Hello EN friends, I have a novelty product that I've developed over the last year. I have submitted a design patent in US and only a provisional utility patent which will expire soon. So I am considering the full utility patent using the same attorney that submitted my others.
Through the process the last year, I have been working with a Chinese company to source a manufacturer and to build a mold and finally my plastic product samples. I've been gaining traction on selling this item to potential customers in the US. Recently this company in China said they had shown my sample to their customers in China and they are interested in placing order, but they declined because it's my product. Since they have asked if I would create an agreement with them to sell in China.
Here's the big issue: my attorney says I should develop an agreement because they're probably going to sell it on their own anyway. He says we can protect against sales in the US, but cannot enforce or monitor their sales in China or internationally. I believe their customers are large resellers and so I have to believe that my product would have to be resold online. I can't imagine that my potential customers won't find my same product online for less than I can sell it, and so their sales will undercut my margins and opportunities.
My attorney has advised that in China their culture views inventions and ideas as public domain, and basically disregards patents and agreements.
I am considering an agreement that outlines the process for their direct sales which would include them funneling the new customers info into my online form and then being approved by me before purchase. I am also hoping I could require their customers to buy from me, to not sell online and to retail at the same US rates that we will be offering the product. I also need to establish a percentage that I'd receive from their sales.
So, it appears that I NEED to provide them with an agreement - that they may or may not abide by - while doing my best to protect my product. But I fear ANY agreement will open up the flood gates of them selling to anyone and at any price, either because they can't resist a large order and providing a discounted rate and/or the agreement that I provide to them is viewed as insufficient and unfair percentages or restrictive arrangements.
Does anyone here have experience with this type of situation? Any advice and feedback will help shape my agreement with them.