Protecting Your IP in OEM Manufacturing: NDAs, Tooling Ownership, and Structural Safeguards
"Will my design get copied?" is the question behind many sourcing hesitations. The answer has a legal layer and — more powerful — a structural layer.
The legal layer
- NDA before drawings: signed with the party you contract with, under a jurisdiction whose courts function. Taiwan's do: IP litigation is real, judgments enforceable — a structural difference versus jurisdictions where NDAs are decorative
- PIA (production IP agreement): beyond secrecy — no production for others with your tooling, no sales of overruns, no derivative products
- Tooling ownership documented: your dies photographed, asset-tagged, contractually yours, with the right to remove
The structural layer (what actually protects)
- Need-to-know distribution: the factory making your spring sees the spring drawing — not the assembly, the customer list, or the end product. An integrator structure does this naturally: Formosa Spring holds the whole picture; each factory holds only its part
- Split sensitive assemblies: components across factories; final assembly under separated control
- Neutral packaging and paperwork: no end-customer branding travels to sub-suppliers
- Control the interfaces: what makes your product special is usually the assembly know-how and spec stack — keep those documents home
Honest risk assessment
Commodity springs are not copy targets — geometry is visible to anyone with calipers; the *drawing* adds tolerances and material specs, worth protecting but not existential. Genuinely novel mechanisms, proprietary material recipes, and market-identifying assemblies deserve the full structure above.
What to ask any supplier
"Who exactly sees my drawings? Where are they stored? What happens to them if we part ways?" Specific answers, quickly given, are the tell. Ours: drawings live in access-controlled project folders, go only to the quoting/producing factory under NDA flow-down, and are certified deleted on request at relationship end. Put IP requirements in the RFQ — they enter the quality agreement, not a promise.
Frequently Asked Questions
Is a US or EU NDA enforceable against a Taiwanese company?
Cross-border enforcement is slow; the practical route is an NDA under Taiwanese law with Taiwanese jurisdiction — enforceable where the counterparty's assets are. We provide bilingual templates our counsel maintains.
Can the factory reuse my die for someone else?
Not under a proper tooling agreement: your die, your part number, exclusivity written. The physical control point — dies stored at a factory you can audit — matters as much as the clause.
Should I patent before sourcing?
File before *any* disclosure if patentability matters (most jurisdictions bar post-disclosure filing). For many industrial parts, speed-to-market plus supplier structure protects better than patents; that is a business judgment worth making explicitly.