Updated February 2026 | Legal enforcement
A US brand was manufacturing a private label product in China.
Not a patented invention. Just a strong product with:
They were manufacturing with one supplier.
They believed they were protected because:
They had an NDA.
Signed. Stamped. Filed.
The client thought: "We did the right thing. We're covered."
6–8 months into production, they discovered:
Their product was being sold inside China.
Same design. Same packaging layout. Same photos. Same copy.
Not "similar."
Same.
Then they found something worse:
The supplier was offering it to other overseas buyers.
Through a trading company.
So now it wasn't just IP theft.
It was:
The NDA was a Western-style NDA.
Meaning:
So when the client confronted the factory, the factory basically said:
"We didn't breach anything. This is not confidential. This is just a product."
And that's the China reality:
Chinese suppliers don't see "your product" as your property unless the contract makes it painful to touch.
And the NDA didn't.
Even if the NDA was "valid" in theory…
The client could not enforce it.
Not realistically.
To enforce a US NDA, they would need:
So the NDA became what it really was:
A psychological document.
Not a protection mechanism.
We didn't "fight" the NDA.
We replaced it with enforcement mechanisms.
We put in place an actual China-ready NNN:
This is the difference:
NDA = "please don't"
NNN = "if you do, you pay"
We added a second layer:
An OEM agreement that included:
This matters because:
You can't enforce what you can't see.
This was the key.
We structured the workflow so the factory could not quietly sell extra units.
How?
We controlled:
So even if they produced extra units, they couldn't sell them easily without leaving fingerprints.
Here's the part that actually changed behavior:
We made it clear that:
Factories understand one thing:
Local legal exposure.
Not foreign threats.
They stopped.
Not because they became ethical.
Because the risk changed.
They realized:
1) They're written for US/EU courts
Chinese factories don't care about US jurisdiction. By the time you file in US court, enforce a judgment, and try to collect in China, the damage is done.
2) They define "confidential information" too narrowly
"Trade secrets" and "proprietary information" are hard to prove in China. Design specs, packaging layouts, supplier lists — those are all considered "just business" unless your contract explicitly says otherwise.
3) They have no penalties that matter
"Injunctive relief" and "reasonable attorney's fees" sound good in California. In Guangdong, they mean nothing. Chinese factories respond to specific RMB penalty amounts.
4) They're in English only
If it's not in Chinese, it's not enforceable in Chinese courts. The English version is for you to read. The Chinese version is the one that counts.
5) They assume good faith
Western NDAs assume both parties want to avoid breach. Chinese suppliers assume: "If I can do it without getting caught, it's not really wrong."
N = Non-Disclosure
Standard confidentiality. They can't share your info.
N = Non-Use
They can't manufacture your product for anyone else. This is the critical piece most NDAs miss.
N = Non-Circumvention
They can't go around you to sell directly to your customers or through trading companies.
Plus:
It's not the contract alone.
It's the contract + physical presence + operational control.
Here's what that looks like:
Contract layer:
NNN + OEM agreement with audit rights and penalties
Physical layer:
On-site inspections, warehouse checks, production audits
Operational layer:
Control of packaging, labeling, and shipment release
Leverage layer:
Local legal presence, factory registration details, ability to escalate in their city
The factory knows:
That's what changes behavior.
If you're manufacturing in China, Vietnam, India, or Indonesia:
Standard NDAs are comfort documents, not protection.
They make you feel safe. They don't make you safe.
NNNs only work if they're enforceable locally.
US jurisdiction, English language, vague penalties = useless.
Contracts without oversight are just paper.
You need audit rights, inspection rights, and physical presence to enforce anything.
Factories copy by default.
Not because they're unethical. Because it's profitable and usually consequence-free.
The only protection is enforceable risk.
If copying you costs them more than it makes them, they won't do it. If it doesn't, they will.
Before you share:
Before production starts:
Not after. Once they have your tooling and know-how, enforcement becomes harder.
With every supplier in the chain:
Main factory, sub-suppliers, packaging providers. Everyone who touches your product.
When you're ready to enforce:
Don't sign an NNN unless you're prepared to audit, inspect, and escalate. Otherwise it's just theater.
Q: Can I use a US-based NDA for my China supplier?
You can, but it won't protect you. Chinese courts don't enforce US judgments easily, and US legal action is expensive and slow. Use a China-jurisdiction NNN if you want real protection.
Q: What happens if my supplier breaches the NNN?
With a proper NNN, you can file in Chinese local courts for the penalty amount (RMB 1,000,000+). If you have evidence (inspection records, photos, shipment docs), enforcement is realistic. Without a proper NNN, you have no practical recourse.
Q: How do I prove my supplier is copying my product?
Physical inspections, warehouse audits, production output checks, online marketplace monitoring (Alibaba, 1688), and shipment record reviews. That's why the OEM agreement needs audit and inspection rights built in.
Q: Do I need a lawyer in China to enforce an NNN?
Yes. Local lawyers who understand factory enforcement and can file in the supplier's jurisdiction. We work with China-based legal teams who handle this regularly.
Q: What if my supplier refuses to sign an NNN?
Red flag. Professional factories understand buyer risk and accept NNNs as standard. If they refuse, they're either planning to copy you or already copying someone else. Find a different supplier.