Here are some measures you can take to keep your IP safe when sourcing in China:
Take steps to protect your IP BEFORE you start sourcing.
Be the first to register-First to Market vs. First to Register.
File all legal documentation at home and in China.
Do not share info without nondisclosure or other agreements in place.
At the same time, do not rely solely on NDAs and noncompete agreements. Attach bilingual MOUs to purchase orders. The MOUs must be initialed by a person in authority.
Make sure you follow Chinese law in China.
Do all due diligence.
Involve third parties for sensitive information.
Establish long-term personal relationships.
Get to know industry and government figures in your particular field.
Learn about customs and develop contacts on both sides of the Pacific.
Have a regular, physical presence.
If custom-made, own the tooling outright.
Keep an eye on tool and sample rooms, and the warehouse.
Pull molds and dies.
Require samples to be returned.
Distribute components to various suppliers instead of just one. Your payments, penalties and ship dates should be contractually tied to QC reports.
