Your NDA Will Not Protect Your Product in China
A Western NDA does almost nothing to protect your product in China: it only blocks disclosure, not a factory using your design itself or going around you to sell to your own customers. The agreement that works is an NNN — non-disclosure, non-use, and non-circumvention — written so the Chinese version governs under PRC law, so a Chinese court will actually enforce it.
An NDA only stops one risk. In China there are three.
An NDA stops one thing. It stops someone from telling your secret.
But in China the risk is not one thing. It is three. They can use your design themselves. They can go around you and sell to your own customers. And they can disclose it.
That middle one has a name. Circumvention. A normal NDA does not cover it. That is the gap they walk right through.
This is why founders get copied
The factory does not leak your file. It does not sell your secret. It just builds your product itself, under its own name.
I sat with a founder who did everything right. Two years building his product. He had an NDA, drawn up by a lawyer, signed by both sides. He sent his design and his samples and felt safe.
Six months later he was at a trade show, and there was his product on another company's table. His molds. His design. Another name on the box.
He called his lawyer and waved the NDA. The lawyer told him the truth. That paper was written for your country. The factory is in China. There is almost nothing you can do.
Why a Western NDA cannot be enforced in China
An NDA is foreign law and a foreign court. The factory is sitting in China.
Who is going to enforce that, and where? By the time you file anything, the product is already selling. That is not a small gap. That is the whole game.
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The agreement that works is an NNN
NNN means three things. No disclosure. No use. No circumvention.
But not every NNN is a good one. A weak one is worse than nothing. A real one has three parts. The Chinese version has to govern, not the English, because the court reads the Chinese. It has to name the platforms, so they cannot quietly sell your product where you never look. And it has to bind their subcontractors too, not just the factory you talked to.
Get that right, and a Chinese court will actually enforce it. And China does not ignore this anymore. In the right court, foreign companies now win most of these cases. But only with the right piece of paper.
Your 3 steps before you send a single file
One. Before you send anything, get the right agreement. An NNN, written for China, in their language, so it can be enforced there.
Two. Make sure it covers all three. Disclose, use, and circumvent. Not just the first one.
Three. Sign it before the first sample, not after the problem.
Get the NNN I use
A good NNN from a lawyer can cost a thousand dollars or more. So I made one. A real bilingual NNN, the exact one I use, built to hold up in a Chinese court. I put it at a fair price on purpose, so a small founder does not have to choose between protecting the product and paying rent.
Use it, or use a lawyer. Just use something before you send that file.
Frequently asked questions
Is an NDA enforceable in China?
Rarely in a practical way. A Western NDA points at a court in your country. The factory is in China. By the time you try to enforce it, the product is usually already selling.
What is an NNN agreement?
NNN stands for no disclosure, no use, and no circumvention. It covers the three real risks, not just the one an NDA covers. Written for China, it can be enforced in a Chinese court.
What is the difference between an NDA and an NNN?
An NDA only stops someone from disclosing your secret. An NNN also stops the factory from using your design itself, and from going around you to sell to your customers. And it is built to be enforced where the factory actually is.
Do I need an NNN before I send a sample?
Yes. Sign it before you send any drawing, sample, or spec. Once it leaves your hands without the right paper, you have no protection.
How much does an NNN cost?
From a lawyer it can run a thousand dollars or more. The bilingual template on this page is a fair price, built to hold up in a Chinese court.
Full Transcript
You signed this. And you think it protects your product.
It doesn't. Not here. Not in China.
I have watched this piece of paper fail good people more times than I can count. Let me show you why.
Here is the problem. An NDA stops one thing. It stops someone disclosing your secret.
But in China the risk is not one thing. It is three.
They can't disclose it. They can't use it themselves. They can't go around you.
That last one is called circumvention. And your NDA does not cover it. That is the gap they walk right through.
The agreement that covers all three is called an NNN. Hold that word. I will come back to it.
This is why Western founders get copied. And it is not what you think.
The factory does not leak your secret. It does not sell your file. It just builds your product itself. Under its own name.
Now come closer to you. If you send a drawing to a factory this week. Or a sample. Or your spec. With a normal NDA. You are wide open. And you do not feel it.
I sat with a founder. Good product. Smart guy. Spent two years developing it.
He did everything right. Or he thought he did.
He had an NDA. A lawyer drew it up. Both sides signed it. The whole thing.
He sent the factory his design. His samples. Felt safe. He had the paper.
Six months later he is at a trade show. And there is his product. On another company's table. His molds. His design. Another name on the box.
He calls his lawyer. Waves the NDA. And the lawyer tells him the truth. That paper is written for your country. The factory is in China. There is almost nothing you can do.
The NDA was real. It just could not be enforced where it actually mattered.
I make one of these every week from here in Shanghai. If this saves you one mistake subscribe. It genuinely helps me keep doing this.
So why did it fail. Think about what an NDA is.
It is foreign law. A foreign court. And the factory is sitting in China.
Who is going to enforce that. And where. By the time you file anything the product is already selling.
That is not a small gap. That is the whole game.
If this is opening your eyes tap the like. It helps this reach the people who need it before they send that first file.
So here is the fix. It is called an NNN. Three N's.
No disclosure. No use. No circumvention. That is the three.
But not every NNN is a good one. A weak one is worse than nothing.
The Chinese version has to govern. Not the English. Because the court reads the Chinese.
It has to name the platforms. So they cannot quietly sell your product where you never look.
And it has to bind their subcontractors too. Not just the factory you talked to.
Get that right and a Chinese court will actually enforce it.
That is the whole difference. An NDA points at a court that cannot touch the factory. An NNN points at the court right next door to them.
And here is what most people miss. China does not ignore this anymore. In the right court foreign companies win most of these cases now. But only with the right piece of paper.
So here is your move. Three steps.
One. Before you send anything get the right agreement. It is called an NNN. Written for China. In their language. So it can actually be enforced there.
Two. It has to cover all three. They can't disclose it. They can't use it. They can't circumvent you. Not just the first one.
Three. Sign the NNN before the first sample. Not after the problem.
Now here is the honest part. A good NNN from a lawyer can cost you a thousand dollars. Sometimes more.
So I made one. A real bilingual NNN. The exact one I use. Built to hold up in a Chinese court.
I put it at a fair price on purpose. So a small founder does not have to choose between protecting the product and paying rent.
It is in the description and the first comment. Use it, or use a lawyer. Just use something before you send that file.
And subscribe so next week's one reaches you in time.
This is where it splits. The founder who signs the right paper keeps his product. The one who trusts a handshake loses it.
Next Thursday. How to tell if the factory you are talking to is even a real factory. Or just a middleman in a rented room.
See you Thursday. From Shanghai.
The 7-Factor Supplier Checklist — the checks I run before a deposit moves.
Free. Plus the Monday briefing from Shanghai.