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Dealing with Chinese Counterparts (3): Drafting a NNN Agreement to Protect Your Valuable Information

Before you enter into an official agreement with your Chinese counterparts, such as a manufacturer, you may need to release some of your important information to the factory, such as your patent design and copyright. And of course, there are chances that a corporation will not proceed after negotiation. Under this background, singing along disclosure agreement before releasing those important Information could help you to protect your valuable Information, even the corporation does not work out.

Here are some Q&As and tips for you when you are drafting your NNN agreement with your Chinese counterpart.

Q1: How long could a NNN Agreement valid under the Chinese law?

A1: Under PRC laws, NNN Agreement can also be valid for a life time.

Q2: Assuming that it's limited for 10 years and I have found a partner/continue to work with them, does that mean that I should get a new NNN Agreement signed every few year to make sure that we wont have a "gap" in between?

A2: Normally speaking, you do not need to sign new agreement in every few years. However, if your Chinese counterpart change the entity he/she is using to do business with you, you may need to get a new one to bind the new entity.

Q3: What is your suggestion for liquidated damage clauses?

A3: Our suggestion for LD clause is as the following:

If the Receiving Party breaches its responsibilities under this Agreement, the Disclosing Party has the right to require the Receiving Party to immediately stop its conduct, take remedies, pay the Disclosing Party liquidated damages in an amount of USD 100,000 and compensate the Disclosing Party if there is any direct and indirect loss or potential loss arising therefrom.


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