When a US company hires a Chinese manufacturer to make goods, the US company will frequently give the Chinese manufacturer the molds that are needed to make the good. However, problems can arise when the US company wants the molds back. The reasons for wanting the molds back can vary, such as wanting to use a new manufacturer. One of the major issues that can arise is that the Chinese manufacturer might not want to give the molds back. So what can the US company do in this situation?
The best way to handle this situation is to not get into it in the first place. This may seem obvious, but it is important to remember to make a good contract first so that this situation never happens. A good contract that could prevent your molds from being taken will make taking your molds too expensive for the Chinese manufacturer.
In order to do this, have your Chinese manufacturer sign a contract that makes it very clear that the molds belong to the US company. The contract should also be written in Chinese. This will make it more easily enforceable in a Chinese court. Typically, a Chinese court does not like to enforce contracts that are not written in Chinese. So before anything else, have this contract written in Chinese that says very clearly that the US company owns the molds, not the Chinese manufacturer.
In addition, there should be a penalty if the molds are not returned or if they are not returned on time. This kind of stipulation might make a Chinese manufacturer think twice before trying to take the molds. Even better, the contract should require a deposit in order to have the loans given to the Chinese manufacturer in the first place.
The key is that the contract has to make taking the molds not worth the price. A Chinese manufacturer is usually trying to take the molds either out of revenge for not buying from them anymore. Another reason could be that the Chinese manufacturer wants to start making the product itself. But with the kind of contract described above, it is much less likely to have the molds taken. And even if the molds are taken, the US company will have a contract that describes how they own the molds very clearly and the contract will be enforceable in a Chinese court because it is written in Chinese. Best of luck!