Vivien Chan
Senior Partner, Vivien Chan & Co, Hong Kong
vivchan@vcclawservices.com

Anna Mae Koo
Partner, Vivien Chan & Co, Hong Kong
annamae.koo@vcclawservices.com

In this article, we are looking at a three-to-five-year period during which changes already underway will harden into the new normal for structuring, pricing and enforcing licences.

In Mainland China, a cluster of laws – the Personal Information Protection Law (PIPL), the Data Security Law (DSL) and implementing measures such as the Cyberspace Administration of China’s (CAC) 2024 Provisions on Promoting and Regulating the Cross-Border Flow of Data (the ‘2024 Provisions’)^[1] and the upcoming 2026 certification regime for outbound personal information (ie, ‘Measures for the Certification of the Outbound Transfer of Personal Information’) – alongside the Export Control Law and updated dual-use and rare-earth export rules, have transformed personal and industrial data and many technologies into tightly regulated assets. They define what can leave China, under what conditions and to which counterparties, shifting data and controlled technology from background compliance to the core of licensing.

Meanwhile, Asia is no longer a peripheral stage in global licensing disputes. The Supreme People’s Court has confirmed that Chinese courts may set global royalty rates for Standard-Essential Patents (SEPs) in appropriate cases, and has endorsed the use of anti-suit injunctions in SEP disputes, while European and UK courts are increasingly willing to determine worldwide Fair, Reasonable, And Non-Discriminatory (FRAND) licences. Overlaying this is a regional trend towards digital-asset and data-governance frameworks: Hong Kong’s regime for fiat-referenced stablecoin issuers under the Stablecoins Ordinance (effective 1 August 2025), Japan’s Ministry of Economy, Trade and Industry (METI) Manual on Cross-Border Industrial Data Management and the Regional Comprehensive Economic Partnership (RCEP) Agreement’s chapter on e-commerce together sketch an emerging infrastructure for digital trade.

Mainland China: why data and export controls now sit at the heart of licensing

China’s data and technology control regime matters because it directly shapes the feasibility and durability of cross-border licences involving China.

Data governance

The CAC’s 2024 Provisions recalibrate thresholds for mandatory security assessments and standard contracts, introduce exemptions for certain low-risk transfers and maintain a three-track system for outbound data flows. In tandem, the forthcoming certification regime for cross-border personal information transfers and national standards on processing personal data abroad – effective in 2026 – codify detailed expectations for contractual responsibility, security measures and oversight of overseas recipients.

For licensors and licensees, this means technology licences coming into or out of China are no longer simply about granting rights to patents, know-how or software; one must also be aware of the risks of data transfer, especially personal and/or sensitive data. A future-proof licence should:

• identify which datasets are personal and/or sensitive;
• specify the outbound transfer route; and
• allocate responsibility for obtaining and maintaining the necessary approvals or certifications.

Change-in-law provisions will need to do more than refer generically to ‘regulatory changes’; they should point to practical options – such as localising particular functions, segmenting user cohorts or reverting to anonymised data – and link these options to pricing and service levels. Without this structure, a commercially attractive licence may become impossible to perform if thresholds or certification standards tighten during its term.

Export control

China’s Export Control Law, together with updated control lists and implementation rules, increasingly determines which technologies may be licensed, to whom and under what conditions.^[2] Recent updates to the Export Control List of Dual-Use Items and new rules on specific rare-earth technologies (late 2025) have introduced ‘long-arm’ effects for overseas users of Chinese-origin inputs.^[3] Given the geopolitical uncertainties surrounding global trade, these export controls are likely to be updated from time to time.

Licences involving R&D collaboration, cloud-based software access or technology assistance from China may fall within the export-control regime – even without physical goods crossing borders. In addition, a technology freely licensable at the start of a ten-year agreement may later require export licences or face outright prohibition due to geopolitical shifts. Robust agreements should address:

• who bears the risk and cost of seeking export licences;
• how obligations adjust if approvals are refused; and
• whether rights automatically convert to local-only rights when controls tighten.

