Expert: John Dong - 4/8/2008

Question
QUESTION: I have made purchases of semiprecious beads from several vendors in China.  I have one vendor performing some carvings for me that I intend to launch a business from.  Are there any legalities that I need to be aware of?  Is there any way to protect my idea that I provide to the vendor to carve?  Meaning can I keep the vendor from duplicating the carvings and selling them?
Any advice and/or suggestions?

ANSWER: Dear Kathy,

Glad to answer you question.

To import semiprecious beads from China is no need much more legal or administrative procedures. It's common international business.

If you want protect your design of carve keep from duplicating, there are several ways besides your business measures.

1.Insert Intellectual Propect Rights, Representations and Warranties, Breach of Contract Clause to your contract and orders;

2. Apply for industrial design patent, design copyright in China;

3. Investigate commercial goodwill of your vendors.

best regards.

---------- FOLLOW-UP ----------

QUESTION: Thank you so much for your reply. I provide a sample and they carve from that.  They presently do not charge me for carving but for the order I place after the carving. I don't want to damage what is so far a good relationship. A few more questions:
1) I have asked the companies intentions with my carvings and the only answer I received was it would be a win win for both companies.  How do find out if they have intentions to sell my carvings? are you saying if they have 'goodwill' they will not do that?
2) If I introduce the 'legal verbiage' now (i.e. Intellectual Propect Rights, etc.) will the vendor take offense? If I decide to include a clause in my order can you advise where I can find samples of the your recommendations in #1.
3)based on the sample I provide them, I don't think I can claim an industrial design patent.....
4)What exactly is commercial goodwill and where can I go to investigate that?
Best Regards!

Answer
Dear Kathy,

1) I have asked the companies intentions with my carvings and the only answer I received was it would be a win win for both companies.  How do find out if they have intentions to sell my carvings? are you saying if they have 'goodwill' they will not do that?
No one can assure the vendor will or won't infringe your design. If you worry about your Intellectual Property, the better way is show them if they infringe, there will be a hard tort liability.

2) If I introduce the 'legal verbiage' now (i.e. Intellectual Propect Rights, etc.) will the vendor take offense? If I decide to include a clause in my order can you advise where I can find samples of the your recommendations in #1.
That is the normal business ways. You can get it from your lawyer. Or we can provide legal service to our clients, but it is charge service.

3)based on the sample I provide them, I don't think I can claim an industrial design patent.....
It's decided by what the sample is like, and whether it worth to do that.

4)What exactly is commercial goodwill and where can I go to investigate that?
We can provide Chinese enterprise registration information to client.

best regards.