Outsourcing manufacturing: protecting your intellectual property

There are few assets more important and more valuable to an original equipment manufacturer than intellectual property. This makes it critical to ensure that you carry out due diligence in this area when you are looking to outsource any or all of your manufacturing.

You should have complete trust in your contract electronics manufacturer (CEM) to protect your intellectual property. A reliable and trustworthy product assembly partner should have the appropriate physical and digital safeguards to protect your intellectual property at all times.

To help you choose a CEM that will provide the intellectual property protection that you need, we have put together this short guide to ensuring that your intellectual property requirements are fully met.

How to achieve intellectual property protection with a CEM partner

  • Background, reputation and resources

    Assess the background and technical resources of your CEM candidate. First impressions are important but a thorough check of your potential partner’s experience and reputation and their ability to fully protect your intellectual property rights is vital.

  • Partner non-disclosure agreements

    Your prospective CEM should be willing to sign non-disclosure agreements (NDAs) that stipulate the behaviour you expect in relation to your intellectual property. The NDAs should state that your CEM is not allowed to share your information with anyone except members of their own staff.

  • Customer information storage

    Assess the data storage infrastructure of your potential CEM partner. They should have an up-to-date, well-maintained system in place that ensures that your customer and manufacturing information is filed separately and securely, and is backed up on a daily basis.

  • Permissions management and data access

    Assess the ability of your CEM candidate to manage permissions and access to your intellectual property. Not everyone at the CEM needs access to your information, and your data should be clearly labelled as confidential. A permissions-based infrastructure should be in place to manage this.

  • Secure parts storage

    Assess the ability of your potential CEM partner to securely store parts and accessories relating to your product. If your CEM will need to hold parts and accessories that belong to your product, they should be able to securely store these in designated, separate areas.

  • Data protection compliance

    Assess the compliance of your CEM candidate with the General Data Protection Regulation (GDPR). You want your intellectual property data fully protected and your partner is obliged to meet the GDPR standards relating to data protection. Compliance with the GDPR is an indicator that they offer the level of consistent protection you need.

  • Secure end-of-life product data disposal

    Assess the capacity of your potential CEM to safely and securely manage your customer and manufacturing information at the end of your product’s life. At this stage, your information should be returned to you or dealt with in an appropriate way to ensure that it is destroyed.

  • A strong contract

    Your potential CEM partner should be willing to sign a contract that includes stipulations relating to the protection of your intellectual property rights. The contract should set clear parameters in relation to the safeguards you want and how they will be provided.

When you outsource your production to a CEM, you need to share sensitive manufacturing and customer data. This data can include information relating to patents, trademarks, copyright and user interface and user experience designs.

If this information fell into the wrong hands, it could be very costly and hugely damaging to the performance of your product and your company. This is why it is vital that you choose a CEM that you can trust to protect your intellectual property rights.

To find out how MPE Electronics product assembly services can benefit your business, contact us on +44 (0)1825 764822 or enquiries@mpe-electronics.co.uk.