How to go about protecting intellectual property in China

As the client’s purchasing agent on the ground in China, it’s not just factories that PassageMaker coordinates. For example, we often help clients register and monitor their intellectual property to ensure competitors (or sneaky suppliers) don’t gain control of the IP.

Below are excerpts from communications with some clients and potential clients. If you have questions about registering, protecting and monitoring your intellectual property, you may find the following Q&A of interest.

Part 3: Monitoring Intellectual Property

Aaron in Georgia asks: “I’m on a tight budget, how can I do some basic monitoring of my supplier’s factory to ensure they are not violating my exclusivity agreements and selling my product to other buyers?”

PassageMaker Representative:

As part of our vendor coordination services we often visit the factory in person. During these visits we look in the following places for the following reasons:

1. If there is tooling/molds which are to be used exclusively for your production, we check:

a) Where are the tools? If they are not stored in the right place at the right time, they may be in use at another factory running your parts for other buyers! For your reference, visit this page if you want to see some ways in which buyers were abused and how to protect your tooling/molds.)

b) How are the wear patterns on the molds? If you ordered 10,000 units but the tooling shows wear marks indicated a much larger production run…that’s a red flag your product is being sold out the back door.

2. We look in the sample room and check the company brochures (Chinese and English) to see if the product you have under the non-disclosure, non-compete agreement is being show for sale to other buyers.

3. It’s also a good idea to visit the warehouse and see where product is being shipped to. Often the brand and buyer is listed on the master cartoon. If we have a list of your competitors, we can keep an eye out for those names.

4. We can also walk the trade shows where your supply exhibits to check and see if your product is being shown to other buyers without your consent.

Even if you are overseas, you can still monitor your supplier in the following ways:

Have a friend contact the seller pretending to be interested in the product you have under exclusivity with the seller. If the seller is willing to take an order, that’s a big no-no.

Visit the factory’s website (in English and Chinese) and listings on GlobalSources.com and Alibaba.com to see if they are showing your product.

TaoBao.com is by far the biggest channel used by factories or factory staff to sell products out the backdoor. Check in periodically to see if your product is for sale and who is selling it!