Shareholder Tech Contribution Dispute: Hainan Court Clarifies Boundaries of Tech Use After Cooperation Breakdown

WISECODE Take

Many business owners mistakenly believe that without a formal license, a company's use of technology contributed by a shareholder automatically constitutes infringement. In a judgment disclosed on August 4, 2026, the Hainan Free Trade Port Intellectual Property Court ruled on a case where Chuang-mou Company co-founded Xin-mou Company in 2021 with its MMT technology, and later sued in 2024 for 20 million RMB in damages. The court rejected the claim, ruling that since Chuang-mou was a shareholder and involved in operations, Xin-mou's acquisition of the tech was not through improper means. This case provides a safety net for joint ventures lacking written licenses; if a shareholder voluntarily provides tech and participates in operations, the risk of trade secret infringement claims after cooperation breaks down is extremely low, while those with clear upfront agreements remain unaffected. Zhi-Dian's "Trade Secret Management System Establishment" service helps enterprises clarify technology ownership at the start of joint ventures to avoid litigation. I suggest: first, clearly define tech ownership, licensing terms, and exit mechanisms in a written contract before establishing a joint venture; second, preserve meeting minutes and shareholder communication records to prove the legitimacy of tech acquisition. The key to preventing disputes is to legally decouple shareholder status from technology licensing right at the start of cooperation.