New rules for deals with China highlight the need for licensing

On Behalf of | Jul 6, 2020 | Licensing Agreements |

International trade is at the heart of the technology industry, but changing tides is the constant price. Handling shifts in the landscape can be a demanding requirement for doing business on the world stage.

The equipment used for creating computer components earns more than $20 billion each year, and China plays an enormous role in that number. Licensing the use of your technology there can be lucrative, but profiting from global commerce requires navigating global politics.

Trading restrictions

The U.S. has very specific terms for doing business with other countries to maintain national security and foreign policy. While China is a major contributor to the technology market, U.S. officials recently redefined the rules for doing business there.

Redefining permissions

Changes going into effect will tighten restrictions. This could make proper licensing more important than ever:

  • Military: The Chinese military was previously able to get certain unlicensed technology for civilian use. U.S. officials now want a license for any military deals, regardless of the application.
  • Civilians: The U.S. also allowed some unlicensed technologies to pass directly to non-military organizations. The new restrictions will now require a license, even for private corporations.
  • Third parties: Foreign entities using your technology for goods going to China only needed permission from their government in the past. Now, the U.S. is adding its name to the approval process for companies licensing your intellectual property.

The political landscape is ever-changing, and your products could get caught up in the process. Make sure you are ready for regulation changes, and your business could weather any coming storms.

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