What Is A Nnn Agreement
Find out what the NNN Treaty clauses mean and how they compare to a non-disclosure agreement: The above illustrates the general approach our Chinese lawyers take when drafting an agreement with China. We don`t want our clients to have to plead, but in order to reduce the likelihood of having to go to court, it is important that the Chinese side believes that it would be relatively easy for you to sue and prevail. This is exactly what the appropriate NNN agreements do for China. Although China respects a foreign choice of law in an agreement, it will still apply Chinese civil procedure law. NDA agreements focus on the protection of trade secrets. For a trade secret to be a protectable asset, the information must remain secret. For this reason, NDA agreements are designed to prevent the disclosure of a trade secret to the public. NDA agreements therefore focus closely on preventing the leakage of secret information to the public. Since U.S. companies have generally focused on maintaining their national IP portfolio, they naturally tend to believe that they can rely on a single NDA agreement written in English, governed by U.S. law and enforceable exclusively in a U.S. city and state.
But for the following two reasons, this type of NDA is worthless in China. An NNN agreement is a document to be interpreted and applied in the People`s Republic of China. This means that regardless of the country in which your company is based, you can use this NNN agreement to protect your idea in China. The NNN Agreement contains not only confidentiality provisions, but also provisions prohibiting a Chinese manufacturer from misusing confidential information it has received as a result of its employment relationship with you. Even if you have a strong NNN agreement, you should still use it as a best practice to mark all your proprietary and confidential information as “CONFIDENTIAL”. If Chinese manufacturers can copy cars like Tesla, their website, etc., what prevents them from copying your gadget or IP address, which may still be in its infancy? An NNN agreement must contain a specific contractual damages settlement that a Chinese court can and will enforce by ordering the confiscation of the defendant`s assets. However, caution is advised, as china`s legal system does not allow punitive damages or significant indirect damages. It is therefore important to add the contractual damage to an amount that adequately compensates the damage resulting from a breach of contract.
You need a China-centric NNN agreement to protect your intellectual property in China. The three “N`s” that make up a Chinese NNN agreement are: non-use, secrecy and non-circumvention. Look at each one at once. Unfortunately, not everyone uses the Chinese lawyers in my firm for their NNN deals and I say this for reasons other than our inability to collect the fees. .