China manufacturers are usually an ideal source for certain categories of custom products. Production occurs with defined quality and low cost.
However, IP (intellectual property) rights protection, as well as trademark protection, is a concern for American businesses. Below is an overview of tactics to reduce the risk.
Carefully Select a Supplier
Clients who want to go direct should strive to work with larger China manufacturing services that export most of their products. Clients who prefer to work with a US-based contract manufacturing company with dedicated, full-time staff in China should choose one with years of experience. These types of companies inherently understand and respect client’s IP rights.
Sign a Non-Disclosure Non-Compete Agreement
Manufacturing products in China involves the disclosure of sensitive information. A Non-Disclosure Non-Compete agreement is a good first step on the USA side. Using a US-based and China manufacturing connected company like ITI Manufacturing will have agreements that are tailored to off shore manufacturing.
Register IP Rights
Clients should consider consulting an intellectual property agent/attorney regarding the process of registering intellectual property in the form of a patent or trademark.
Avoid Unnecessary Disclosure of Sensitive Information
Clients who choose to go direct to a China manufacturer should qualify factories before divulging sensitive product information. Working through a contract manufacturer like ITI Manufacturing is most convenient as they will check suppliers’ references, audit production facilities, as well as engineering and design capabilities when custom products are needed. With this type of help a client can decrease business risk, increase flexibility, and keep their manufacturing options open.
Keep the Supply Chain Separate
In extreme cases clients can help protect their intellectual property by acquiring components from several different and variously located suppliers and keeping final operations and assembly details separate. That way few people are witness to the entire process. Depending upon the client’s situation this may be cost prohibitive or logistically unwise. Certain products more easily lend themselves to this type of supply chain design.
Registering a Trademark
Contract with an intellectual property agent/attorney to do the filing for you is step number one. Companies that do not have a permanent address in China will need to work with a Chinese state-approved agent if they want to register a trademark in China.
Here is a summary of the steps involved:
- Do a search at the China Trademark Office prior to applying for the trademark to determine if a similar trademark has been previously registered.
- All official trademark application forms must be completed.
- If the China Trademark Office determines the trademark is not like an already registered mark it will grant preliminary approval. The pending mark will be published in the Trademark Gazette. This listing is available on the Trademark Office’s State Administration for Industry & Commerce of the People’s Republic of China website.
- There is a 3-month waiting period during which time a challenge to the new trademark can be issued. If a challenge is issued the Trademark Office will notify the filing party. The filing party has 15 days to respond to the challenge which will trigger a review.
- If the filing party is not satisfied with the outcome of the review the filing party has 30 days from the time the review decision is received to file an administrative appeal to the court.
- If there are no challenges to the trademark filing within the 3-month period, the Trademark Office will register the trademark and publish notice of the registration in the Trademark Gazette.
- IP protection is only as good as the up-front precautions that are taken. No different than here in the USA China has rules for protecting IP. The more familiar American companies are with procedures and practices the better.
ITI Manufacturing can help clients maintain the integrity of their IP throughout the manufacturing process as well as take precautions in choosing trustworthy factories. However, for the best prevention it is up to the client to register their intellectual property in China using the proper channels, completing the paperwork, and filing the proper documents in the defined timeframes.
Call ITI Manufacturing for details and a no-cost quote to have your product(s) manufactured in China to your specifications. American Guaranteed China Manufacturing for your custom product. Call us today at (281) 242-7030.