how to protect your business in China

plastic mold plant

Over the past few years, many OEM companies have used China injection molding manufacturers as a manufacturing base without taking the necessary steps to protect themselves. Without legal protection, the client is left with no recourse in the event of a legal dispute.

Accordingly, arbitration proceedings must be conducted in China, under Chinese law. Taking some basic legal steps can significantly lessen your risk as the Chinese legal system has evolved dramatically over the past decade.

The cost of such protection is minimal compared to the protection it will provide.

You can easily reduce your chances of experiencing problems with Chinese manufacturers by following the five basic steps.

  • 1. Make sure you have properly registered your intellectual property rights in the United States

If this is not done, then you will not have anything to protect in China. Before you go to China, make sure that your intellectual property for injection design is protected under the laws of the United States.

Create and register trademarks, slogans, and logos for your brand with the U.S. Patent and Trademark Office.Identify and guard your trade secrets and injection design proprietary information along with your U.S. Copyright Office registrations.

  • 2. Register your trademarks with the Chinese authorities

A trademark registration can protect you against counterfeit goods exiting China, from your competitors applying for a trademark in China, and from your competitors becoming locked out of the Chinese market from which your own products could be exported.

  • 3. Protect your secrets in China with a written agreement

Chinese law allows companies to contractually protect their know how and trade secrets through contracts, but they do not have a big portfolio of patents

.In these agreements, issues such as non-competes and confidentiality are also addressed. Without such a written agreement, there is no such protection.

  • 4. Product quality and payment terms are important factors to take into consideration

The rule here is that in order to ensure your success, final payments should not be made to the Chinese manufacturer until you have confirmed you will get an on time shipment with the correct injection molding items and quantities at the quality standards you require.

Typically, this is in the form of the cost of the inspection in China and the need to provide for a clear procedure for handling any issue that arises. You must take the initiative on this; you cannot rely upon the OEM manufacturer to do this for you.

  • 5. Utilize OEM Agreements that are comprehensive and comprehensive

The purchase order for injection molding is usually an essential part of the purchase procedure between a small or medium-sized business and their vendor, but it does not protect you.

A written OEM injection molding manufacturing agreement will protect you if you secure one with each Chinese manufacturer you deal with and ensure that all the issues discussed above are included, along with other basic legal concerns such as jurisdiction and dispute resolution.

The Chinese language version of the document should be made available as well, since it will be the version that matters in China.

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