How to Protect Your Product and Mold Without Expensive Lawyers
So you have a product idea, you’ve finalized your product specification requirements, and you’ve successfully produced prototypes. As you begin communicating with suppliers, it hits you. You’re about to be sharing the intellectual property you’ve worked so hard to create with factories that could end up being your direct competitor. This is a scary moment, and for many inventors, you’ve already met with multiple attorneys, learning how they can help you patent and protect your brand.International patents and trademarks can be expensive and don’t always come with an enforcement guarantee. Meaning, just because you patent and trademark your products, does not indicate any would be counterfeiter is instantly going to jail, and you get to keep all their revenue. Getting anywhere close to an outcome that puts you in a better position than you were in before any lawsuit on copyright infringement is never guaranteed, and incredibly rare.
Does this mean I am telling you to stop working with attorneys regarding copyright infringement altogether? Absolutely not! However, what I would like to extend are helpful strategies you can use to enhance your intellectual property protection strategies.
In this guide, I will go over six unique tips that will help protect factories and Chinese con artists from stealing your product, because after all, during the sourcing stage, you’re practically giving away your treasure map.
First and foremost, before we go too deep into implementing potentially cumbersome strategies, it is essential for me to share my experience, having witnessed factories and Chinese companies steal products and resell them on Amazon. Never, in my decade of purchasing from China and five years living in China have I seen a factory take a buyers product specifications, turn those specifications into a product using the factories money, and proceed to market and sell the product overseas. Factories are not entrepreneurs with endless amounts of cash, only waiting for ideas so they can spend money developing and marketing the ideas.
Factories are known to find themselves in a very convenient situation where they hold control of the production of a product that already has an existing market and customers. When a factory finds themselves in this position, the chances that they will run an extra production and resell the counterfeit products on the same market as their clients drastically increase. So what does this mean for you, the buyer? If you plan on protecting your product from these opportunistic thieves, you need to recognize that protection is not done in the early stages of sharing specifications, instead, in the later stages after you’ve validated your product on the market.
Below is a list of six techniques you can use to ensure you minimize your risk of falling trap to the con artist factory and ensure your product survives attacks from opportunistic thieves.
For some reason I love this word, it always reminds me of action movies that have sophisticated criminals who run a tight operation where nobody knows each other, but they are still very successful in getting their job done. As you begin building your enterprise to get your products made in China, you have many choices as to how it can be done. One option, which is a successful strategy towards ensuring the fewest number of people in China have access to your finished product is to compartmentalize your production.
If your product consists of multiple components, materials, or even has unique packaging and branding, you can have each factory make their item, and then you can rely on an in-house assembly company to kit everything together. These companies may also be known as black box manufacturers, and depending on the company, can offer a service that ensures only a minimal number of individuals see your finished product, and even fewer can put the pieces together as to where each component came from.
2. Know Your Factory
Before working with any factory, it is a good idea to get to know them well. Here are a couple ways you can audit the factories you wish to work with to give you a better sense of whether or not they are a good fit for your production.
Approach them via various aliases to see how much information you can get regarding their existing clients. If you tease them into thinking you are a large buyer, are they willing to share more, such as confidential client lists?
Identify whether or not they sell B2C. An easy way to do this is to reverse image search every product photo they send you, to see if the same product can be found online. If the factory sends you samples, ask for examples of packaging too, to get an idea who their clients are, or if they have a brand. - Ideally, you’ll want the factory to identify the importance of keeping their buyers confidential. If all else fails, ask them if they are selling online.
Audit them by using a factory audit company, and ask the auditor to focus on finding out the markets the factory sells to.
Hire an expat or a western sourcing company to visit the factory and pose as a buyer, while auditing them. The inspection should focus on identifying where the factory keeps molds that are not being used, and what sensitive brand information is easily accessible for anyone who visits the factory.
3. Use a Third-Party Mold House
Factories will frequently offer to create your intended product mold first, and then produce the product. While this is often more convenient, you may find weighing the costs involved with hiring a third-party facility to create the mold and ship it to the factory to play to your favor. By doing this, your factory does not need to have control over the 3D drawings that were used to create the mold, and they won’t have inside knowledge as to how the mold was created.
4. Third Party Mold Storage
What is more enticing than a factory finding out they are making a viral widget? Having the mold to create more of the same widgets sitting on their shelves with their buyer thousands of miles away. When your factory is finished with your production run, what do you think happens to the mold? It goes on a shelf, next to other molds, waiting for its next use. This creates an opportunity with few restrictions for anyone with access to set the mold up and start an unauthorized production run.
To prevent this from happening, you can employ a third party to store your mold when it is not in use. This third party can arrange for the mold to be to be delivered to their secure storage facility between productions.
5. 50 Pound Chain & Padlock
An alternative to storing your mold off site is to hire someone to visit your factory with a lock and chain and lock your mold from opening. While it is not as secure as offsite storage, it is an option. Just be forewarned, any locksmith could easily unlock your chain and you would be none the wiser.
6. Integrate Your Brand Into The Mold
By adding a small logo or brand identifier in a discrete location of your mold, you accomplish two things. The first, if counterfeit units are found, you can use that identifier mark to determine if a counterfeit mold was made or if your mold us being used without your permission. With this information, you may be able to identify the culprit, and potentially hold your factory responsible. This method also helps in ensuring your factory is not using your mold with other clients or orders that may be relabeling your product design.
When it comes to operating in China, vigilance is key. Never rely on a single strategy to protect yourself. While these tips listed above may save your company from some attacks, they don’t prevent against all. As you grow your products and your brand, adapt to your environment and be ready to fight to keep your image alive. In the e-commerce environment, it is easier than ever to copy a generic product and sell it on a validated market.
The businesses that are thriving are the ones that are focusing on product improvements and making items better, not filling the internet with more junk. With that being said, the more generic your product, the more you open yourself up to competition. The more custom your product is, the better chances you have of a longer runway before someone shows up with a copy or counterfeit.
Stay strong, and never stop improving!