts include entrusted development contracts and cooperative development contracts".

According to the previous text, the core of the legal relationship in the process of technology transfer for commissioned development projects lies in how to connect the "commissioned development contract" with the "technology transfer". In this legal relationship, there are three core entities, namely: 1. the principal who entrusts the development (mostly enterprises or investment institutions), 2. the entrusted development party (universities, research institutes or research teams), and 3. the party who implements the transformation of achievements (which may be the principal/entrusted party/third-party cooperative entity). The rights and obligations of different parties need to be clarified separately based on the provisions of the commissioned development contract and the achievement transformation agreement, especially distinguishing between the "obligation to deliver the results in the development stage" and the "obligation to authorize the rights in the transformation stage" - the former is the core performance content of the commissioned development contract, while the latter is the prerequisite for the achievement transformation. The connection between the two can easily lead to legal disputes.

2、 Legal risks in the process of entrusting development projects to transform scientific and technological achievements

01. Legal disputes over ownership of scientific and technological achievements rights

The ownership of rights is the primary core issue in the transformation of scientific and technological achievements in commissioned development projects, and it is also the most prone to disputes.

Article 847 of the Civil Code stipulates that "if the right to use or transfer job-related technological achievements belongs to a legal person or an unincorporated organization, the legal person or unincorporated organization may enter into a technology contract for such job-related technological achievements." Article 848 stipulates that "the right to use or transfer non job-related technological achievements belongs to the individual who completes the technological achievements, and the individual who completes the technological achievements may enter into a technology contract for such non job-related technological achievements." Article 859 stipulates that "for inventions and creations completed through commissioned development, unless otherwise provided by law or agreed upon by the parties, the right to apply for a patent belongs to the research and development person. If the research and development person obtains a patent right, the principal may lawfully implement the patent.

In practice, common points of controversy include: firstly, the contract for commissioned development does not clearly distinguish between "ownership of the results" and "conversion and use rights", only vaguely stipulating that the results belong to the commissioning party, and does not specify the scope of permitted use during the conversion process; Secondly, when the entrusted party is a university or research institute, if the commissioned development results are recognized as job-related technological achievements (or referred to as "job-related technological achievements" according to the Law on Promoting the Transformation of Scientific and Technological Achievements), the ownership of the transformation rights should take into account the rights and interests of both the unit and the researchers. If the commission contract is not aligned with the internal achievement transformation rules of the unit, it may lead to conflicts between the contract provisions and the unit regulations; Thirdly, when multiple people cooperate to participate in commissioned development, the rights and shares of each participant are not clearly defined, which can lead to differences in the distribution of conversion benefits and the exercise of rights in the future.

02. Risk of Rights Defects in Achievement Transformation

There may be various defects in the rights of the commissioned development results during the transformation process, which directly affect the legality and feasibility of the transformation. On the one hand, there are "defects in the effectiveness of rights", such as the failure to complete patent authorization, copyright registration and other rights disclosure procedures for commissioned development results, or the potential risk of invalidation or revocation of authorized rights, resulting in the inability of the transformation implementation party to legally enjoy the transformation rights and interests; On the other hand, there are "defects in the burden of rights", such as the trustee unauthorized licensing of the results to third parties during the commissioned development process, or the results involving third-party prior intellectual property rights without obtaining third-party authorization and consent, which can easily lead to infringement disputes after transformation and implementation. In addition, if the commissioned development results involve financial support, their conversion must also comply with relevant regulations on the use of financial funds. Unauthorized conversion may result in restricted rights to the results.

03. Risk of design defects in conversion agreement terms

The design of the terms in the commissioned development achievement transformation agreement directly determines the smooth progress of the transformation. Common defects include: firstly, unclear agreement on the transformation method, which does not specify whether to adopt the "technology transfer", "exclusive license", "exclusive license" or "cooperative transformation" mode, resulting in blurred boundaries for the exercise of rights during the transformation process; Secondly, there is a lack or ambiguity in the terms of income distribution and expense allocation, such as the failure to agree on the calculation method and payment cycle for conversion income, the lack of clarity on the ownership of rights and income distribution for subsequent improvement results, and the failure to allocate the responsible parties for rights protection expenses and upgrade research and development expenses incurred during the conversion process; The third issue is that the provisions on breach of contract liability are too general, and the compensation standards and remedial measures for one party's breach of conversion obligations (such as the trustee's refusal to cooperate with the transfer of rights to the results, or the commissioning party's failure to pay conversion fees as agreed) are not clear, making it difficult to effectively pursue responsibility after disputes occur.

