Custom Moulds and Tooling in China: Who Owns It, How to Protect It

If you're sourcing a product that requires injection moulding, die-casting, custom hardware tooling, or any other dedicated production setup, you're commissioning tooling that costs anywhere from $2,000 (simple plastic mould) to $80,000+ (complex multi-cavity precision tooling). That's real capital — and the mould or tool itself is a physical asset with material value.

The question every serious importer asks too late: who owns it?

This guide is the practical answer. Who owns the mould under Chinese law, what stops the factory using it for someone else, and how to actually protect both the tool and the design embodied in it.

The default ownership rule

Under Chinese commercial law, the party that paid for the tool owns it, unless the contract specifies otherwise. So if you paid the factory $15,000 for a custom plastic injection mould, you legally own that mould.

But ownership-on-paper is different from physical possession. The mould lives at the factory. Even though you legally own it, retrieving it requires the factory's cooperation. If the relationship sours, your "owned" mould can be very hard to actually move.

What a good ownership clause looks like

The order or supply agreement must explicitly state:

"All custom tooling, moulds, dies, fixtures, and dedicated production setups produced for this project ('Tooling') are the property of the Buyer from the moment of payment. Tooling shall be marked with the Buyer's name and project reference. The Supplier shall maintain the Tooling in working order, store it securely, and not use it for any party other than the Buyer. Upon written notice from the Buyer, the Supplier shall make Tooling available for collection within 30 days, at the Supplier's premises, in working condition."

That's the floor. Add: a separate Tooling fee invoice (so it's clearly accounted for as a buyer asset), the mould serial number on the invoice, and photographs of the mould with the buyer's name physically engraved or marked.

The clause has to be in writing in Chinese, on the supply contract. Verbal assurances or English-only clauses are weak.

The five things that protect you

A real protection stack has five layers:

1. NNN agreement — not an NDA

Western NDAs are largely unenforceable in China. Chinese courts typically don't accept foreign-jurisdiction NDAs and won't enforce them.

The Chinese-law equivalent is the NNN agreement: Non-disclosure, Non-use, Non-circumvention.

• Non-disclosure — supplier can't share your information with third parties
• Non-use — supplier can't use the information for their own products or other clients (this is the part Western NDAs typically miss)
• Non-circumvention — supplier can't bypass you to your customers

The NNN must be:

• Drafted by a Chinese-qualified lawyer who knows Chinese contract law
• Signed under Chinese law with Chinese jurisdiction
• Translated correctly — the Chinese version is what the court enforces, not your English version
• Specify damages, not just injunction (Chinese courts award concrete damages more readily than equitable relief)

Cost of a properly drafted NNN: $300–$1,500. Compared to the value of what you're protecting, trivial.

Sign the NNN before sharing any technical drawings, CAD files, or detailed specs. Once you've shared, the leverage is gone.

2. Chinese utility model patent

The single most underused IP tool. A utility model patent in China:

• Costs $200–$500 to file
• Issues in 6–10 months (much faster than invention patents)
• Provides 10 years of protection
• Has lower inventiveness threshold than an invention patent — useful for incremental design improvements

For any custom design that has a meaningful innovation, file a utility model patent in China before sourcing. The factory copying your design and selling it to your competitor stops being a hypothetical because they can be sued in China and lose.

For more sophisticated designs, also consider:

• Invention patent (3-year examination, 20-year protection) — for genuine novel inventions
• Design patent (similar to US design patent — 6 months to issue, 15 years) — for distinctive ornamental design

3. Disperse production across multiple suppliers

The strongest defence is structural: don't let any one factory have the full picture.

A typical disperse-production setup:

• Factory A machines the custom mould or master tool
• Factory B does injection moulding using the mould (sourced from A)
• Factory C does sub-assembly
• Factory D does final assembly + packaging

No factory in the chain has both your tooling and your full design. Copying becomes much harder because they'd need to reverse-engineer the parts they don't make.

This is overkill for low-IP products. For genuinely valuable designs (custom electronics, novel mechanical assemblies, bespoke industrial products), it's the standard.

4. Hold the mould physically — or at a third party

For really valuable tooling, after first production, take physical possession of the mould or store it at a third party.

Options:

• Ship the mould to your country. Stored in your warehouse. Used to negotiate with future Chinese factories ("I have the mould, you just run production"). Re-shipping the mould to a different factory is logistically painful but possible.
• Third-party mould storage in China. Specialist warehouses store moulds and ship them to whichever factory you contract for production. Protects against the original factory holding tooling hostage.
• Have the original factory ship the mould to a partner factory of yours. Document the transfer.

