IP, short for intellectual property, refers to the intangible creations of the human intellect. In the case of an ODM (original design manufacturer) company, products created or built by the research & development department fall to the IP category.
Why is protecting IP important?
The intangible nature of intellectual property makes it easy to steal and copy, rendering the hard work of the research and development going down the drain. It takes substantial funds for the R&D department to update the manufacturing process and the product. Without proper protection, the time and efforts invested would help your competitor win the competitive edge, not you, since they can just skip the R&D process and go straight ahead to winning bids and sales proposals.
It’s not uncommon that you need to mass produce your product overseas in countries like China and India, where you find a product similar to yours coming to the market months ahead of yours, at a much lower price. This is the risk you may take when you don’t register your product as an IP.
In fact, IP theft has proven to be so lucrative that it can be seen everywhere in the manufacturing process: from product plans to trade secrets. This is also why protecting IP is so important.
How to protect IP in manufacturing?
That being said, what can you do to fully protect the IP in manufacturing? Here are some of the most commonly seen methods that you can consider. Tailor your solutions according to your needs. And if you have any question regarding intellectual property, feel free to reach out, and we’d be glad to help.
1) Register your IP
Before registering the IP of your products or ideas, you need to make sure that:
- You’re not reproducing any design;
- You’re not infringe an copyright;
- No other product of the same kind have the same trademark registered, including home products and that from overseas;
- File as fast as you can since the patent could take up to 5 years to issue.
If you plan to mass produce or sell your products overseas, be sure to check the local IP rights, since the IP rights are geographically limited.
2) Create Strong Non-disclosure Agreements
It’s highly unlikely that you can build the product with absolutely no outside help. That said, you need to sign non-disclosure agreements (NDA) with many potential partners. Be sure to include a strong clause on IP rights in them stating that your organization owns the IP.
It’s also important that the other contracts, such as employment, sales and consultancy contracts, clearly state the ownership of the intellectual property.
If you need, consider hiring a professional attorney to create well-written non-disclosure agreements and other company contracts.
3) Don’t split the ownership of the IP
Joint ownership is usually decided by your side, but it creates more problems than it fixes. The more parties involved, the more difficult to protect the intellectual property.
4) Separate teams
You can choose to separate your engineering teams in different regions and areas, or keep the core team such as the R&D team close and only source the manufacturing team overseas. In this way, you have more control over the intellectual property, and you can make sure that no party has full access to the complete product.
5) Choose suppliers wisely
If your organization is not big enough to have an oversea officer, it’s also worth considering to share the BOM (bill of materials), 3D files, Gerber files, source codes etc. with different suppliers.
In addition, you can choose to work with suppliers that have never built products similar to yours before. The disadvantages are: it takes time for the supplier to get familiar with the project, and some might not consider expanding their business. But you can be sure that they won’t steal your IP, since it’s of no use to them.
That concludes what you can do to when it comes to protecting the intellectual property of your products. Should you have any concern or question about IP, feel free to leave a comment, and we’d be glad to answer.
