A Substantial Progress in Regulating Software Industry in China
来源:知识产权学术与实务研究网 作者: 时间:2006-08-20 阅读数:1353
MA Zhongfa
(
CHEN Qian
( Policy and Regulation Department of
原载《<复旦人文社会科学论丛>第3辑》(英文)
Abstract: According to market demands and requirements of legal practice, Shanghai Information Committee and Shanghai Industrial and Commercial Administrative Bureau jointly issued Shanghai Computer Software Development Model Contract (2003) for the enterprises in October, 2003, which will make great progress in regularizing the development of software market. In the model contract, project management, monitoring, testing, trying on, and check and acceptance and intermediation made by Information Association when there are disputes are recommended, which show the characteristics of the model contract. The significance of popularizing the model consists in regularization of software market, promoting transformation of the government functions and driving the guild to play its role in self-discipline. However, the model is only a model. Two or more parties to the contract shall negotiate the terms on the basis of the principle of the autonomy of will for respective rights and obligations.
Key words: model contract, software development, regulation, autonomy of will
1. Introduction
In order to implement the thought of scientific development,
informationization is an inevitable choice for
Enterprises engaging in software development are playing an increasingly important role in society in our times. With the growing number of such enterprises in recent years, their significance has unfolded in the economic and commercial activities. Take
In the first place, in are very serious, and thus, there exists an urgent demand for regulating software-developing contract.
Therefore, the relevant governmental agencies in
2.Typical Features in
This model contract was drafted jointly by Shanghai Information Committee, as the leader, Shanghai Information Association, Shanghai Software Association and the relevant governmental agencies of
There are about 10,000 words, 16 articles in all, including those of definition, software development, price, intellectual property, damages on breach and so on, as well as appendix and supplements. This model contract is more accurate and elaborate than the precedents, whose features are demonstrated as follows.
2.1 The Article on Software Development
There are 8 clauses under this article. Stipulations as “project management” and “monitoring by a third party” have been adopted in the contract, which may be one of the most distinguished natures of the model. An information system development management group shall be appointed to manage the software development under delegation of either party to the contract. Either party shall notify in writing the other party when naming (an) other person(s) taking place of the original one as his own management group member(s). When such a change involves major matters of the project, the party undertaking the change shall ask in advance for the written consent from the other party. And the other party shall promptly examine the written notice and reply promptly. Both parties shall negotiate such a change on the grounds of rationality, good faith and mutual benefits.
The clause of monitoring in this article stipulates that one party (entrustor, or Party A) can engage a third party as a monitor of the software development on his behalf, who is entitled to the same authority as that of Party A. The third party shall have the corresponding competence or qualification and perform his duty in accordance with laws, otherwise the other party (entrustee,Party B) has the right to reject the monitoring conducts. Such an article enables both parties to avoid potential disputes.
Other clauses under this article are quite accurate and clear for application. For example, clause 6 on “requirement instruction, general design instruction and detailed design instruction” and clause 7 on “the report of achievement on schedule”[3] are both directed against problems leading to disputes and for the contractors’ attention.
2.2 The Article on Delivery, Check and Acceptance
This article stipulates the rights and obligations in testing, trying-on and acceptance, which brings about actually precise expectations for both parties in performing the contract. The model contract stipulates that entrustor shall promptly do the test and show the results after the delivery and shall ask entrustee to do the modification when the technical requirements or criteria have not been reached or met, provided that the software is developed in the way of commission. If the test has been passed, there shall be several days’ trying-on, and thereafter the whole system test shall be performed.[4] Such accurate stipulation is conducive for the performance of the contract and prevents either party from shirking his responsibilities.
As far as the entrusting software development contract is concerned, in general, the entrustee has more apparent initiatives and more accurate obligations, which makes him at a disadvantage, while the entrustor’s obligations, such as payment, acceptance and other assistance, which are actually too vague and general, make him take the advantageous position. But this model contract provides some effective insights solving such problems.
2.3 The Article on Warranty and Exemptions
This article rules that Party B (the entrustee ) shall warrant that the software or its affiliated rights will not infringe any third party’s intellectual property or other rights, and there are no suspending litigations against Party B’s right of the software, and the right of Party A (entrustor) to use the software delivered from Party B will not infringe any third party’s rights. And the software developed shall accord with s, otherwise there is possibility of endless disputes.
