Paying for a mould and owning a mould are different things, and the difference only becomes visible at the moment you want to move production elsewhere.
What tooling means here
Injection moulds, die-casting dies, stamping tools, extrusion dies, silicone moulds, printing plates and cutting dies. Anything made specifically for your product that the factory would not otherwise have.
The cost varies enormously — a simple cutting die is inexpensive, a multi-cavity injection mould in hardened steel is a substantial capital item — but the ownership questions are the same in every case.
Three arrangements
Buyer pays in full, buyer owns. The buyer pays the tooling cost, and the contract states that the buyer owns the tool and may take possession. Highest upfront cost, maximum flexibility.
Buyer pays in full, factory holds. The most common arrangement in practice, and the one that causes the disputes. The buyer pays, but nothing in writing says who owns the tool or under what circumstances it can be moved. When the relationship ends, the tool is in the factory's building.
Factory pays, amortised into unit price. No upfront cost; the tooling is recovered across a committed volume. Clean if the volume happens. If it does not, the factory has an unrecovered cost and will resist releasing the tool.
Possession is what actually decides outcomes
A contract saying "the buyer owns the mould" is worth having, but the tool is a physical object bolted into a machine in a factory in another country. Enforcing ownership against an unwilling holder means litigation in that jurisdiction, which for most tooling costs more than the tool.
The practical consequence: treat tooling ownership as a commercial arrangement to be structured, not as a legal right to be asserted later. Three things that make ownership real rather than nominal:
- A tooling agreement signed at the time of payment, not referenced vaguely in a purchase order. It should name the tool, state ownership, and state the conditions under which it is released.
- Photographic record of the tool with any identification number, taken at the factory. Tools without identifying marks are hard to specify in a later demand.
- An agreed release process — what notice is required, who pays for removal and shipping, and what outstanding obligations must be settled first.
Maintenance and life
Tools wear. An injection mould has a rated life in shots, and as it approaches that figure parts drift out of tolerance and flash appears at parting lines. Two questions worth settling upfront:
Who maintains it, and at whose cost? Routine maintenance is normally the factory's responsibility as part of production. Refurbishment near end of life is a larger cost and should be allocated explicitly.
What happens at end of life? A replacement tool is a new capital cost. If the original was amortised into unit price, the replacement usually is too — but this should be agreed rather than discovered.
Asking for the tool's shot count periodically is reasonable and tells you when to plan for this.
Protecting the design
Tooling embodies your design, and a factory holding your tool can in principle run it for someone else. Practical protections, in rough order of effectiveness:
- Split the tooling across suppliers where the product allows it. No single factory then holds the complete product.
- Keep a distinctive element separate — branding, a specific finish, a component made elsewhere — so an unauthorised copy is identifiable.
- Register the design in China as well as in your own market. Enforcement against a Chinese factory is far more practical with a Chinese registration, and this is frequently overlooked.
- Written agreement that the tool is exclusive to your product, with a defined consequence.
Non-disclosure agreements alone are weak protection for physical tooling — the tool exists regardless of what was agreed about information. The registration point is the one that does the most work.
Before paying a tooling invoice
- Is the tooling cost separated from the sample cost and from the unit price?
- Does a signed document state who owns the tool?
- Is there an agreed process and cost for releasing it?
- Is the tool identified specifically enough to be demanded — a number, a photograph, a cavity count?
- Is the design registered in the country where the tool sits?