Bailments / Molds / Tools in China; Michael Sylvester

worker.jpgA common tooling arrangement with a Chinese manufacturer outlines that a fixed number of production runs or units are required before the tooling is returned to you.   Sound familiar? 

If you have ever engaged in such an arrangement, you gave away your designs by approving the contract.  Here in China, a factory draws you in by offering to front the tooling costs to be returned to you after a certain time / production run period.  But, by doing so you have confirmed their ownership in perpetuity of both the tooling and the underlying design embedded in that tooling.  And because you gave your design away, you will never have a legally enforceable right to get it back.  I know there are varying opinions on this subject and if you want to pay someone a thousand dollars an hour to fight that fight for you, go ahead.  It will not work, but if it makes you feel better to buy your lawyer another yacht, so be it.  It is your money.

So, rather than get involved in that kind of silliness, we undertake a bailment agreement instead.

If you have ever parked your car in a paid parking garage, you have used a bailment.   In short, it says that I recognize that it is your property and so long as you pay the agreed fee, I have an absolute obligation to give you your property back.  Why would you risk your tools and the designs embedded in them when such a readily accepted solution is available?

Over the years we have done this hundreds of times.  In fact, in situations where a factory has refused, we simply call the police and they recover your property for you – at their expense.

There are rules in China and if you follow them the Police and Customs work for you, as part of their public duties, just as they do in your home country.