2.4 The Article on Dispute Resolution
Another most significant feature of this contract model lies in the stipulation of the intermediation made by Information Association, which is the guild of software industry, when disputes arise out of the contract or performing the contract. It is stipulated that when both parties cannot solve the dispute themselves, they can apply to Shanghai Information Association for the intermediation under its rules.[7] Though such non-governmental intermediation from a trade association is very common in other countries, it is quite rare in
Actually solving a dispute by the intermediation by a trade association is a more economical solution and may be more helpful for the future cooperation of both parties to the contract than by arbitration or by litigation. There is evident enlightening profundity in such article. As good offices and mediation are the productive solutions of controversies among the countries, intermediation may be a more effective approach to solve personal disputes, especially in certain trades with particularly unique characters. The recommendation of this article is a milestone in a society of informationization. Obviously, though the rule of intermediation is vital on ordinary occasions, the failure of intermediation will not deter either party resorting to arbitration or litigation, for it has no legal binding force at all.
2.5 The Article on Credit
This article stipulates that either party to the contract can demand a credit report from the other and if the disputes in performing the contract are solved through litigation, either party can submit the effective judgment to Shanghai Credit Agency.[8] Such stipulation is positive for the establishment and improvement of a society in which everybody abides by the principle of good in faith. Operated with the Rule of Shanghai Personal Credit Management enacted on Feb.1, 2004, this article will strengthen the importance of performing one’s duty correctly and faithfully, for the flaws with credit will be adverse to one’s own benefit. Such a stipulation in model contract conforms to the requirement of credit in an informationization society and the economic development.
Moreover, other articles on project change, confidentiality, intellectual property, comprehensive provision, price and payment are all feasible in tackling practical problems.
Last but not least, this contract model refers to some practices in the countries with a mature and advanced market[i] and considers the specific circumstances of
3. The Significance of
This contract is drafted in the movement of the market demands. It is jointly promulgated by Shanghai Information Committee and Shanghai Industrial and Commercial Administrative Bureau, however, it is promoted by Shanghai Software Association and Information Association, which indicates an implicit government conduct in the whole course. Nevertheless, such a conduct does not mean the action of “intervention,management or control” but that of “guide and service”. Therefore the significance of the model contract may be mentioned as follows.
3.1 To Regulate
Software is one of the industries developed most rapidly in
3.2 To Present An Important Signal of the Shift of Government’s Functions[ii]
It is pointed out that the government’s functions of economic regulation, market supervision, social administration and public service should be further developed and consummated in the report of the 16th NCCPC.[10] The acts of drafting and promoting the model contract reflect the great progress of municipal administration of
3.3 To Provide A Positive Exploration into the Functions of Trade Association after
Trade association has played a role in countries with developed market. While in
4.Points for Attention in Applying
Since this model contract only provides a reference, parties to the contract can decide whether or not and how much to apply it. Several articles in the model contract can be regarded as reminders. It is not a standard contract and accordingly two or more parties to the contract shall abide by the rule of autonomy of will when they try to sign a contract.
The relative accuracy of the model contract enables a layperson to apply it without much trouble except for several professional and legal terms. However, listing the most important terms in a contract, the model is far from the consummation in that some provisions can be improved by supplementary clauses owing to some legal problems still existing. Take the article of dispute resolution for example, which stipulates that when there are disputes, either party can apply for intermediation to Shanghai Information Association under its rule of intermediation or apply for arbitration to Shanghai Arbitration Committee under its rule of arbitration. However, such two methods should not be counterparts for free choice. Though both are solved by nongovernmental organizations, the intermediation made by the former has no legally binding effect, and in case of the failure to reach a consensus, either party can apply for arbitration or lodge a complaint in the court. In sharp contrast, according to law, in
Secondly, articles on liability of breach of contract and damages stipulate that for delay of per 10 or X days, the party who breaches the contract shall pay the other party who performs his obligations certain percentage of the total worth of the contract, while the whole damages shall not exceed 5% of the whole contract price.[15] In fact, there lies another problem, for there is no accurate stipulation directed against the party whose accumulative damages exceed 5% of the worth. In such a condition, the non-breaching party tends to rescind the contract and claim fair damages. However, the model contract has not provided accurate stipulation, which is a common phenomenon in the reality. For example, both parties agreed that the entrustor shall pay a damage of 0.5% of total amount delayed per day from the next day after the agreed payment date, while the whole damages may exceed 5% of the total amount when the tenth day comes. However, because there is none of other liabilities that are drawn into the contract, how to require the breaching party to bear the actually additional damages from the eleventh day? As a result, the entrustor took an unfair advantage of this flaw that he consciously delayed the payment for 2 months since the ceiling damages were fixed, never exceeding 5%. If there were more accurate provisions on further damages such as raising daily damages or rescinding the contract and claim of liability for material breach, the entrustor would take it more seriously.
