Offshoring for Manufacturers: 4 Intellectual Property Protection Tips
The upside of offshoring manufacturing is obvious. You get a competitive rate for labor, create greater efficiency, scale faster, and get the chance to focus on the most critical parts of your business.
But what about the potential downside? Poor quality, long lead times, and failure to deliver are all concerns for manufacturers. The most frightening prospect is having your intellectual property fall into the wrong hands. If that happens, your competitive advantage goes out the window—and you may never get it back.
For products with multiple proprietary components, consider dividing the contract among two or more manufacturers.
Four Ways to Reduce IP Risk During Outsourcing
At TFG USA, our goal is to deliver all the upside and none of the downside of offshoring. In that spirit, here are a few smart ways for manufacturers to reduce risk in the outsourcing process:
- Identify and document all IP associated with an outsourcing contract. This includes your own proprietary designs or trade secrets as well as IP belonging to third parties. Also, consider ways the designs or components might be incrementally improved—and register your IP rights for those ideas as well.
- Maintain control of production for critical and proprietary components onshore (or in-house) when possible. Offshore those pieces that can’t be reverse engineered or that are low risk in terms of IP. Don’t provide more information than necessary for offshore manufacturers to get the job done.
- Consider adding tracer parts to products with multiple components. These parts serve one purpose: Making it possible to identify when a design was copied by another manufacturer—and being able to prove it.
- For products with multiple proprietary components, consider dividing the contract among two or more manufacturers. That way, no one has all the pieces to your IP puzzle in one place and the risk of reverse engineering is reduced.
All our suppliers are also regularly audited to protect our clients’ interests.
How We Can Help
As experts at contract manufacturing, we hand-pick offshore partners who have a proven track record for quality and reliability. All our suppliers are also regularly audited to protect our clients’ interests. Our engineers can also work with your team to identify, document, and innovate on your designs and components, so you know what to protect.
Want to learn more about how to bring offshore safely to your door?
Visit The Federal Group USA.