An NNN agreement (non-disclosure, non-use, non-circumvention) is the right tool for protecting a product you have a Chinese factory make. But it only works if it is written for enforcement in China: in Chinese, governed by Chinese law, with a Chinese court that can act against the factory, and with damages a Chinese judge will actually award. An English NDA governed by a foreign law and enforceable only in a foreign court is, in most cases, a document the factory has no reason to fear.
"Do we need an NDA before we send the drawings?" Yes, but an NDA is the wrong way to think about it. Start with what you are actually worried about. Very few factories leak drawings to the world at large. The real risks are that the factory uses your design to make the same product for others, sells directly to your customers, or registers your brand or design in China before you do. A good NNN agreement is built around those three risks, not around confidentiality in the abstract.
What a Western NDA misses
A typical NDA prohibits disclosure of confidential information. The factory, however, does not need to disclose anything to hurt you. It can simply make your product on its own account, sell to your distributor at a lower price, or work with a competitor who brings it the same specification. "Non-use" addresses the first problem and "non-circumvention" the second. The third, a competitor arriving with your design, is handled by defining your product, tooling and specifications clearly so that making them for anyone else is itself a breach.
The other gap is enforcement. If the agreement is governed by New York or English law and requires litigation abroad, you would have to win a foreign judgment and then ask a Chinese court to recognise it before touching the factory's assets. Most brand owners never get that far. A Chinese court at the factory's location can hear the case directly, order preservation to stop infringing production, and enforce against the factory's assets in the same system.
What makes an NNN agreement work in China
Write it in Chinese, and make the Chinese version prevail. A Chinese judge will read Chinese. If you also want an English version, make it a translation and say so. See our note on bilingual contracts.
Choose PRC law and the court where the factory is located. This is counter-intuitive for many foreign companies, but it is what makes the agreement a credible threat. Arbitration in mainland China is also workable; arbitration outside mainland China and Hong Kong loses the ability to obtain early preservation orders against the factory.
Name the right company. Use the factory's full registered Chinese name and unified social credit code, and have it sealed with the company chop. Many factories operate through several related entities; if the one you sign with is not the one making your product, cover the affiliates expressly.
Define the product precisely. Attach or reference drawings, specifications, part numbers, molds and packaging, and prohibit the factory from making products that are the same or substantially similar for anyone else. Vague references to "Confidential Information" invite argument about what was covered.
Set liquidated damages you can defend. Chinese courts enforce agreed damages but may reduce an amount that is excessive; as a general rule, damages more than 30% above the actual loss can be treated as excessive. A figure linked to something concrete, such as a multiple of the order value or of the unit margin on infringing sales, is far more likely to be upheld than an arbitrary USD 1 million.
Deal with brands and designs as well. Include an undertaking that the factory will not apply to register your trademarks, Chinese brand names, designs or patents, and will transfer anything it does register. That undertaking helps, but it is no substitute for filing yourself.
What Chinese trade secret law adds, and its limits
Beyond the contract, technical and business information can be protected as a trade secret under the Anti-Unfair Competition Law if it is not publicly known, has commercial value, and is subject to reasonable confidentiality measures. Once the owner shows it took such measures and gives preliminary evidence of misappropriation, the burden shifts to the defendant to show that it did not infringe. Damages can include punitive damages of up to five times the base amount for intentional, serious infringement, and statutory damages of up to RMB 5 million where losses are hard to prove.
Chinese courts have become willing to award substantial sums. In 2024 the Supreme People's Court ordered WM Motor and related parties to pay Geely about RMB 640 million for misappropriating technical secrets, the largest award of its kind to date; in the earlier vanillin case it awarded about RMB 159 million. Serious misappropriation can also be criminal: under the 2025 judicial interpretation, losses or illegal gains of RMB 300,000 or more generally meet the threshold for prosecution.
The limit is proof. Trade secret claims fail most often because the owner cannot show what the secret was or that it was actually kept secret. Mark drawings as confidential, share them on a need-to-know basis, split sensitive components across suppliers where practical, and keep a record of what was sent to whom and when. The NNN agreement is itself one of those reasonable measures, which is another reason to have it signed before, not after, the first drawings are sent.
Our view
Sign a China-specific NNN agreement before sharing anything that matters, register your trademarks, Chinese brand name and key designs in China at the same time, and keep a disciplined record of what you share. What we would not recommend is signing the factory's own confidentiality template, relying on an English NDA with foreign court jurisdiction, or setting an enormous liquidated damages figure in the hope of intimidating the factory. The first two will not help you when it matters, and the third is likely to be cut down by the court.
Frequently asked questions
- What is the difference between an NDA and an NNN agreement in China? An NDA stops disclosure. An NNN agreement also stops the factory from using your design for itself or others and from going around you to your customers, which are the more common risks in Chinese manufacturing.
- Is an NNN agreement enforceable in China? Yes, if it is drafted for China: Chinese language, PRC law, jurisdiction of a Chinese court or mainland arbitration, the correct factory entity and a defensible damages clause.
- Should the NNN agreement be governed by US or UK law? Generally not, if the factory and its assets are in China. A foreign-law, foreign-court NDA is hard to enforce against a Chinese factory.
- Does an NNN agreement protect my trademark or design? Only partly. It can prohibit the factory from registering them, but you still need your own registrations in China for full protection.
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Protect the product before the first drawing is sent.
We draft China-specific NNN and manufacturing agreements in Chinese and English, coordinate trademark and design filings, and act when a factory copies, sells around you or misuses your technology.
Related Reading
- Chinese Factory Won't Return Your Molds? Tooling Ownership and How to Get It Back
- Counterfeits of Your Brand on Chinese E-commerce Platforms: Takedown, Raid or Lawsuit?
- Someone Registered My Trademark in China: What Can I Do?
This article is general information about PRC law as of 28 September 2026 and does not constitute legal advice. The protection available depends on the information involved, the confidentiality measures taken, the contract terms and the evidence.