And thirdly, the articles on intellectual property and rights of exploitation are the cores of software development contract. This model contract displays several conditions for choice. However unclear application of the right may appear without analyzing the given conditions. For example, it is stipulated that Party A and Party B jointly possess the intellectual property of the developed software, either party may not disclose, assign or license to any third party the relevant technology, software, unique technique, confidential information and technology documents without the other party’s consent and except for the developing itself, either party may not exploit the aforesaid documents and technology commercially without the other party’s written consent. When breaching the agreement, the party in breach shall cease or suspend the injury and pay the damages.[16] However, actually the aforesaid stipulation can only be applied in joint-possession, while when only one party possesses the intellectual property, the right-holder can dispose his rights at his discretion, and such stipulation seems unnecessary and inappropriate hereon.
Accordingly, in order to avoid disputes on equivocation, both parties should negotiate on every terms, especially those key terms when applying the model contract.
5.Conclusion
According to the following statistics of
As a major industry in information society, in future, software industry will be attached more importance to and gain more support and assistance. Accordingly, the relevant laws and regulations shall keep pace with this trend. It is quite reasonable that the model contract is drafted initially in
Notes
[i] For example, Article “Definition” includes the meaning “milestone” which originates from English indicating the key step in development.
[ii] Such model contract ,which has no binding force, is different from administrative laws and regulations as the Rule of Evaluation and Management of Software Enterprises or the Rule of Software Management, for the government just acted as an organizer and provided service for making the model.
[iii] In 2004, the revenue of global software trade was $886.2 billion and will reach about $950 billion. See The Software Export Enterprises Shall Make Efforts to Enhance Core Competitiveness and Cultivate Self-sustaining Brands, a speech made by Mr. Wei Jianguo,
http://kjs.mofcom.gov.cn/aarticle/ztxx/bb/bf/200506/20050600134519.html.
[1] Build a Well-off Society in an All-round Way, Create a New Situation in Building Socialism with Chinese Characteristics----the Report on the 16th NCCPC, in 16th NCCPC Documents Collection, (Beijing: People’s Publishing Agency, 2002) 21.
[2] Informationization Office of the State Council of P.R.China, The Compendium of Vitalizing Software Industry (2002-2005), at http://www.bjcg.gov.cn/szcg/fgybz/t20050804_119229.htm.
[3] See Related Terms in
[4] Article
[5] See Related Terms in
[6] Article 2, Clause
[7] Article
[8] Article
[9] Shanghai Computer Software Development Model Contract Is Iinitial in China ,the speech made by Mr. Zhou Weidong, on Dec.15, 2003. http://www.qianlong.com/.
[10] Build a Well-off Society in an All-round Way, Create a New Situation in Building Socialism with Chinese Characteristics----the Report on the 16th NCCPC, 27.
[11] Article 37 of Several Policies on the Development of Software and Integrated Circuit Industry, State Council, Jun.24,2000, at http://www.chinaicip.com/policy/ZCFG_004.HTM.
[12] Article 38 of Several Policies on the Development of Software and Integrated Circuit Industry, State Council, Jun.24,2000.
[13] Several Decisions on Improving Socialist Market Economy by CPC, (
[14] Article 13 of
http://www.cqit.gov.vn/UserImages/00000177.doc.
[15] Article 11 of
[16] Article 6 of
[17] See Classified statistics of
[18] See Classified Statistics of
[19] Classified Statistics of
[20] See the lecture made by Mr. Bo Xilai at the Summit Forum of International Software and Information Service Cooperation for Ministers and Enterprisers from Different States, at
http://kjs.mofcom.gov.cn/aarticle/ztxx/bb/bf/200506/20050600130712.html.
[21] Informationization Office of the State Council, The Compendium of Vitalizing Software Industry (2002-2005).
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