NNN Agreement Template - Chinese and English
When searching for a manufacturer in China, you may wonder what type of agreement will best protect your ideas. Should it be a non-disclosure agreement (NDA)?
As experts in the China manufacturing legal landscape have pointed out, the answer is “no.” NDAs are not sufficient for protecting intellectual property (IP) or trade secrets in China. Instead, a non-disclosure, non-use, non-circumvention (NNN) agreement should be used. We recommend NNN agreements to all our clients handling proprietary information with China-based suppliers and manufacturers. However, it’s important to note that even with an NNN agreement, preventing IP theft can be extremely difficult unless your intellectual property is registered in China and you have a registered business entity there.
Download NNN Template
How to Use an NNN Agreement
We advise using an NNN agreement in both English and Chinese. This agreement serves as a tool to build a strong relationship with your supplier, as highlighted in the detailed overview, "Here’s why a Chinese NNN agreement is more effective than an NDA" by Gorilla ROI. Asking your potential supplier or manufacturer to agree to an NNN and obtain an official legal signature (and company chop) from their management helps create a solid foundation for your working relationship.
Unlike an NDA, an NNN agreement covers key expectations:
Non-Use: This ensures that the supplier will not use your confidential information to develop or sell a similar product to any third party. Many of our clients have encountered issues where a Chinese manufacturer replicates their product and sells it in markets where their brand lacks IP protection.
Non-Circumvention: This prevents the supplier or manufacturer from contacting, dealing with, or transacting directly with your customers. Without proper agreements, suppliers may bypass your corporate office and approach your regional distributors directly. This can be especially problematic if you don’t have strong relationships with your distributors or IP protections in those markets.
Having an NNN agreement template is essential when working with manufacturers in China. It provides a standardized and enforceable framework to protect your business interests. By clearly outlining terms on non-disclosure, non-use, and non-circumvention, the agreement helps safeguard confidential information, prevents intellectual property theft, and minimizes the risk of a manufacturer bypassing your business to work directly with your customers. This legal tool not only protects your products and ideas but also builds a more secure partnership with your suppliers, reducing potential disputes and keeping your business competitive in the global market.
For more information and resources, visit the Supply Chain Shark portal at portal.supplychainshark.com.
