Why is this a risk?
Intellectual property is generally described as patents, trade secrets, designs, trademarks and copyright. In many situations, your company will be sharing such intellectual property with your suppliers. Therefore, your suppliers need to take precautions to protect your intellectual property.
Examples of where this risk could affect you
- You are having a supplier manufacture one of your products, providing access to patents and designs and there is a risk information will be copied ending with the supplier becoming a competitor
- You allow a supplier to access to trade secrets regarding your manufacturing process and there is a risk the information will become public
- Your supplier is printing certain material subject to copyright and they use some of the material for their own purposes or copy materials for resale
- Your supplier is an IT software company producing software on your behalf and makes the source code public or incorporates the code into their own product
What sort of suppliers could be engaged in this risk area?
Almost every supplier has some form of intellectual property granted to them when they engage with your company. The most likely places where these matters are identified lie in the following supplier categories:
- outsourced computer programmers
How are these risks managed?
The risks of intellectual-property infringements are normally managed through:
- ensuring that the supplier has adequate controls
- making sure the supplier understands the obligations and is trained to handle such intellectual-property assets
- audits and reviews on suppliers' disclosures
- market vigilance and reviews.