Storage costs are typically $20–$100/month per mould — trivial relative to the value protected.

5. Trademark registration in China

China is first-to-file for trademarks. If you don't register your mark in China, someone else can — and they can:

• Block your factories from manufacturing your branded product
• Force you to buy your trademark back at extortionate prices
• Sell their own products under your trademark in China

Trademark "squatting" is a known industry — there are entities that systematically register trademarks of foreign brands they discover sourcing from China.

Register your mark in China before you ship product, source product, or even hold meaningful conversations with Chinese factories about a branded product. Cost: $300–$800 per class. Time to issue: ~9 months.

For brands with multiple product lines, register in the relevant Nice Classification classes (class 9 for electronics, class 25 for apparel, class 30 for food, etc.).

What about the moulds the factory already made for someone else

A common cost-saver: factories propose using an existing mould (originally made for another client) for your order, with cosmetic changes (different logo, different colour). It's cheaper because there's no tooling cost.

The trap: the original mould is owned by another buyer. Using it for you is technically tooling theft — even though you didn't initiate it.

If a factory offers this:

• Ask explicitly: "Whose mould is this? Do you have the rights to use it for non-original buyers?"
• Get written confirmation that the mould is generic/factory-owned, not customer-specific.
• For any meaningful order, commission your own mould. The savings of $5,000–$15,000 on tooling isn't worth the risk of the original buyer suing.

Common ownership disputes — and what wins

Three patterns we see in actual disputes:

Dispute 1: factory uses your mould for a competitor. You discover identical product in another brand's listings. Win condition: tooling clause in the supply contract, evidence the competitor's product matches your spec, NNN agreement giving non-use protection. Without these documents, hard to win.

Dispute 2: factory holds mould hostage during a payment dispute. Common during normal business friction (payment terms, quality disputes). Win condition: physical mould possession (you ship it elsewhere), tooling clause confirming your ownership, supply contract that doesn't permit retention.

Dispute 3: factory destroys mould after relationship ends. Less common but happens. Win condition: explicit mould-preservation clause in the supply contract with damages for destruction, periodic mould-condition checks built into your QC.

In all three, the documentation upfront is what wins. After-the-fact arguments rarely prevail.

Worked example

A US consumer electronics brand commissioned a $24,000 die-cast aluminium housing mould for a Bluetooth speaker, contracted a Shenzhen factory for production. We:

1. Drafted an NNN agreement, signed under Chinese law, before sharing CAD files (cost: $800).
2. Filed a Chinese utility model patent on the housing's distinctive ventilation pattern (cost: $400).
3. Filed a Chinese design patent on the overall ornamental form (cost: $600).
4. Wrote a tooling clause into the supply contract: explicit Buyer ownership, factory storage at no charge for 5 years, mould marked with Buyer's name in casting.
5. Registered the brand name as a Chinese trademark in classes 9 and 35 (cost: $1,200).
6. After first production run (6,000 units), shipped the mould to a partner factory in Dongguan for second-source backup. Original Shenzhen factory continued primary production.

Total IP protection cost: ~$3,000. Mould value: $24,000. Brand value (after launch): considerably more.

Two years in, no IP issues. The supplier knows we have the patent, knows we have the trademark, knows we hold the mould rights — and continues to produce because the relationship is working.

What's overkill

Not every product needs the full stack. For low-margin commodity goods (basic mugs, basic textiles, basic accessories), a simpler approach is fine:

• Skip the utility model patent
• Use a generic NNN template (still drafted by Chinese lawyer, but not bespoke)
• Skip mould-shipping to your country (factory storage is fine)

The full stack is for products where:

• The design is distinctive and would be costly if copied
• The brand is the differentiator (not commodity pricing)
• Order volumes justify the protection cost

The bottom line

Custom tooling in China is owned by whoever paid for it — but only enforceably if the ownership is documented in the supply contract. NNN > Western NDA. Chinese utility model patent > nothing. Disperse production for high-IP items. Register your trademark in China before everything else.

Each layer is cheap relative to what's being protected. Skipping the protection layer to save a few hundred dollars is one of the most expensive false economies in importer fraud cases we see.

If you'd like our team to coordinate the IP protection stack for your next custom-tooled order, get a quote — IP setup is part of every private-label sourcing project we run.

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