Design Electronic Products to Manufacture anywhere. Why You need to Own All IPs for each product you Sell & Distribute

At Toptronic® Laboratories ® we design DMP for products with high electronic content, but why do you need to own all IPs (IP = Intellectual Property) for each product and parts of products you sell and distribute?

It is simple, you need to be in Control of your Income because it is yours, not your supplier’s.

Let me explain you few things.

As a distribution business, you probably buy OEM.

Let me refresh you about OEM: OEM stands for “Original Equipment Manufacturer”. This term refers to a company that produce parts or products that are used in other companies’ products, either as components or as standalone products. An OEM is typically a specialized manufacturer that produce parts or products that are designed and engineered to meet specific standards and requirements.

In the context of consumer electronics, an OEM might produce components such as motherboards, displays, or batteries that are used in a variety of different products, such as smartphones or laptops.

In the automotive industry, an OEM might produce parts such as engines, transmissions, or suspension systems that are used in multiple vehicle models.

The term ‘Original Equipment” refers to the fact that these parts or products are designed and produced by the same company that originally manufactured the end product.

This is in contrast to aftermarket parts or products, which are produced by third-party manufacturers and designed to fit or work with a variety of different products.

Overall, OEM Products are generally considered to be of higher quality and reliability compared to aftermarket products, as they are designed and engineered to meet specific standards and specifications set by the original manufacturer and the standards they adhere to.

But who owns the IP of an OEM Product (I mean a real OEM, not a duplicated one)?

The Intellectual Property (IP) of OEM products is typically owned by the OEM manufacturer that designed and produced all the aspects of the product.

This can include patents, trademarks, copyrights, and trade secrets related to the design, engineering, and production processes used to create the product.

In some cases, the OEM manufacturer may license its IP to other companies for use in their own products or may allow other companies to manufacture and sell the OEM product under a licensing agreement.

However, the OEM manufacturer would still retain ownership of the original IP.

It’s worth noting that in certain situation, an OEM manufacturer may use components or technologies developed by other companies in their own products.

In these cases, the OEM Manufacturer would need to obtain the necessary licenses or permissions to use the other company’s IP.

In many “so called cheap” countries, many “Copy = R&D = Reduce & Duplicate Manufacturers” are disguised as OEM manufacturers, but in reality, many never originally designed anything. The only original thing, it their claim to originality.

What was your legal input in the design of the products? If this is just for packaging purpose, then, maybe you own the IP of the artwork only. Did you do it in house? What is your chain of proof?

ODM, is something different. ODM stands for “Original Design manufacturer”. An ODM is a company that designs and manufacture products for other companies to sell under their own brand names.

ODMs typically have their own design teams and production facilities (as many of the Reduce & Duplicate Manufacturers have), and they work closely with their clients to create custom products that meet their specific requirements and specifications.

Unlike OEMs, which typically produce standardized products that can be used across multiple product lines, ODMS specialize in creating unique products that are tailored to their clients’ needs.

ODMs may also be involved in product testing, quality control, and logistics, and they may produce additional services such as packaging design and marketing support.

Examples of ODM products include consumer electronics such as smartphones and tablets, as well as industrial and medical equipment. ODMs are often used by companies that do not have their own design and/or manufacturing capabilities, or by companies that want to bring new products to market quickly and efficiently.

You question remain; who has ownership of the Intellectual Property (IP) for ODM products?

That can vary, depending on specific agreements between the ODM and the client company (in this case, you).

In some cases, the client company may own the IP for the product while in other cases, the ODM may retain ownership of certain aspects of the IP.

Typically, the ownership of IP is determined by the contractual agreements between the ODM and you, the client.

These agreements can specify how the IP is licensed or transferred between the parties and who has the right to use or modify the IP.

It is important for both the ODM and you to have a clear understanding of who owns the IP and how it can be used to avoid any potential legal disputes.

In general, you should own and control the totality of the IP related to the product’s branding, packaging, all the designs, marketing materials and manufacturing processes.

If you own only the branding, then, your supplier can manufacture the same (or versioned) product without your permission.

Some ODM may own the IP related to the product design, engineering, and manufacturing processes, but that is at your peril.

All this can vary depending on the specific’s terms of the agreement between you and the ODM.

If you are a distribution company who buy, generally by attending tradeshows and ask manufacturers to brand their products for you, it means you do not own the product.

You only own the brand and do not have all the fully engineered designs and drawings specifying why and how things are designed and put together in production, it means you do not own the product at all as you cannot manufacture it at a different location by yourself.

Your income can be categorized as “High Risk”.

This also means that you cannot manufacture the product at another factory because you do not have all the original and historical information of the designs and all its parts information to be able to manufacture, as they are not yours.

You Probably only Own your Brand, but not the inside of the product, not the case (unless you own the design of the molds themselves, not just the physical molds and you can prove it)

Who owns the IP of the Electronic Circuits Diagrams, the Printed Circuit Board Layout and the Software? These are different IP, and you need to own all of them.

The test of knowing if you own them, is to be able to be in charge of multiple manufacturing operations as required. If you can’t, then, you are missing the most important part, the DMP.

If you have been buying products made by a factory somewhere because it was cheap and your quantities have increased to numbers which are significant, you are at numerous risks.

Sooner or later, your competitors will find out who your suppliers are, and they will manage to buy the products to compete against you.

But do you own any of the IP at all? What protections do you have against your supplier distributing the product themselves?

All that can be discussed with you, and we can provide a proven solution for you to own all the IP and a Global DMP to manufacture anywhere, anytime.

Protect your income, book a paid consultation. We will enlighten you.