3、 Suggestions for practical response to commissioned development projects for the transformation of scientific and technological achievements

01. Clarify the ownership of rights when signing the contract

The relevant parties mentioned earlier should clarify the ownership and transferable rights of scientific and technological achievements during the commissioned development stage to avoid subsequent disputes. It is suggested to add a special "achievement transformation clause" in the commissioned development contract, which clearly stipulates: first, the ownership of the achievement and the subject of the obligation to register the rights; The second is the scope of granting conversion permissions, including conversion methods, geographical scope, duration, whether to allow sub licensing or sub licensing, etc; Thirdly, if it involves job-related technological achievements, it is necessary to clarify that the entrusted party should obtain internal conversion authorization from the unit to ensure consistency between the contract agreement and the unit's rules; Fourthly, for multi person collaborative development, it is necessary to clarify the rights and shares of each participant and the conversion decision-making mechanism. At the same time, the contract can stipulate the obligation to guarantee defects in rights, requiring the trustee to ensure that the results have no prior rights or encumbrances from third parties, and clarify the way in which the defect guarantee responsibility is assumed. For the cost part, it is recommended that companies clearly use the term "technology development fee" to avoid vague expressions such as "service fee" and "project cooperation fee".

02. Conduct due diligence on intellectual property rights

The implementation party of the transformation of scientific and technological achievements is recommended to entrust professional institutions to conduct intellectual property due diligence when necessary, comprehensively verify the rights status of the achievements, in order to verify the effectiveness of the rights, including the authorization status, payment status, and registration status of the copyright of the patents, and avoid the use of expired or soon to expire achievements; The second is to verify the authenticity of the ownership of rights, by reviewing the commissioned development contract, job achievement recognition documents, etc., to confirm the qualification of the transferor or licensor as the subject of rights; The third is to verify whether there is a risk of infringement, compare and analyze the technical solutions of the results with existing intellectual property rights, and avoid infringing on third-party rights during the transformation process; Fourthly, if it involves the transformation of cross-border technological achievements, it may be necessary to additionally verify the export control classification of the technology field to which the achievements belong, in order to handle relevant licensing procedures in advance and conduct research on the intellectual property protection situation of the target country.

03. Refine the design of conversion terms

As mentioned earlier, the clause design of the conversion agreement should combine both "operability" and "risk resistance" aspects, so the core clauses should at least include the following:

One is the conversion method clause, which clarifies the conversion mode and corresponding rights and obligations. For example, technology transfer requires agreement on the time and registration process of rights transfer, and license use requires agreement on license type, usage fee standards, and payment methods; The second is the income distribution clause, which clarifies the calculation base, proportion, and payment cycle of the converted income, and stipulates the ownership of rights and profit sharing rules for subsequent improvement results; The third is the obligation fulfillment clause, which clarifies the specific obligations of both parties in terms of deliverables, technical guidance, and subsequent maintenance; The fourth is the breach of contract liability clause, which sets clear compensation standards, penalty amounts, and remedial measures for different breach situations, such as defects in rights, refusal to fulfill conversion obligations, and overdue payment of fees; The fifth is the dispute resolution clause, which selects the appropriate dispute resolution method (litigation/arbitration) and jurisdiction based on the complexity of the conversion scenario.

IV. Conclusion

The process of entrusting development projects to transform scientific and technological achievements is a key link in the transformation of technological value into market value. In this process, relevant parties need to make agreements on the ownership of rights during the entrusted development stage, and pay attention to intellectual property due diligence and refined design of agreement terms during the transformation process. Only in this way can we effectively prevent legal risks, ensure the smooth progress of the transformation of scientific and technological achievements, achieve a win-win situation for the entrusting party, the entrusted party, and the implementation party, and provide solid legal protection for scientific and technological innovation and industrialization of achievements under the background of the development of new quality productivity.