Protecting Your IP in China: Legal Contracts
A really important question we get asked, especially for small to medium-sized businesses looking to manufacture their products in China, is how do we protect our IP?
You’ve gone through the work of creating great designs that are unique to you and you want to make sure they are protected. How do we do it?
We use a three-pronged approach to protect your IP in China. Our three prongs work together to ensure that you can relax knowing that you are fully protected.
The first prong is making your contract legally binding in China?
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- First – in Chinese for the Chinese court systems. You are dealing in China with Chinese factories, so this is of the utmost importance. Many of the contracts we see are written in English and then translated into Chinese and are clearly not going to be upheld in a Chinese court (if it unfortunately ever got to that). So, we take a ‘Chinese first’ approach to ensure suitability for the Chinese court system. We then translate contracts into English so you can also understand it.
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- Second – financial penalties for specific breaches of contract. Your contract should state that manufacturers are financially liable if certain contractual conditions are not met. This liability should be for a specific amount of money that is large enough to act as a deterrent for the factory but reasonable enough to match the nature of the breach. This demonstrates that your contract has been written by somebody who understands the Chinese court system and will help prevent contractual breaches.
Ultimately, the last thing anybody wants is to have to go to court, and certainly not in a foreign country. Writing your contracts correctly will help stop 98% of breaches before they happen.