Defining “competitor” when drafting an NNN agreement in China

In a recent blog post we explained why the NDA does not offer enough protection when buying from China.

A key element of a robust NNN is wording that prohibits the supplier from doing business with the buyer’s competitors.
Sometimes the suppliers are hesitant to sign the non-competition clauses of the NNN if it is too open-ended, especially when there is a penalty clause in place for breaking the contract. The supplier may raise the following legitimate concerns

• How will we know who are your competitors?
• Do you mean we can’t do business with your competitors on any products or just the part numbers we sell to you?

Each case is unique, but an attorney with solid China experience may solve the situation in multiple ways: 

• Explain “competitor” is related to only those companies (present or future) that deal in a very specific product.  Rather than any competitor that competes with you in any product line.
• Incorporate product details into the contract by using samples, images, uses, part numbers, patents and other means so that the product in question is very well defined.
• Simply make a list of competitors you don’t want the supplier to deal with regardless of which product lines are involved.

Reference: 
NDA vs. NNN