China NNN Agreements: What to do After You Get one Signed

How to keep a China trade secret secret.

Foreign companies often contact the international litigators at my law firm for help when a Chinese company has “violated our Non Disclosure Agreement (NDA).” Nine times out of ten, their NDA is not worth the paper on which it has been printed and we tell them that we cannot help them. For why this is so often the case, check out China NNN Agreements: What You Need to Know and China NNN Agreements Up Close.

We seldom can help in the other one out of ten situations either because the foreign company usually has failed to act in accordance with its own NDA or NNN Agreement. I thought about this the other day when I received a fairly standard email we send to our clients for whom we have drafted an NNN Agreement. In this email, attached to which we provide our NNN Agreement (in Chinese as the official version and in English for our client) and an Acknowledgment of Receipt for the confidential information, we also remind them of the need to abide by the NNN agreement. Abiding by the agreement in most cases means being clear to the Chinese company about what information is confidential and making sure to maintain the confidentiality of that information with everyone who has not signed an NNN Agreement. Here is that email:

For your review, attached please find the China NNN Agreement you requested, along with a separate Acknowledgment of Receipt to track the confidential information you send. Both documents are fully translated into Chinese.

Note that executing this agreement is just the first step in protecting your IP. It is also important for everyone on your team to act in accordance with this NNN agreement. If you share confidential information with a Chinese entity, make sure you mark that information as confidential, keep track of it, and take measures to ensure it will remain confidential.

The above are some pretty basic rules for NNN Agreements and confidentiality, but far too few actually follow them.

One response to “China NNN Agreements: What to do After You Get one Signed”

  1. My take on this is that your average Chinese person is far more tricky and dishonest than most foreigners could ever imagine. This is endemic to their traditional, highly competitive culture. Just one or two deceptive Chinese characters hidden in a formal written contract can nullify that contract. So to place the onus of responsibility for ensuring that important data will remain confidential on a client without emphasizing the need for ongoing, expert Chinese assistance would be like asking a babysitter to guard your large purchase of gold coins as it is hand carried from an auction house to your bank vault.

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