Contract Manufacturing IP Checklist: Tooling and Mould Ownership, Specification and Improvement Terms, Confidentiality Controls, Overrun and Gray Goods, and Exit

By Casey Scott McKay · 2026-05-16

A contract manufacturing relationship transfers designs, specifications, process knowledge, tooling, and trademarks to a party in another jurisdiction, usually under a purchase order that allocates none of them. This checklist works through the sequence that keeps a brand able to make its own product somewhere else: establishing tooling title and possession, holding the specification set, testing the improvements and residuals terms, building a confidentiality regime that satisfies the reasonable measures standard, metering components against units, and securing transfer obligations that survive termination for cause. Each phase carries gate items that should stop the engagement until they are resolved. The traps are the ones that are cheap to prevent at the outset and close to impossible to cure afterwards: the unmarked tool, the standard-form residuals clause, the unlimited artwork stock, and the single source.

IP and Technology > Trade Secrets | Checklist | Published 16 May 2026 - Updated 26 June 2026 | Casey Scott McKay - marksy.us

Summary. A contract manufacturing relationship transfers designs, specifications, process knowledge, tooling, and trademarks to a party in another jurisdiction, usually under a purchase order that allocates none of them. This checklist works through the sequence that keeps a brand able to make its own product somewhere else: establishing tooling title and possession, holding the specification set, testing the improvements and residuals terms, building a confidentiality regime that satisfies the reasonable measures standard, metering components against units, and securing transfer obligations that survive termination for cause. Each phase carries gate items that should stop the engagement until they are resolved. The traps are the ones that are cheap to prevent at the outset and close to impossible to cure afterwards.

Keywords: contract manufacturing · tooling ownership · mould title · original equipment manufacturer · specification control · improvements clause · residuals clause · trade secret reasonable measures · overrun production · gray market goods · second source qualification · technology transfer · supplier audit · section 337 · escrow

How to use this checklist

| Phase | What it establishes | Who runs it | Gate | |---|---|---|---| | 1. Scope the transfer | What actually leaves the building | Product and legal | No transfer of process parameters before the confidentiality regime exists | | 2. Tooling and moulds | Title, marking, possession, insurance | Operations and legal | No tooling payment without a title clause | | 3. Specifications and design | Who holds the definitive file | Engineering | Design filings before the first factory sample circulates | | 4. Improvements and residuals | What the supplier can reuse | Legal | No signature over an unmodified residuals clause | | 5. Confidentiality architecture | Whether the measures are reasonable | Legal and IT | Subcontractor and individual coverage before disclosure | | 6. Quantity and channel control | Whether overruns are detectable | Supply chain | Metering scheme live before first production run | | 7. Audit and change control | Whether the record is defensible | Quality and legal | Unannounced audit right in the agreement | | 8. Exit and continuity | Whether you can leave | Executive | Transfer obligation surviving termination for cause |

The matter. A consumer hardware business has manufactured its flagship product at a single overseas factory for four years under a purchase order with a one-page confidentiality annex. The tools were paid for by the brand and are unmarked. The factory has refined the process substantially and holds the only current parameter set. Units bearing the brand's mark have appeared in two markets it does not sell into. The board has asked what it would take to move production, and nobody can answer.

