Protect your IP from China with an NNN Agreement
Protect your IP from China with an NNN Agreement

United States companies all too often make the mistake of trying to protect their intellectual property from China by using a U.S. style non-disclosure agreement (NDA). These agreements do not work for China. Chinese companies know this and so they willingly sign them.

U.S. style NDAs focus on preventing disclosure of trade secrets to the public and they are written in English, subject to U.S. law, and exclusively enforceable in a U.S. city. These things all make complete sense if you are looking to stop an American company from revealing your trade secret, but this kind of NDA is of no value when dealing with your typical Chinese company based in China.

None.  

First off, the fundamental issue when dealing with a Chinese company is not protecting your trade secret from being disclosed to the general public. The Chinese company that wants to steal your idea does not want to do so to reveal it to the general public; it steals your idea to use for its own benefit. This means your non disclosure contract with your Chinese counter-party must make clear that whether the information you provide is a trade secret or not, the Chinese company cannot use that information in competition with you.

The other fundamental problem with U.S.-style NDA agreements is that it they are not enforceable in China. Chinese law allows for protecting trade secrets and for contracts that provide NNN protections. But for such a contract to be effective and enforceable in China it should be written in Chinese, governed by Chinese law, and exclusively enforceable in a Chinese court. See China Contracts That Work.
Do not use a U.S. style non-disclosure agreement. Instead, use an NNN (non-disclosure, non-use, non-circumvention) agreement written to be enforceable in China. For all that entails, check out China NNN Agreements.

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.