Sharing and spreading information is easier than ever, which is not always an advantage. The digital age has made keeping information surrounding intellectual property and product releases secret a complex task.

AmericaStrictly monitoring information flow within a supply chain is critical to keeping information seals tight. For companies in an IP-heavy value stream, having secrets slip out can be incredibly damaging, especially when it regards their newest product. Spoiled social buzz or destroyed trade secrets from hapless firms who didn’t monitor their supply chains have made national news multiple times. Following the tips below will help you keep your secrets properly locked away.

Deal with American-Owned Foreign Entities

Having your intellectual property cross national borders brings a number of complications.  You will need to release your information to your supply chain partners carefully, especially when dealing with countries that offer reduced labor costs.

In less developed nations, lower labor costs go hand in hand with lower legal standards surrounding intellectual property. There are countless IP infringements in China that carry on unpunished for quite some time. Most famously, a number of individuals operated more than 20 fake Apple stores, complete with Genius bars and characteristic employee nonchalance. The stores also retained Apple’s high profit margins. Authorities eventually shut down the fake Apple stores, but it took month’s government outcry and more stores continue to crop up. Your brand might not be as sought after as Apple’s, but if violators can get away with something so bold, you’re not likely to be well-protected.

Instead of dealing with foreign owned companies, find manufacturers or partners that are American-owned with operations in China or other countries. Foreign-owned organizations don’t have much to fear. China, along with many other nations, has made it clear that they are not eager to impose damages against their own companies. On the other hand, American or Western-owned companies understand that any IP infringement will come with swift legal recourse, regardless of the location of their operations.

If you have to base any of your operations in less developed nations, it’s imperative that you find American-owned companies to work with.

Only Share What is Necessary

Regardless of how much you trust your partners, don’t give them information that is not absolutely necessary.

Your manufacturers and partners should tell you quite specifically what they need to produce or handle your product. Ensure that they have what they need to be effective, but put tight controls on the information the flows upstream. Standardizing a system of oversight for anything that is being released to an external party will at least combat negligence.

The best way to prevent IP infringement and information leaks is to limit your partner’s opportunity to share such things from the beginning. Scrutinize the information flowing out of your supply chain and only allow the essentials to pass through. Sharing information with your partners is required for success; precisely controlling what is shared will keep your company safe.

handshake isolated on business background

Understand Your Suppliers IP-Layering Strategies

If you’ve found competent upstream partners to work with, they should already have strategies in place to protect IP. Be sure that you understand the complexity and incentives behind those strategies.

When creating one final product, the intricacy of modern technology requires the involvement of numerous patents and copyrights. Understanding how these various IP components come together and who possesses the rights to each specific piece will help you understand how to stay protected.

Especially within high-tech industries, there are now many corporations that compete in certain spaces and partner in others. This situation creates complex incentives to say the least. The only way to be sure that your innovations aren’t infringed on is to be sure of the motivations and incentives weighing on the major players of your value stream.

As with all elements of supply chain design, there are two elements that always come first: work with trustworthy people and enact all relevant, written agreements. Regardless of whatever economic incentives exist, working with a company that you don’t completely trust isn’t worth the risk. The fallout from a nefarious partner’s actions could completely ruin your company and destroy your good name. Further, no matter how much you trust your partner, get everything in writing. Dotting all the ‘i’s and crossing all the ’t’s is about ensuring that everyone is on the same page and in agreement, not about distrust. If there is distrust before an agreement is signed, there shouldn’t be any agreement at all.

The current number of IP-related legal proceedings demonstrates how frequently infringements occur. It’s not hard to recall the last time a major product release was muted by information that was leaked prior to the big day. Build a tight IP-pipeline around your supply chain by dealing with American-owned companies, keeping tight controls on what you share, and thoroughly understanding your supplier’s IP strategies.

Video – The Importance of Supply Chain Risk Mitigation

We are curating a conversation about supply chain risk at costflexrisk.com.  We put this video together to highlight the impact of supply chain risk in the news.  Please take a look and then let us know what you think at @GSCSOptimize:

Images used under creative commons attribution license.

Featured image: Lion by Arno Meintjes Wildlife

Other images: America by UConn Libraries Magic, Handshake by SalFalko