China is a leading country in the making of a variety of products. It has cheap labor, competitive prices, and a wide selection of manufacturing companies. That is why entrepreneurs worldwide organize the production of their goods in the Middle Kingdom, and PartnerTrade helps them with this.
Let’s assume you have already found a reliable Chinese manufacturer, but how to protect your product from plagiarism and from stealing intellectual property? The NNN convention will help here.
Parties sign a document before starting work to avoid duplication of goods and problems with production delays.
What is the NNN agreement?
The China NNN Agreement is a document on non-disclosure, the inadmissibility of using products, and the prohibition of the use of confidential information outside the scope of the contract. The NNN agreement protects private property and provides customer confidentiality rights when dealing with manufacturers in China.
Sections of the contract
Inadmissibility of data use
This clause in the agreement means that the Chinese factory does not intend to copy, replicate or distribute your idea, concept, or product to compete with you. Moreover, the document ensures that the factory cannot resell your idea/product to competitors and other individuals or entities.
Non-disclosure of information
The non-disclosure clause obliges the manufacturer to keep confidential information secret and imposes a ban on its transfer to third parties. The document usually clearly states who can view and use product information.
If some persons are not allowed to confidential data, read it; The party that signed the contract is responsible. And this also needs to be spelled out in the NNN agreement.
Actions to circumvent the contract
This section of the agreement excludes the reproduction and duplication of your product’s idea, technology, appearance, and transfer (resale) it to potential competitors.
The NNN and NDA agreements are similar, but the first agreement is more reliable in protecting your product and ideas from further distribution.
The NNN agreement is usually drawn up in Chinese by the legal documents of the People’s Republic of China to avoid misunderstandings with the contractor. A different format of the agreement will not be valid in China.
The document must indicate what confidential information is, prescribe responsibility and measures for violation of the clauses of the agreement. In addition, be sure to write the exact cost of the work and the good’s production time.
Consider the following nuances to protect your intellectual property securely:
- write the agreement in Chinese to avoid double or incorrect meanings of terms;
- start from Chinese civil law, foreign acts in China may not be valid;
- you must label important information with a “CONFIDENTIAL” sticker to protect it from unwanted distribution;
- write a letter of consent to use your trademark and permission to export goods from China to facilitate customs clearance.
When working with Chinese contractors, there are many questions and misunderstandings. PartnerTrade will help you deal with the nuances of contracts, production, and delivery of goods from China to other countries. We carry out inspections at manufacturers’ factories and organize the delivery of samples so that you can be sure of products quality.
What does the NNN Agreement mean?
This Agreement is a non-disclosure document of the customer’s confidential information by the manufacturer (product diagrams, ideas, etc.).
What items must contain the document?
There are three main paragraphs of agreement – the Non-disclosure, the Circumvention, and the Non-use.
What does the Non-disclosure clause include?
This condition implies non-disclosure by the company of private information to other interested parties and liability for violation of this clause.
What does the Circumvention clause say?
This section obliges the contracting company not to pass on the technical details and ideas of the product to competitors or other manufacturing firms.
What is the clause about non-use?
The information in the paragraph prohibits the manufacturer from reproducing, using the idea and manufacturing technology outside the scope of the contract.
In what language should the agreement be provided?
Why do you need to mark drawings and goods ideas as “CONFIDENTIAL”?
To prevent the risk of being read by a third party.