In short, the future of licensing in China will depend on integrating data governance and export control into deal architecture, rather than treating them as external constraints to be ‘managed later’.

SEP, FRAND and why Asian courts now shape global licensing economics

SEPs and FRAND undertakings have long underpinned licensing in telecoms, connected vehicles and industrial Internet of Things (IoT). What is new is Asia’s active role in setting global SEP licensing economics.

In its landmark 2021 decision in OPPO v Sharp ((2020) Zui Gao Fa Zhi Min Xia Zhong No 517),^[4] the Supreme People’s Court confirmed that Chinese courts have jurisdiction to determine global royalty rates and terms for SEP portfolios with sufficient nexus to China. The Court also endorsed the use of anti-suit injunctions in SEP disputes, signalling a willingness to restrain parallel foreign proceedings. This follows the example of British courts in setting worldwide royalty rates.

For licensors and implementers, a single FRAND action in an Asian court can reset the economics of a global licensing program. Implementers – handset makers, automotive original equipment manufacturers (OEMs), device manufacturers – now view Chinese courts as accessible venues for SEP disputes. Licensors with widely implemented portfolios must therefore assume FRAND questions may be litigated in Beijing or Guangzhou, not just Düsseldorf, London or Texas.

Future SEP licences will require explicit planning around jurisdiction and dispute resolution. Sophisticated agreements should:

• define royalty structures and grant-backs;
• state whether parties accept, resist or channel global rate-setting into arbitration or specific courts; and
• outline coordination strategies for parallel proceedings.

This is no longer an abstract litigation risk – it is central to commercial value for both licensors and licensees.

Issues illustrated by Hong Kong: AI, platforms, and programmable IP

Hong Kong is a useful case study of issues that are likely to arise across the region as legislatures grapple with artificial intelligence (AI) and digital assets.

Copyright and AI

In 2025, the Hong Kong Government outlined updates to the Copyright Ordinance (Cap 528) to promote AI technology development, including a text-and-data mining (TDM) exception and clarifications on the treatment of AI-generated works.^[5] Hong Kong has always allowed copyright for works that are solely computer-generated, which is divergent to the laws in China, the US and Europe. The new TDM exception will also allow for commercial and non-commercial developers to use copyrighted works to train AI models, if the works are lawfully accessed, sources credited and rights-holders have the ability to opt-out.

Practically, AI developers, hosting platforms and content owners structuring licences under Hong Kong law will increasingly need to address:

• which uses of content for training or analysis fall within statutory exceptions;
• whether or not to opt out of the exception, and how to change the access to certain data;
• whether to require and negotiate licences for data access; and
• how platform-level processes for infringement notices and repeat infringers are allocated between the parties.

These are emblematic of the issues that will arise in any jurisdiction that seeks to support AI development without eroding copyright protection.

Digital assets and smart contracts

Hong Kong’s virtual asset trading regime and Stablecoins Ordinance create a regulated environment for tokenising IP rights and embedding licensing logic into smart contracts.^[6] The Hong Kong Monetary Authority’s framework for fiat-referenced stablecoins emphasises licensing, reserve management, redemption mechanisms and risk controls.^[7]

For licensing lawyers, this opens possibilities such as:

• denominating royalties in HKD-referenced stablecoins;
• automating access to software or content via smart contracts tied to on-chain events; and
• tokenising revenue-sharing interests for co-developers or investors.

These developments illustrate how AI-related copyright reform, platform safe harbours and regulated Web3 infrastructure will converge to shape future licensing models.

Beyond Greater China: regional data and trade frameworks

The future of licensing in Asia will not be driven by national developments alone. Regional frameworks are beginning to influence expectations and practice.

Japan’s METI Manual

Released in January 2025, the METI Manual provides practical guidance for companies sharing industrial data internationally.^[8] It distinguishes different patterns of data localisation, domestic storage and cross-border transfer, and emphasises risk assessment and safeguards. For licensors and licensees engaged in complex industrial collaborations – such as automotive, electronics or advanced manufacturing – this framework offers a useful reference for allocating data-related responsibilities in licences.

