Paying for a mold does not put you in control of it. Ownership depends on what your documents say, possession sits with the factory, and PRC law gives the factory a right to hold on to it in some situations. If your paperwork shows that you paid for the tooling and it belongs to you, you can demand its return. But if you owe the factory money, it may be entitled to keep the molds until you pay, sometimes even for debts from other orders. So the first question is not "who owns the molds?" but "do we owe this factory anything?"
This guide is for overseas brand owners and buyers who have paid for injection molds, dies, jigs or fixtures at a factory in mainland China and now want to move production, end the relationship, or simply get their tooling back.
Who owns the molds?
PRC law has no special rule for tooling. Ownership follows the agreement, and courts read the whole paper trail: quotations, proforma invoices, purchase orders, tooling invoices, payment records and emails. In our experience, disputes usually come from one of four arrangements.
- A separate mold fee, paid in full. The strongest position for the buyer, especially if the invoice or contract states that the molds belong to the buyer.
- Tooling cost amortised in the unit price. Ownership often depends on reaching a stated quantity. If orders stop before then, the factory will argue it still owns the molds or is owed the unamortised balance.
- A "refundable" mold fee. A quotation reading "mold fee USD 8,000, refundable after 100,000 pcs" is often read as the factory owning the mold and returning your contribution once volumes are met. Buyers frequently misunderstand this wording.
- Nothing written. Then ownership is argued from who paid, what was said in emails and chats, and how the parties behaved. It is winnable, but slower and less certain.
Watch for the language trap. An English email saying "the molds are yours" does not help much if the Chinese proforma invoice you accepted says 模具归乙方 ("molds belong to Party B"). See our note on which version of a bilingual contract prevails.
When a factory may lawfully keep your molds
A creditor that lawfully possesses a debtor's movable property may retain it if the debt is unpaid (Civil Code Art. 447). For a contract for work, the Civil Code specifically allows the factory to retain the work product if the customer does not pay (Art. 783). Between two companies, the lien need not even arise from the same transaction (Art. 448), but the Supreme People's Court has narrowed this: where the debt and the retained property are not part of the same legal relationship, the debt must arise from the companies' continuing business dealings (Security Interpretation, Art. 62).
The limits matter as much as the right:
- Molds owned by a different group company. A factory cannot hold a third party's property for a debt that is unrelated to that property (Art. 62). If the tooling is owned by your IP or holding company while the unpaid invoices belong to a separate trading entity, the factory's position is much weaker.
- No immediate sale. Before selling retained property, the factory must give you a period of at least 60 days to pay (Art. 453).
- A contractual no-lien clause works. Movable property that the parties have agreed may not be retained cannot be retained (Art. 449). This is the single most useful clause in a tooling agreement.
- Custody is the factory's duty. A contractor must take proper care of materials supplied by the customer and of completed work, and is liable if they are damaged or lost (Art. 784).
When the factory is simply holding you hostage
Sometimes there is no genuine debt. The factory is losing your business and uses the molds as leverage, or, worse, keeps running your tooling to sell your product to others. The first is a breach of contract and an unlawful retention of your property; you can demand return of the molds (Art. 235) and damages. The second may also infringe your intellectual property or amount to unfair competition, and it changes the tone of the negotiation considerably. Evidence of the factory's sales, such as test purchases, online listings or customs data, is worth collecting early.
How to get the molds back
Resolve the money question
If you genuinely owe the factory money, paying it, if necessary into escrow or under a written reservation of rights, is usually faster and cheaper than any legal route. If the claimed debt is disputed or relates to another entity, say so in writing and explain why no lien applies.
Serve a precise written demand
List every mold by number, cavity count and photograph, state the legal basis of ownership, set a pickup date and name the logistics company. Send a Chinese version to the registered address. Vague demands for "our tooling" invite vague answers.
Freeze, then sue if needed
Where there is a risk that molds will be moved, used or damaged, a Chinese court can order preservation before or during proceedings, usually against security. A claim for return of property and damages then follows in the forum set by your contract.
When the molds are released, inspect them with a written handover record noting their condition, and plan the next step before you collect: transfer to a new factory in China, or export. Molds shipped abroad still go through export declaration, so involve your freight forwarder early.
Prevention: the tooling agreement
Most of these disputes are avoidable with a short, separate tooling agreement signed in both languages. At a minimum it should state that the buyer owns the molds from payment of the mold fee; list each mold with its number and photographs; require an ownership nameplate on each mold; limit use to the buyer's orders; set custody, maintenance and insurance duties; require return within a fixed number of days on request; and, most importantly, provide that the molds may not be retained for any debt (Art. 449). An annual photo audit of the tooling costs very little and makes any later dispute far easier to prove.
Frequently asked questions
- I paid for the molds. Can the factory still refuse to return them? Yes, if you owe it money under the same order, and in some cases for other debts from your ongoing business together. If you owe nothing, refusal is unlawful and you can demand return and damages.
- Can the factory sell my molds to recover a debt? Not immediately. It must first give you at least 60 days to pay, and it cannot hold a different company's molds for an unrelated debt.
- Can I prevent a factory from ever holding my tooling as security? Yes. PRC law gives effect to an agreed clause that the property may not be retained. Put it in a signed tooling agreement.
- The factory is using my molds to make products for others. What can I do? Preserve evidence, demand that it stop and return the molds, and consider preservation orders together with breach of contract and IP or unfair competition claims.
Related service: Mold & Design Ownership ↗
Tooling disputes turn on documents and leverage.
We can review your mold payments and supplier documents, assess any lien the factory may claim, and handle demand letters, preservation applications and recovery, or draft a tooling agreement before the next project starts.
Related Reading
- Chinese Supplier Breached the Contract: What Can a Foreign Buyer Do?
- English or Chinese: Which Version of Your China Contract Prevails?
- Signing a Contract with a Chinese Company: The Clauses That Decide Whether You Can Enforce It
This article is general information about PRC law as of 28 September 2026 and does not constitute legal advice. Tooling ownership and lien rights depend on the specific documents, payments, parties and dealings involved.