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Timothy D. Smith
Timothy D. Smith, Attorney
Category: Legal
Satisfied Customers: 1981
Experience:  10 years practicing IP law and general litigation
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Hello, I am a sourcing agent based in Hong Kong and I have

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Hello, I am a sourcing agent based in Hong Kong and I have been asked by a US company to find a supplier for some electronic equipment. I need to disclose the US company's confidential information to potential suppliers in order to obtain quotes and so need to put in place an NDA between the US company and potential suppliers first. In doing so, the US company will become aware of the potential suppliers, so I want to put in place a contract with the US company so that any future business through the suppliers I have identified is carried out through my business and not directly with the suppliers. Can I do this?
Submitted: 1 year ago.
Category: Legal
Expert:  Timothy D. Smith replied 1 year ago.
I hope this message finds you well. There are two issues that I need to address relative to your question. First of, I am a USPTO registered patent attorney and deal in intellectual property licensing in the US and abroad as well as contract law for personal service. As such, this situation is not new to me and I hope to provide you with very satisfactory information.

This first issue I want to address out of an abundance of caution and because it has bearing down the line. As you know, piracy of ideas is a major problem in Asia - China in particular. As such, you need a strong non-disclosure agreement that is pre-approved and perhaps even an attachment to the contract you sign with the US based companies. Even with the NDA, piracy is possibility, therefore the US companies should attempt to obtain, if they have not already, IP protection in the US to at least prevent importation of pirated goods into the US.

As to the second issue, you can contract with US based companies to essentially be a middle man as a reward for your services and for functioning as a Asia based liaison on behalf of the companies as issues may arise. In fact, the later part is the hook that generally makes companies desire your service and willing to sign an exclusivity agreement with you in the process.

Within that contract, you want to also address and limit any liability you may have for their confidential information being exposed or pirated. You want to address through contract language that they are responsible for their own IP protection over and above the NDA you will have companies sign through their own intellectual property protective measures.

So, the answer is that you can contract to limit the companies and make them work through you. You can place penalty provisions in the contract to benefit you if they violate the terms of the contract. You may want to make the applicable law as to contract disputes be in California, so as to stay away from Asian courts.

You need to get pre-approval for the NDA you will use and you need to be willing to work in handling issues after actually setting up an agreement between the US companies and suppliers.

Let me know if you have any other questions or comments. I want to assure you are comfortable going forward.

Best wishes going forward.
Customer: replied 1 year ago.

Hi Timothy,


 


Thanks for your e-mail, in answer to your questions, the US company has full IP protection and yes I am willing to handle any issues that arise with


the Asian supplier.


 


To clarify, the NDA that will be put in place with the Asian suppliers is the US company's NDA and so obviously has their full approval.


 


I do have some further questions:


- Should I contract the suppliers or the US company to work solely through me, or both?


- What is reasonable to put in that contract regarding future business between the US company and the supplier, i.e. can I also stipulate that it must be done through me?


- Should the contract have an agreed term? What happens at the end of the term?


- Do you have any draft agreements that I could use as a basis for the contract?


 


I look forward to your response


Kind regards


Lydia


 


 


 


 


 

Expert:  Timothy D. Smith replied 1 year ago.
As to the first question, you at a minimum need to contract with the US company because they will be easier to address legally down the line due to a better court system. They are the only must...contracting with the Asian based supplier is sort of a luxury, but certainly an avenue worth pursuing. In short, I would not waste my efforts on this project unless the US company agrees to use you after the contact has been set up.

As to the second, you can stipulate that you be used as a liaison on all business conducted between the parties that is over and above nominal, normal service issues and the like. Any future business arrangements between the parties need to be conducted through you. You could place a time limit on the effectiveness of the contract, like all future business arrangements for the next 5-10 years, to help coax the issue.

As to the third, as stated above, you can have an agreed term. At the end of the term you want to reserve the right to continue the business. Basically, you want to have an opportunity for the business (not necessarily a right of first refusal) but a pledge of consideration on the part of the party or parties.

I don't have any draft agreements that I would feel very comfortable sending over to you without oversight. These agreements I have a custom generated for previous clients that paid a pretty substantial price for the service and whom I continue to work with on projects. Out of a sense of obligation to them, I would feel bad about forwarding them along.

That said, there are websites such as USlegalforms.com that have some really good fillable legal forms that will be on point or close to on point. I will be more than happy to help you in this process if you want to cut and paste in the future. I can add or take away language, etc.






Timothy D. Smith, Attorney
Category: Legal
Satisfied Customers: 1981
Experience: 10 years practicing IP law and general litigation
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