Protecting intellectual property (IP) is important to any business, but especially so when you are launching a startup. Often your IP’s security can mean the difference between a viable business and a startup failure. That is why protecting your IP during the manufacturing phase of product development is critically important. Below we examine the IP security pros and cons of domestic v. international manufacturing for your hardware startup.
When it comes to manufacturing your product in the U.S. there are many benefits, such as: ease of access, clear communication, fast fulfillment, reduced shipping fees and IP security.
When you hold a patent in the United States and decide to also manufacture here, you are guaranteed a certain level of security that your startup’s IP won’t be stolen. However, if for some reason this security breaks down, you have legal recourse for the damages.
When it comes to manufacturing your product abroad there are certain advantages that can make monetary sense for your startup: reduced costs, high-volume capacity and increased manufacturer partner options. However, IP protection is not one of the benefits.
If your invention is protected in the U.S. with a patent, trademark or copyright, these protections are not guaranteed overseas. Patenting an invention in the U.S. is not necessarily quick and it can be costly—the same goes for international patents. Often startups don’t have the funds to allocate to international patent protection. However, there are other ways to protect your IP in a foreign market.
- Contractual Security
A well written and carefully constructed non-disclosure agreement (NDA) can protect IP from the onset. Clauses covering IP security can be included to establish clear ownership.
- Implementing Security Measures
Restricting the number of individuals that have access to your product’s IP and conducting background checks on key personnel can help keep your IP safeguarded. Encrypting all digital files and communication that contain IP is another measure you can take to protect it.
- Intellectual Property Insurance
You can transfer some of your IP risk by acquiring insurance. Intellectual Property Insurance typically protects against the significant legal costs that will need to be paid if an organization pursues its IP claims through the court system. It can cover both enforcing and defending claims. (Source: Trade Ready)
As President Lincoln once remarked, the patent system adds “the fuel of interest to the fire of genius.” IP rights, which include patents, trademarks, trade secrets and copyrights play an essential role in monetizing innovation. (Inc.)
Related articles of interest:
- Domestic v. International Manufacturing for Your Startup
- 4 Tips for a Smooth Start to Manufacturing Your Product
- FAQ: The Basics of Intellectual Property and Manufacturing
Have additional IP and manufacturing related questions? Send us an email at email@example.com
3D Innovations is a Product Development Company – from the 3D Design to a fully functional 3D Prototype & Product.