Why NDAs Don't Work in China (Use an NNN Agreement Instead)

You have a brilliant product idea. You find a supplier on Alibaba, and before sending them your 3D CAD files, you make them sign your standard American or European Non-Disclosure Agreement (NDA).

A month later, you see your exact product being sold on AliExpress by five different sellers. What went wrong?

The Fatal Flaw of Western NDAs

A standard NDA is designed to prevent trade secrets from being revealed to the public. However, Chinese factories usually don't reveal your secrets to the public—they just secretly manufacture your product themselves and sell it to your competitors. A standard NDA does not strictly prohibit this under Chinese law.

What is an NNN Agreement?

To protect your IP in China, you need an NNN Agreement drafted in Chinese, subject to Chinese law. It stands for:

• Non-Use: The factory cannot use your design for any purpose other than producing your order.
• Non-Disclosure: They cannot share your designs with their subcontractors or friends.
• Non-Circumvention: They cannot sell your products directly to your customers behind your back.

The Crucial Step Before Signing

For an NNN Agreement to be legally binding in a Chinese court, it must include the supplier's exact, official Chinese company name and be stamped with their official red company seal (chop). English company names have no legal weight in China.

If you only know your supplier by their English Alibaba name, you cannot protect your IP.

Run a Safety Shield Verification today to get your supplier's official Chinese legal entity name and registration details, ensuring your legal contracts actually hold up in court.