Posts Tagged ‘Manufacturing in China’
Protect Your IP When Manufacturing in China: Don’t Let Your Ideas Fall Into the Wrong Hands
Information is becoming accessible due to the easy distribution methods available, which makes safeguarding your intellectual property when manufacturing in China a challenge.
No matter what stage of business you’re in, protecting yourself from those who would steal your ideas should be the top priority for any entrepreneur out there.
So, let’s take a closer look at this hot-button issue and how we can learn to cope with it.
1. US IP Law Does Not Guarantee IP Protection In China
The United States has some of the strongest intellectual property rights (IPR) laws in the world. However, these laws do not guarantee IP protection in China.
You might have your trademarks, patents, and copyrights registered in the US, but this would provide you with no protection in China if there are any IP issues that happen.
So you have to be proactive about protecting yourself.
Try to address your IPR with your contract manufacturing partner in China at the very outset – for too many Western companies it wasn’t until they suffered consequences later that they realized their mistake.
2. Conduct Background Checks
The first step is to conduct a background check on the company and individuals you’re looking to partner with.
This will help you get a sense of their business practices and whether or not they’re reputable.
You can look it up online by yourself or ask for references from others who have used contract manufacturing services in China.
There are many IP theft stories online that people share about their experiences working with Chinese manufacturers, which could serve as a warning to you.
It’s important to understand that IP protection can vary significantly depending on where the manufacturer is located and what type of industry they work in, so don’t rely solely on one method to safeguard your intellectual property (IP).
3. Create A Confidential File
Before finalizing a manufacturing supplier, you have to create a list of confidential files with product details like drawings, descriptions, production plans, and prototype update records.
When you need to discuss the manufacturing process with your chosen contract manufacturer in China, avoid sending your original product drawings or product descriptions.
This is one of the easiest ways for someone in a manufacturing company to steal your intellectual property (IPR).
If you absolutely must, send digital copies that can’t be easily reproduced. You can also consider watermarking them or sending them as password-protected files.
Also, make sure you have added dates wherever possible because the first date of use is critical in IP matters.
4. Create Confidentiality Agreements
The next best thing would be to have a written IPR agreement with your manufacturing factory and any other partner companies involved in the process so that all parties are aware of how you want it handled from start to finish.
You have to sign an NNN agreement with your supplier, which means Non-disclosure, Non-use, and Non-circumvention. It is a legally binding contract between two parties in which one party agrees to protect the IP rights in China.
By having your partner sign NNNs, you can help protect your company’s confidential information.
Furthermore, make sure to review and inspect any agreements made with local manufacturers before signing. If you do have a dispute, they may only address it in the Chinese version of the document which could give them an unfair advantage over you.
5. Engage with the Chinese IP Regime
There is no such thing as international protection for your intellectual property.
If you think highly of your IP, make sure to protect it thoroughly. You need to get it protected in China by filing your patents, trademarks, and copyrights with local authorities such as:
- China National Intellectual Property Administration (CNIPA)
- Trademark Office of China National Intellectual Property Administration
- National Copyright Administration of the People’s Republic of China (NCAC)
- Ministry of Commerce, People’s Republic of China
Remember to research the relevant IP regulations in China because they may differ significantly from your home country. Also, remember to have everything properly translated into Chinese because only these translated versions will be held as valid.
Are You Looking For A Contract Manufacturer In China You Can Trust?
Registering your intellectual property in China and the United States does not always guarantee its protection. One thing to remember is that enforcement of these laws can be unpredictable or time-consuming.
Ultimately, it all depends on who you’re working with and the kind of relationship you’ve established, which means careful consideration needs to go into choosing a Chinese contract manufacturer if they’ll work intimately with your company over an extended period.
Once you’ve selected one, it’s imperative that both parties set up clear processes for protecting your intellectual property at every stage of production or else risk losing it entirely.
Now, if you are looking for a reliable and professional contracting manufacturer in China, try to work with us Shield Works.
Over time, we have developed a list of IP protective methods at our custom manufacturing and precision assembly facility that has proven 100% effective at preventing IP infringements.
- We have state-of-the-art fingerprint access secure production zones to protect your interests and provide full IP protection at the source of manufacture.
- We have legally binding NDAs with every external body that we may work with during the process of your assembly line to ensure this is protected.
