Intellectual Property: How to Protect Your Valuable IP During Manufacturing in China

What Is Intellectual Property?

Put simply, your intellectual property (IP) is the idea, invention, or process behind your product, a creation of your intellect. This is a wide-ranging category that includes, among other things, trademarks, copyrights, patents, and trade secrets. The person who owns the IP has the power to decide how their IP is used and by whom.

When deciding on a manufacturer, you want to weigh whether they retain any IP ownership of your product. Without a written agreement, an unscrupulous manufacturer might claim your original IP as their own. But you can minimize these risks and protect yourself and your business in three important ways:

  1. Copyright
    • Copyrights protect works of original authorship, including words, designs, illustrations, and more.
  2. Trademark
    • Trademarks protect unique logos or taglines that help consumers identify a product or its maker, such as Nike’s “Just Do It” slogan or McDonald’s golden arches.
    • Unique trademarks (™) may be used in commerce without official registration, while registered trademarks (®) must be formally registered with the US Patent and Trademark Office (USPTO), usually with the help of an attorney.
  3. Patents
    • There are two types of patents, design and utility. Design patents protect the way a product looks, and utility patents protect the way a product works. Patents must be approved by the USPTO, and usually require a lawyer to navigate the process.

Copyrights, trademarks, and patents are the primary means of protecting intellectual property that others know about or could come to know about. Both copyrights and trademarks are created by performing a specific action: you gain copyright protection immediately upon recording or writing an original work, and you gain trademark protection when you begin using it in commerce. On the other hand, registering a patent is not optional.

Where Do Trade Secrets Fit In?

Unlike trademarks, copyrights, and patents, trade secrets are not public knowledge.

A trade secret is any valuable piece of private information a business uses to create or market a product or service that is also unknown to the public and that the owner has taken steps to safeguard. This is usually where IP protection starts, and savvy inventors require their manufacturing partners to safeguard their trade secrets.

Because they trade secrets are not covered by patents, copyrights, or trademarks, taking measures to protect them is still an important part of maintaining your IP. If your design is not patented, ensuring that it remains private could be one of your few methods of protecting it. Executing a nondisclosure agreement (NDA), or confidentiality agreement, is the most common method of making sure that your designs remain confidential. NDAs are contracts that create a legal obligation between parties to maintain privacy.

As a trusted manufacturing partner, RSP Inc. is pleased to offer you our standard nondisclosure agreement, and we are also willing to review your existing NDA. You can rest assured that we have our own internal policies and procedures in place to maintain your confidential documents and help protect your IP within RSP’s facilities both here and overseas.

Overseas Legal Protection: IP Protection in China

Currently, there is no worldwide patent, trademark, or copyright protection. That means that even if you hold a US patent to protect yourself against domestic competition, it does little to protect you from an imitator making your design in a foreign country like China. There are limited multi-country agreements requiring some countries to respect other countries’ intellectual property, but there remains no single method of protecting your IP globally. It must be done piecemeal.

If your manufacturer is outside the US, consider applying for patents or registering your trademarks and copyrights in the country of manufacture such as China. Even if you do not sell your product overseas, it may be worthwhile to obtain the legal rights to prevent others from doing so.

Assignment of IP Rights

As your manufacturing partner, RSP explicitly assigns all IP rights to you, our customer.  Of course, any designs and drawings that you provide to RSP remain your property, and any modifications to your design suggested by RSP engineers also become your property. To further maintain your privacy, we require all RSP employees to sign NDAs. These NDAs stipulate that all intellectual property our employees produce during the course of their employment with us belongs to RSP, and thus to our customers.

We have similar agreements in place with our trusted partners. So whether RSP is designing your product or simply recommending changes to your existing design, the ownership of the final design is always yours.

The bottom line is that our customers retain their intellectual property and have full IP rights to any new or modified intellectual property made by RSP on their behalf.

Questions to Ask Your Manufacturer

Before working with a manufacturing partner, protect yourself by getting these questions answered to your satisfaction.

  • Will you sign a nondisclosure agreement? Have your employees signed nondisclosure agreements?
  • Do your employees have IP assignment agreements in place? What about your partners?
  • How will we resolve any IP disputes?
  • How will you protect my IP overseas?