Make NNN Agreements Work in China

Can signed NNN agreements (non-disclosure, non-use, non-circumvention agreement”) with businesses in China help protect your intellectual property? The answer is yes. The only question is to what extent? Have NNN agreements signed certainly does no harm. Make it tailored to the realities of Chinese judicial system is even better.

WHAT YOU NEED TO KNOW

  • As long as you are doing business with or in China, before having any of your intellectual property disclosed to any third party, you need to first try to have it registered. Either it’s a trademark, patent, copyright or any other type of intellectual property. Don’t heavily rely on any agreements or contracts that only bind parties for protection.
  • “NNN agreements”is not really a legal term in China. Chinese lawyers may get a sense of what it is by reading the content and understanding the logic behind it, but our litigating experiences in China tell us that such an agreement needs to be revised to make it enforceable, or at least, tailor it into an intimating enough version so that the Chinese party will honour it.
  • You may use lawyers from your own country to draft NNN agreements and have Chinese lawyers revise it. Or, use competent and capable Chinese lawyers to draft it directly. I can’t stress it enough to all of our clients: applicable law is local, and the judicial system is local.
  • Your NNN agreements need a Chinese version, and the Chinese version shall prevail. Make Chinese the governing language of your CNN agreements. The variation in meanings between two languages may undermine the strength of your NNN agreements. When there is a dispute (hopefully not) that goes to a Chinese court or arbitration, you will be ordered to have a translation version. So why not to prepare one in your favour from the very beginning? You can , of course, request for an translated English version for your own reference.

WHAT YOU SHOULD PREPARE

Before contacting us, we encourage you to be well-prepared in the following areas:

  1. Provide us with both parties’ business information, e.g. company full legal name, address, contact, etc., respectively.
  2. Provide us with drafted NNN agreements (if you have), and inform us of your major concerns, of goals to achieve.
  3. Instruct us if you need us to conduct a preliminary due diligence on the Chinese party — rely on our corporate social credit system (“CSCS) and our lawyer skills, we can provide you with China company verification report.
  4. Inform us if you think your Chinese party may need to disclose information of your intellectual property to any necessary parties such as sub-contracted parties as agreed upon or without your consent.

NOT JUST FOR MANUFACTURING

We recently approached by a few new clients who directly requested us to draft NNN agreements for their non-manufacturing business. These clients came from industries of creativity, e.g. designing, internet-based content sharing and so on. Intellectual property, especially copyrights, are their heavily valued assets. In times of uncertainty, you never know if your business partner, or even the public might just snatch your ideas away. NNN agreements and its concepts may protect you, either called as NNN agreements, or any other documents that share its legal essence.

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