Unlike CM agreements, where manufacturers can manufacture hundreds or even thousands of different products, MDGs often specialize in only a handful of categories. As it is the foreign company that comes with an original concept and design, it owns the rights related to design. But there are circumstances in China where the Chinese factory asserts THE law of IP by arguing that the factory, since all the research and marketing work has been done in China, has the IP in product design. For this reason, Chinese lawyers suggest that their clients be particularly careful and vigilant when singing the Original Design Manufacturing Agreement in China. From the outset, they must have a clear picture of these design and manufacturing rights, prices and production rights, and intellectual property rights. This means that you need an ODM agreement that determines how they are resolved. Second, no matter what our contracts we give you at the end will not be right for what you do, and the changes you make to it will only do it even less properly. There is much more to making a deal with a Chinese company than simply sending a contract and getting them to sign it. You must first perform at least a basic due diligence to ensure that the company with which you negotiated is the same company that signed your contract, and to ensure that you have the name and address of the company correctly, and to ensure that Chinese law effectively allows it to enter into this type of agreement. It is often much more complicated than we think. At least 30% of the time the contractor is actually a business in Hong Kong or Taiwan, and in this case, a contract in the PRC does not even make sense.
I`m not going to sell you a contract that has a 30% chance of being for the wrong country! At least 30% of the time, we find irregularities in the company`s information, and we must continue to investigate to clarify things. And then there are the moments when we discover that there is not really a company, and that the Chinese “society” was in fact a total scam. See China`s fraud season begins at the beginning of this year. The value of your lawyer is often more in reading what a contract should say than in the actual development and the former usually takes as much or more time than the latter. Our China manufacturing agreements and licensing agreements on China are an excellent example, and we get a lot from the “prejudicial question” of both.