According to the Patent Law of People's Republic of China (PRC) (revised in 2008)
Article 57 A unit or individual that has obtained a compulsory license for exploitation shall pay a reasonable royalty to the patentee, or handle it in accordance with the provisions of relevant international treaties to which People's Republic of China (PRC) is a party. If the user fee is paid, the amount shall be negotiated by both parties; If both parties fail to reach an agreement, it shall be decided by the patent administration department of the State Council.
Article 58 If the patentee refuses to accept the decision of the patent administrative department of the State Council on compulsory license, and if the patentee and the unit or individual that obtained the compulsory license refuse to accept the decision of the patent administrative department of the State Council on compulsory license fee, they may bring a lawsuit to the people's court within three months from the date of receiving the notice.
Second, the payment method of patent royalties
According to the provisions of Article 325 of the Contract Law, the payment method of the use fee shall be agreed by the parties, which may be lump-sum payment or lump-sum payment, royalty payment or additional prepayment of the entry fee. If it is agreed to pay the royalties, the royalties may be calculated according to the product price, the newly added output value after the patent is implemented, the profit or a certain proportion of the product sales or other agreed ways. The proportion of royalty payment can be fixed, increasing year by year or decreasing year by year. Where royalty payment is agreed, the parties shall stipulate in the contract the method of consulting relevant accounting accounts.
Finally, the two methods have their own advantages and disadvantages. Finally, the patentee gets the money early and the risk is small, but it may need to pay more taxes. If the products sell well in the future, the patentee will not get additional benefits. Of course, if the products can't reach the expected sales volume in the future, this method will bring risks to the licensee. If the royalties are paid by installments, the risk borne by the licensee is relatively small, but if the sales of products in the future are very good, the patentee can get higher royalties. In many cases, royalties are paid by combining entry fees with royalties.