When researchers or businesses have ideas for new or improved products, proof of concept is of the utmost importance. Prototypes can show what a product can do, which can help companies secure investors, acquire distribution channels and pre-sell products before they go into active production.
Unfortunately, prototype manufacturing is a theoretical source of risk for businesses with new and improved concepts. Given that many companies use offshore manufacturing facilities, loopholes in intellectual property rules, including issues with non-enforcement in other countries, can endanger an innovator’s ability to monetize a new or improved product.
Prototype protection requires careful planning
Offshore factories are notorious for taking a concept or design and then producing far more than the client organization actually ordered. They may retain seconds or substandard products. The goal is to develop a secondary retail channel, often on cut-rate websites. Manufacturers can theoretically sell products that have patent protection in the United States or patents pending at the time of prototype manufacturing.
Depending on the location of the factory, holding the manufacturer accountable for violating a patent or a contract that promises non-disclosure and non-competition can be challenging. Proper contract inclusions, careful due diligence and prompt patent prosecution are all important. Business leaders concerned about protecting their intellectual property often find that the patent process and other elements of intellectual property protection are complex to effectively manage in-house.
Retaining the services of a specialized patent and intellectual property attorney makes it easier for companies to select manufacturers with a good track record, negotiate contracts that protect them from violations and take action in cases where manufacturers use their access to prototype details to violate a client’s rights.