An Exclusivity Agreement grants a company with the right to be the only importer and seller of certain products.
The purpose is to prevent other buyers from importing the same product, and compete with the buyer on their home turf. Or, prevent the supplier from doing the same thing.
In this article, I will explain how such contracts work, and why they rarely make sense for most businesses looking to import products from China.
1. Does the Manufacturer even own the product design and IP?
Most suppliers are not actively developing new and unique product designs. Many factories have their own brands these days, mainly for the purpose of selling on Taobao or Tmall.
However, in most cases, such products are relatively generic, and largely based on their customers OEM designs. Most suppliers simply don’t have any Intellectual Property to speak of, and therefore, an Exclusivity agreement is a non-starter.
If you intend to buy a private label product, or create your own OEM product, an exclusivity contract is also irrelevant.
Keep in mind that not any product can be patented or protected. In order to patent or protect a product, the following criteria must be fulfilled:
a. The product design must be new
b. The product design must be unique
c. The product must have a new and unique function Continue Reading →