Article 41. If the transferee is in breach¹ of contract, it shall undertake liability as follows:

    (1) If it fails to pay the fee for use as stipulated³ by the contract, it shall make up the fee and, in addition, pay a penalty as agreed in the contract. If it fails to make up the fee or pay a penalty, it must cease to work the patent or to utilize⁴ the non-patented technology, return the technical data and pay a penalty or damages.

    (2) If it works a patent or utilizes⁵ non-patented technology beyond the scope stipulated in the contract, or if it, without the agreement of the transferor, grants licence to a third party to work the patent or utilize the non-patented technology, it shall cease the action which is in breach of contract and shall pay a penalty or damages.

    (3) If it is in breach of the contractual obligation of confidentiality⁶, it shall pay a penalty or damages.

    Article 42. If the violation⁷ of another person's legitimate⁸ rights or interests is caused by the transferee's working of a patent or utilization⁹ of non-patented technology, the transferor shall undertake liability.

    Article 43. The parties may, in accordance with the principle of mutual¹⁰ benefit, stipulate² in the contract a method of sharing ongoing¹¹ improvements to technical results following the working of a patent or the utilization of non-patented technology. If the contract contains no stipulation¹², no one party has the right to share the ongoing improvements to the technical results of another party.

    CHAPTER V

    Technical Consultancy Contracts And Technical Service Contracts

    Article 44. A technical consultancy contract refers to a contract concluded for the supply by one party to another party of feasibility evidence, technical calculations and the findings of specialist technical surveys and analysis and evaluation¹³ relating to specified¹⁴ technical project.

    Article 45. The primary obligations of commissioning party in a technical consultancy contract shall be:

    (1) To clearly state the problem for consultancy and to provide technical background material and relevant technical data and figures as stipulated by the contract;

    (2) To accept on time the results of the work of the advising party and to pay remuneration.

    The primary obligations of the advising party in a technical consultancy contract shall be:

    (1) To utilize its own technical knowledge to complete a consultancy report as stipulated by the contract or to answer the questions of the commissioning party;

    (2) To submit a consultancy report which meets the requirements stipulated in the contract.

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