- We partner with Innopat, a leading Zhuhai-based IP industry expert to provide our clients with clear, no-nonsense advice and IP protection services.
Shield Works is a British-owned and managed contract manufacturing company in the South China Greater Bay Area, providing complete custom manufacturing and precision assembly services for western companies who are fed up with poor product quality, lack of transparency, and are worried about the reliability and delivery time from their Chinese suppliers.
We attribute our success to the dedication and expertise of our engineering team who is highly qualified and experienced. With over 15,000 projects completed, we’ll provide you with tailored advice, based on your situation. Tell us about your project and get a quote!
Supply Chain Networks: Why Does Manufacturing in China Still Work?
Whether you’re outsourcing your production to China or not, there is no denying that manufacturing in China is one of the best options for many overseas companies.
China has maintained its position as the world’s largest manufacturing hub for the past 12 consecutive years.
There are many reasons why manufacturing in China still works.
Let’s dig a little deeper into why.
Does China Still Have Cost Advantages?
In the past decades, we have witnessed the rapid growth of China’s development. Most believed that it was the cost advantage and human resources that made China succeed.
Maybe it was, but things have changed.
Nowadays, China’s average labor costs aren’t low compared to many southeast Asian nations, such as Vietnam, Malaysia and the Philippines. The wages of skilled workers and high-teach talents grow fairly fast. Also, the average land prices are rapidly rising.
Therefore, there are many concerns that overseas companies tend to move their production to lower-cost countries since labor costs and land prices are getting higher in China.
However, it’s reported that foreign direct investment (FDI) topped 1 trillion RMB in 2021. It’s pretty clear that the comprehensive strength of China as a manufacturing superpower shouldn’t be neglected.
The answer is that China’s supply chain system is far more advanced than any other in the world.
Products Sold Worldwide Are Manufactured In China
You may have heard that in China, there are some small cities or even small towns
that are inconspicuous making world-class manufacturing contributions.
For example, Huludao, a coastal city in the Northeast China’s Liaoning province, is producing 25% of swimsuits in the global market. Since 2011, Huludao has been hosting an international beach-swimwear culture expo to expand its businesses and brands internationally.
In Yucheng County, located in Henan Province, more than 1,200 measuring tape making companies whose combined annual output exceeds 1.5 billion steel measuring tapes, accounting for 85% in China and 60% around the world.
So, you may wonder how such industries without high technology or difficult designs find their business opportunities.
By relying on China’s supply chain system, manufacturing in China will be more efficient, helping many businesses from home and abroad are able to gain their footholds.
The Problem Between Efficiency & Flexibility
Simply put, imagine that you want to outsource your production to a factory in China, there is no doubt that you will choose a high-efficiency factory to work with.
But keep in mind that only by being more specialized can a factory improve efficiency. In this case, it’s not hard to imagine this factory will be locked in certain product lines.
In this case, if you want something to be changed quickly, this factory will not be able to satisfy your needs and maybe you will turn to someone new. So, you also want the factory to be flexible. But flexibility is an obstacle to becoming a specialization.
Now you can see that keeping high efficiency and flexibility may not be compatible at the same time in a normal factory.
How Do Supply Chain Networks Work?
However, things will be much different if there is a powerful supply chain network.
Now there are tons of small and medium businesses (aka SMBs) that are ready to produce only some basic parts. And these SEBs are specialized in their field. Only in this way can these factories improve their efficiency without sacrificing much time and resources. Each SMB produces the basic elements, and every part can be easily assembled in another factory.
Then, all the SMBs get connected to be a wide supply chain network, solving the flexibility problem. In the end, these SMBs in the towns or the cities make themselves the certain type of manufacturing clusters.
It’s like Lego construction. Different factories produce different specific shapes of blocks with high efficiency. When you need some certain shape of blocks, you can purchase whatever you need and get them assembled, building your products.
The supply chain network connects businesses, making it easier for you to gather information and build your enterprise.
More importantly, the whole network nurtures an ability to control costs, which makes it hard for lower labor costs and land prices hard to contend with.
Let Shield Works Be Your Custom Manufacturing Partner
If are moving your production to China and looking for a reliable manufacturing partner, look no further. We are glad to help.
Shield Works is a British owned and managed company providing customized OEM manufacturing and assembly activities. Contact us to discuss your project today.