What is NNN?
An effective NNN agreement is used to help protect your confidentiality from manufacturers in China, including non-disclosure, non-use, and non-circumvention.
NNN vs NDA
Most suppliers (receiving parties) have no motivation to disclose your confidential info, but NNN agreement protects your business more comprehensively. It requires that they don’t use your information, and they don’t go around you or help others do so.
However, if the supplier was NOT a Chinese manufacturer (e.g., distributor, consultant), it is difficult for them to use the info. NNN is too strict for them. In this case, NNN is too strict and unfair for them to sign an NNN, so NDA will be more suitable.
Can NNN really protect your IP?
NNN or NDA might be INVALID once you sell or advertise your new design publicly because the info is NOT confidential anymore. Also, you can’t stop 3rd party from using the info since they are NOT a contracting party. Therefore, applying for a patent in China is necessary if your design is unique.
If you don’t have enough budget to apply patent, you can set the non-use clause again in the manufacturing agreement when you decide to place orders with the Chinese factory.
Key terms of NNN agreement:
- non-disclosure, non-use, and non-circumvention of the receiving party.
- Joint liabilities: the receiving party should ask their subcontractors to do so:
- Product improvement: The disclosing party should have IP ownership of the product improvement.
- Breath of contract: the breaching party should bear the liquidated damage and the legal fees of the other party.
- applicable law: Chinese law is a priority if you plan to enforce it in China.
- Jurisdiction: choose a Chinese court or arbitration institute if the factory is located in China.
How I help you sign NNN?
- Please provide the info of both parties and your business project.
- Make a draft of the agreement, and amend it if necessary.
- Check the receiving party’s background, and signature/stamps to make such an agreement enter into effect.
Feel free to contact us if you are preparing to collaborate with the Chinses factory.
