The first step to engaging a manufacturer of goods in China is finding a good one. But, before you engage the manufacturer, you must require that it execute an NNN agreement. This is a non-disclosure, non-use, and non-circumvention agreement written to deal with the specifics of manufacturing for your goods in China. It must be drafted so it is enforceable in China, and needs to be in Mandarin, Cantonese, and English.
What is Non-Use in China?
The manufacturer agrees in writing not to use your idea or concept or product in any way that would be competing with you. It essentially will put you in control of the factory’s actions, while at the same time protecting your trademarks, copyrights, patents, and trade secrets.
What is Non-Disclosure in China?
Here you prohibit a Chinese manufacturer from disclosing your idea and concept to anyone. You inform 1) that disclosure is strictly prohibited, and 2) if there is infringement by anyone associated to the manufacturer, the manufacturer will be fully liable.
What is Circumvention in China?
This will help protect you from your manufacturer selling your products to your own clients or potential clients at a lower rate.
How should the NNN agreement be written?
It needs to be written to be enforceable in a Chinese court with jurisdiction over the Chinese manufacturer. Chinese law must be the governing law, Chinese language the governing language, and exclusive jurisdiction is in a Chinese-focused approach.
We work with experienced Chinese law firms and attorneys who can help negotiate and draft such an important document on your behalf. Due diligence is the key to your success. Do not let your manufacturer steal your product or ideas and sell your goods for 50% of its value to your customers.