What Are The Concerns When It Comes To IP Protection And Going Offshore?
IP protection has become a big issue in the business world. Over the years there have been many types of concerns about IP protection. There are high-tech U.S. companies that want to leverage low-cost areas of the world like China or South Asia. But, they’re hesitant to go over there because they have heard nightmares about IP theft. IP theft is real and well thought of it can become a huge mess for the company. The Chinese legal system has come a long way over the years but still has its challenges.
It’s difficult to get through the Chinese judiciary system when it comes to IPs and IP protection. Foreign companies that don’t have a presence in China are going to face problems. Things such as understanding laws and finding legal representatives for Chinese courts. Thus, customers often choose not to engage in foreign manufacturing services from China.
How Do They Ease Their Concerns When It Comes To Offshore Partners In China?
So, you want to make sure that in all engagements, you sign mutual NDAs. These should be very well written by lawyers, not copied and pasted from websites. These NDAs should reference the projects that you’re talking about. You should be very familiar with the exchange of engineering documentation. Every engineering documentation should have references where the exchange data has IP involved. Additionally, it should have the property of the company whose name is on that document. Many Chinese companies are networking with a lot of component and sub-assembly suppliers. If you’re concerned about the component or sub-assembly level, IP may be important to you. You want your manufacturing partners to have mutual NDAs referencing the projects. This helps when they exchange specifications with their supply chain partners. Thus, the entire engaged supply chain is on the same terms that you want to have IP protection.
How Does iConn Come Into Place When It Comes To IP Protection?
We have documented mutual NDAs. We like to use ours, but often large customers give us theirs to ensure they feel good about their IP protection. The entire supply chain will be signing that specific mutual NDA. Also, when interacting with our manufacturing partners, we exchange data using an Oracle MRP system. Oracle provides exceptional protection against hacks and intrusions, and we leverage that.
Additionally, we structure projects a certain way. Let’s say a top-level assembly consists of many sub-assemblies and components. The involved partners will have no idea what the top-level assembly will look like. For example, when we talk to our:
- sheet metal house,
- plastic house,
- printed circuit board house,
- cable house, they only will receive part of the drawings, which is not telling much. It is something to them. Enough to manufacture and repeat, but not something to run away with.
Also, we have over 15 years of relationships with these manufacturing partners. They are accountable. There’s a lot of skin in the game on both sides. And, they too have systems that iConn personnel audit to make sure IP leakage is not an issue at all. The last and most important thing here is that iConn’s headquarters is in beautiful Irvine, CA. As the country with the best IP protection, our customers can trust their IP and we will be accountable.
For more information on working with offshore manufacturing partners, click here!