Regional Comprehensive Economic Partnership (RCEP) Agreement

The RCEP Agreement is the world’s largest free trade agreement, covering 15 Asia-Pacific nations.^[9] At the treaty level, the RCEP Agreement, now gradually entering into force across the region, includes an e-commerce chapter that recognises the importance of cross-border data flows and electronic authentication, while preserving policy space for privacy and security regulation. Although RCEP does not harmonise IP or data-protection laws, it signals a shared direction towards digital trade facilitation among its members. For cross-border licensing programmes spanning multiple RCEP jurisdictions, ignoring these expectations around interoperability and electronic contracting will become increasingly difficult.

Taking together, these initiatives point to a licensing environment where Asian counterparties expect agreements to include coherent data-governance arrangements and operate seamlessly in a cross-border, digital-trade context – not merely to be drafted solely with one national law in mind.

Practical implications: how sophisticated parties will structure future licences

For dealmakers in Greater China and Asia, the challenge is how to translate these developments into contract architecture. Three themes are likely to distinguish sophisticated future-oriented licences from legacy templates.

1. Treat IP, data and compliance as one package

First, parties will need to treat IP, data and regulatory compliance as a single package. A licence granting rights in software and know-how but silent on personal data, industrial data, PIPL transfer mechanisms or export-controlled components is no longer fit for purpose. Instead, counterparties will have to collaborate early – at term-sheet stage – to map technology and data flows, identify portions subject to PIPL, DSL, export controls or state-secrets regimes, and price and allocate those risks explicitly.

2. Plan for disputes in Asia

Second, parties will need to assume that significant disputes may be litigated or arbitrated in Asia, and to plan accordingly. In SEP-heavy sectors, this means recognising that a Chinese court may set global FRAND terms, and deciding in advance whether and how to accommodate that possibility. In platform and AI-driven businesses, it means understanding how safe-harbour regimes and AI-related copyright exceptions in key jurisdictions will constrain or enable licensing structures. Dispute-resolution clauses that simply point to ‘the courts of X’ or to arbitration under a generic set of rules, without considering the interaction with FRAND or platform regulation, will leave parties exposed to jurisdictional surprises.

3. Use regional hubs strategically

Third, sophisticated parties will use regional hubs strategically. Hong Kong, Singapore and Tokyo are not interchangeable. Hong Kong’s proximity to the Greater Bay Area, common-law system, AI-focused copyright reform agenda and regulated virtual-asset and stablecoin regimes make it attractive for certain IP-, data- and token-intensive licences. Japan’s industrial data guidance may make it the natural reference point for manufacturing-centric collaborations. RCEP’s e-commerce chapter may make certain ASEAN jurisdictions more suitable for regional digital-services agreements.

Licensing is becoming an exercise in systems design, not just in drafting. Agreements that merely recycle familiar clauses without reflecting the new regulatory and technological landscape will be brittle. Licences that are built on a realistic understanding of data and export-control constraints, dispute-resolution dynamics and regional infrastructure will be far more resilient.

Conclusion

The future of licensing technologies and IP rights in Greater China and Asia will not hinge on any single statute, decision or technology. It will be defined by how these elements combine. Mainland China’s data and export-control regimes increasingly determine what may be licensed and on what conditions. Asian courts – particularly in SEP disputes – and regional legislators in AI and platform regulation now actively shape global norms of the game. Regional hubs and frameworks – Hong Kong’s AI and digital-asset initiatives, Japan’s industrial data manual and RCEP’s digital-trade architecture – provide the infrastructure within which cross-border licences must operate.

For clients and their advisers, the critical task over the next decade will be to internalise these developments into licensing strategy. Those who continue to treat data, export controls, FRAND litigation and Web3 as marginal, specialist issues will find their licences subject to the test of time. Those who approach licensing as the design of an integrated IP and regulatory architecture, tailored to Greater China and Asia, will be better positioned to manage risk and capture the upside of a region that remains, in every sense, a ‘vibrant’ land of opportunity for technology and innovation.