Protecting your IP and tooling when sourcing

Protection is territorial, and that is the whole problem

Intellectual property rights only exist where they are registered. A UK trade mark protects you in the UK. It does not stop anyone in China from registering the same name, making the product, or selling it to a buyer in another market.

Most UK businesses assume their rights travel with them. They do not, and the gap is where nearly every unpleasant surprise in this area comes from.

The practical consequence is that protection has to be arranged in China, before you share anything, and not after a problem appears. Almost every remedy in this article is cheap in advance and difficult or impossible afterwards.

Register your trade mark in China, early

China operates a first-to-file trade mark system. The right belongs to whoever registered it, not to whoever invented it or used it first. That means a third party can register your brand name in China entirely legally, and you can find yourself unable to use your own name there.

This is not a theoretical risk. Trade mark squatting on foreign brands is a known pattern, and the parties doing it are often people who have seen your brand precisely because you sent it to factories asking for quotes.

In the worst case, a registered mark held by someone else can be used to block goods bearing that mark from leaving China, which means your own production can be stopped at export. Register before you start approaching suppliers, register in the classes that actually cover your goods, and consider registering a Chinese-character version of the name as well, because if you do not choose one the market will choose one for you.

Use an NNN agreement, not an NDA

A Western-style non-disclosure agreement is usually the wrong instrument. It addresses disclosure, and disclosure is rarely your problem: the factory is not going to publish your drawings. The risk is that they use your design themselves, or sell to your customers directly.

An NNN agreement covers non-disclosure, non-use and non-circumvention: they may not reveal it, may not use it themselves, and may not go around you to your customers. That maps onto what actually goes wrong.

For it to be worth anything it has to be enforceable where your supplier is. That normally means written in Chinese, governed by Chinese law, naming a Chinese court with jurisdiction over the supplier, and specifying a contractual damages amount so you do not have to prove your loss to get a remedy. An agreement in English under English law, which your supplier's local court will not act on, is decoration.

Register designs and patents where it matters

If the appearance of your product is the valuable part, a registered design protects it, and China has a design registration route that is comparatively quick and inexpensive.

If there is a genuine technical invention, patent protection is worth advice. Note that China also has a utility model right, which is faster and cheaper than a full invention patent and useful for mechanical improvements.

One warning that catches people out: publishing or selling your product before filing can destroy novelty and with it your ability to register. If you have an invention, take advice before you launch, not after.

Recordal with Chinese customs

A less well-known step that is genuinely useful. Once you hold registered rights in China, you can record them with Chinese customs, who can then detain suspected infringing goods at export.

It is inexpensive relative to litigation and it works at the choke point, since counterfeits of a UK brand made in China have to leave China. It only works if the underlying right is registered there first, which is another reason to register early rather than in response to a problem.

Practical habits that reduce exposure

Do not send full drawings to a long shortlist. Share what is needed to quote and hold back the parts that make the product distinctive until an agreement is in place.

Split production where a single component carries the value, so no one supplier holds everything.

Own your tooling in writing, including the right to have it released, and know where it is stored. Tooling ownership is both an IP question and the thing that decides whether you can change supplier.

Keep dated records of your own design process. Evidence of what you created and when is what turns an argument into a case.

And remember the commercial defence. For most SME products the durable advantage is brand, packaging, service and customer relationships, because those are harder to copy than a moulding.