Intellectual property when outsourcing

You are in the process of outsourcing a product or production process. Everything seems well organized, down to the one question: who can do what with the knowledge that is created? And who owns the solutions that are devised? Intellectual property (IP) often causes unnecessary friction. Needless, because if you ask the right questions and make agreements right away, both parties know where they stand. Below, we explain how to do that.

What is IP (and why it's less complicated than you think)?

It is the collective name for rights to elaborate ideas and creative concepts. On 3D models, test plans, software, or knowledge about tolerances. But it's mainly about one thing: making clear agreements in advance. Then IP becomes a practical tool for good cooperation.

This is what you need to know before you make those appointments.

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Background IP: the knowledge the agency already has

A good engineering firm never comes empty-handed. They bring their own toolbox: proven designs, internal calculation methods, design rules, supplier knowledge. That's what you call background IP. Knowledge that already existed before your project.

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You're not buying that knowledge. You can make temporary use of it, and that expertise remains with the agency. It's also logical: without that toolbox, your project would take twice as long.

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Foreground IP: what's made just for you

This is everything that is developed specifically for you during your project; the unique design, the special software, the specific tooling... That's foreground IP. The agreement is: do you become the owner of that result. You want that for three reasons:

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You have control over your product, even if you want to go to another party for adjustments in the future.
Your competitive position is protected. Your agency can't go to your competitor with a similar solution.
A unique design can significantly increase the value of your company.

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But the engineering office does get a right of use. to reuse the acquired knowledge and solutions in generic form — as long as your confidential information remains protected. That is healthy. An agency that only gets to use its good ideas once is slowly being eroded. And that is ultimately not in your interest either: each subsequent project will be more expensive and less good.

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In concrete terms, this means: the drawings and design of your product are yours. The office can freely reuse the principles and building blocks that have been applied therein.

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How do you capture this?

You don't have to write thick contracts. A few clear, explicit sentences in the quote or project proposal are enough:

Background IP: all knowledge, methods and tools that existed before the project remain owned by the engineering office.
Foreground IP: the customer-specific designs and documentation become the property of the client.
Right of use: the agency may reuse the knowledge gained and generic solutions in other projects, provided that the client's confidential information remains protected.
Confidentiality: both parties treat each other's non-public information confidentially.

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How we deal with IP at Trios

We know that good IP agreements ensure smooth cooperation. So we always do that before we start. And are we done? Then the intellectual property is yours.

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