Unless a written contract says otherwise, Chinese law lets the factory that develops your product apply for the patents, keep the copyright in its drawings and code, and reuse the know-how. I help overseas buyers put ownership, file handover, NRE and exit terms into an enforceable bilingual development agreement before the first prototype is built.
China-licensed lawyer · Bilingual practice · Shenzhen
We map what you bring (drawings, brand, patents, a working sample), what the factory will engineer, and whether it starts from its own platform. We also go through what has already been sent, promised or paid, including any “free” development offer.
We verify the supplier’s registered Chinese entity and court records, and whether the engineering is done in-house or subcontracted. We search its existing Chinese patents in your product category: a factory that already holds a utility model on the platform will claim your product sits on it.
We list every output of the project — CAD, PCB and Gerber files, BOM, firmware source, test data, mold drawings — and decide who owns each and when it is handed over. The factory’s background technology is separated from the custom work you pay for.
We lock down the stage gates, the acceptance tests and what triggers each payment. If the factory waives NRE against production, we price that trade in writing: the volume commitment, the exclusivity window and the buy-out price for the files if you walk away.
I draft your bilingual development agreement under Chinese law, with a tooling annex where molds are cut during development. When the factory asks for joint ownership or open-ended exclusivity, I explain what each concession costs and where you can safely give ground.
I check the signed agreement, company seal and signing authority, then give your team a per-milestone handover checklist and a China patent-filing plan, so disclosure and first-to-file are sequenced correctly.
Negotiate ownership, deliverables and money once, before engineering starts. Then sign off each milestone with a one-page acceptance record that lists exactly which files and prototypes you received.
Without stage records, “the product is done” becomes an argument at the moment you owe the last payment and the factory holds every native file. A milestone trail settles what was delivered and what is still owed.
The master contract: assignment of patents, copyright and technical secrets, the deliverables list, NRE and milestone payments, failure and exit rules, and your right to manufacture elsewhere.
A repeatable sign-off for each stage — what was tested, what passed, which files and samples changed hands. It fixes the state of the project before the next payment goes out.
Turn “we can develop that for you” into obligations that survive the switch from prototype to production.
Who owns what the factory creates?
What exactly must be handed over, and when?
When is development “done”, and what are you paying for?
What if it doesn’t work, or you decide to stop?
Are you locked into this factory once the product works?
Default rules cited above: Civil Code, Chapter 20 (technology contracts), Articles 851–861 · Patent Law, Articles 8–9 · Copyright Law, Article 19
Free engineering is paid for elsewhere: in exclusivity, minimum volumes, unit price or ownership of the result. Send me the quotation, the chat history and whatever has been shared so far. We will find what can still be fixed before the first prototype is approved.
Yes. An NNN controls what the factory may do with the information you disclose. It says nothing about who owns what the factory creates, what it must hand over, or what you owe if the project stops. Under Chinese law those questions default in the developer’s favour unless a written contract answers them.
Yes, if the contract says so. The Civil Code and the Patent Law let the parties agree who holds the right to apply for patents on commissioned development, and the Copyright Law does the same for commissioned drawings and code. The assignment must reach the factory’s engineers and subcontractors, and should be paired with your own Chinese filings, because China grants patents to whoever files first.
The factory expects to recover its cost through production, and without a contract it owns the result by default, so it sets the production terms. Write the exchange down: what NRE is waived, what volume or exclusivity you commit to, and what you pay for the files if you never reach it. A free development that ends with the factory holding every native file is the most expensive version.
Not the platform. Separate the factory’s background technology from the customisation you pay for. You own the custom layer, and you take either a licence to the base wide enough to manufacture elsewhere, or an exclusivity window during which the factory may not sell the customised product to anyone else.
Chinese law leaves the risk of technical failure to the contract, and lets a client stop commissioned work at any time against compensation. The agreement should fix what you pay at each exit point and what you receive regardless: all files to date, prototypes and any tooling. Without that, the factory may withhold the work until its claimed losses are paid.
No. The development agreement ends at final acceptance and handover. Production pricing, quality standards, delivery and reorders belong in a manufacturing agreement, drafted once the product is proven. I plan the transition so tooling ownership and confidentiality carry across; the two documents are scoped and quoted separately.
I am Kelly Zhang, a China-licensed attorney at JT&N in Shenzhen. Prior to private practice, I spent seven years at CIETAC administering over 400 complex commercial arbitration disputes.
That institutional experience informs every development agreement I draft: ownership must be assigned in words a Chinese tribunal will enforce, deliverables must be provable, and exit terms must leave you holding your own files.
More about Kelly →Tell me where the project stands with your factory. We will put ownership, handover and exit terms in writing before more money and files go out.
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