Jo Lloyd-Davies gives an overview of the intellectual property issues involved in finding new suppliers
Manufacturers often buy components from third parties. In economically healthier times, order books were full and outsourcing allowed manufacturers to free space within their factories.
As the manufacturing industry matured, competition within it increased and costs could be saved by buying from suppliers that served many companies within the same sector.
With economic health came complacency. Forecasted high volumes demanded that deals were done quickly; supplier drawings were e-mailed to manufacturers for approval, often without a supporting non-disclosure agreement or supply agreement in place.
Manufacturers are now looking to buy components from cheaper sources or to bring their manufacture in-house. Times are gloomier and such moves are desirable both to save costs and to reduce the potential impact of supplier insolvency.
Buying teams must cut costs but are often unfamiliar with the intellectual property issues involved. This is unsurprising given the myriad registered and unregistered rights which can co-exist.
Registered rights
If the supplier owns a patent or registered
