Easy Imex often handles queries on how to protect sensitive intellectual property in the Chinese manufacturing process. As noted in this article, you can reduce the chances of copying and selling your product to your competitors in a variety of ways. Let’s take a look at your choice.
Protect your intellectual property outside of China
The best strategy for IP protection is to prioritize IP registrations in your main sales market. If you have a large budget and expect global sales, you should register your patents and trademarks in every market you plan to sell. This means that if you plan to sell your product in China, you also need to register your IP in China!
However, if you are a small business without funds, you need to give priority. It is expensive and time consuming to register IP on each market, so please deal with your customers and register your patents and trademarks in these jurisdictions.
Pre-manufacturing restrictions on IP theft
If you have a groundbreaking product, then you should definitely establish a legally binding and enforceable product manufacturing agreement through the Chinese mainland courts. Chinese law doctor Dr. Dan Harris pointed out that Chinese judges will not enforce foreign judgments. If you are preparing for contracts, agreements, NDA, NNN and so on, make sure to be done by the lawyer who knows how to meet Chinese standards.
The product manufacturing agreement usually includes the following: quality requirements, delivery time, product and intellectual property ownership, molding / mold ownership, NNN (non-competitive, non-circumventing, non-disclosure) and fines.
Limit the theft of the manufacturing process
If you have multiple components of the product, PassageMaker’s China operations manager Mike Bellamy proposed to separate the production of key technologies and send them to a reliable third-party warehouse for closed-door assembly.
The process isolates the final product in a controlled location, which limits the chances of stealing your ideas and creating sales to your competitors.
Prove your product
A reliable way to protect intellectual property is to make proof of its reproduction! As Josh Horwitz explains the outstanding QZ article, the groundbreaking design is not enough.
“Companies must create products that can not be completely removed from the hands, focus on the special features that can be protected, or create a coveted brand that consumers will pay more.”
This can include creating exclusive software to supplement your product, using complex manufacturing processes, prohibiting easy copying, and focusing on your brand and after-sales service.
Finally, the decision to manufacture outside of China, hoping to limit the opportunities for IP theft is invalid. Once the market, imitation can buy the product, send it to China for reverse manufacturing, slightly change, and then directly with you to compete with the market.