Phase 1. Scope what actually transfers

[ ] Inventory every category of information the supplier receives. Product designs, engineering drawings, tolerances, materials specifications, process parameters, test protocols, tooling designs, packaging artwork, authentication features, brand assets, and customer or forecast data.
- Why. You cannot protect what you have not identified, and the reasonable measures element of 18 U.S.C. § 1839 is assessed against the specific information asserted, not against the relationship generally.
- Trap. The category almost always missed is packaging and authentication artwork, which is what makes an unauthorised unit indistinguishable from an authorised one.
[ ] Classify each category by tier. Tier 1 is transferred and unavoidable; Tier 2 is transferred but segregable; Tier 3 should never leave.
- Why. Segregation is the single most effective protective measure available, and it costs nothing if designed before the first transfer.
- Trap. Tier 3 items — a proprietary coating formulation, a firmware signing key, a calibration algorithm — are routinely disclosed because nobody asked whether the factory needed them.
[ ] Record whose design each product is. Brand-designed and factory-built, jointly developed, or supplier-catalogue with brand cosmetics.
- Why. This single determination drives ownership of improvements, the enforceability of exclusivity, and whether the supplier can lawfully sell the same article to a competitor.
- Trap. Businesses assume they own designs their supplier developed, and discover otherwise when the same article appears under another brand.
[ ] [Gate] Confirm no Tier 1 process parameter has been transferred before a confidentiality regime is in place. If it has, treat the remediation path in Phase 5 as urgent rather than routine.

Phase 2. Establish tooling and mould position

[ ] Build a tooling register. Every tool, mould, die, jig, and fixture: identifier, location, product, who paid, title basis, marking status, maintenance history, insurance, and whether a duplicate exists.
- Why. Tooling is the physical bottleneck of the relationship. Every other protection is theoretical if the tools cannot be moved.
- Trap. Most registers exist only as line items in a capital expenditure file and record nothing about location or title.
[ ] Confirm a written title clause for each tool. Payment alone does not transfer ownership, and the default in most manufacturing jurisdictions favours the possessor.
- Why. Ownership must be documented before the dispute, because after it the tools are in a foreign jurisdiction and the product line is stopped.
- Trap. "We paid for the tooling" is the most common and least useful position in this area.
[ ] Mark every tool with the brand's name and an asset number. Photograph the marking, and record it in the register.
- Why. Marking is evidence of title, it defeats the "which tool is yours" argument at the point of recovery, and it costs nothing.
- Trap. Unmarked tools in a factory holding tools for a dozen customers are, practically, unrecoverable.
[ ] Address liens and amortisation expressly. Waive statutory and contractual liens over brand-owned tooling, and if tooling cost is amortised into unit price, record the amortisation schedule and the buyout figure.
- Why. A supplier asserting a lien for disputed invoices holds the entire product line hostage.
- Trap. Amortised tooling is frequently treated by the supplier as its own asset until fully paid, and the agreement is silent on the point.
[ ] Require notice before any tool moves. Including to a subcontractor or an affiliate facility.
- Why. Tools relocated to a subcontractor are outside both the audit right and, often, the confidentiality agreement.
[ ] [Gate] Do not release tooling payment without an executed title, marking, lien-waiver, and access clause. This is the only moment when the leverage exists.
[ ] Cost a duplicate tool set for the highest-volume products. Held at a second facility or in the brand's own storage.
- Why. Duplicate tooling converts the recovery dispute into a non-event, and it is usually cheaper than three months of stopped production.
- Trap. The decision is deferred as capital expenditure and then made under duress at ten times the cost.

Phase 3. Hold the specifications and file the designs

[ ] Take delivery of the specification set in native, editable formats. CAD files, bills of material, tolerance stacks, materials data sheets, test protocols, and process parameters — not PDFs.
- Why. A brand holding only PDFs cannot hand a package to a second factory, and the transfer becomes a negotiation with the supplier it is leaving.
- Trap. The definitive file drifts to the factory over years of engineering change, and nobody notices until the day it matters.
[ ] Confirm assignment of copyright and design rights in every drawing and model. From employees, from contractors, and from the supplier's engineering team where it contributed.
- Why. Copyright in a technical drawing protects copying of the drawing; it does not reach the making of the useful article, which 17 U.S.C. § 113(b) leaves outside copyright's scope.
- Trap. Businesses over-rely on drawing copyright and under-file the design registrations that would actually protect the article.
[ ] File design patent applications on the product's appearance before the first factory sample circulates. The 35 U.S.C. § 102(b) grace period is one year in the United States and absent in most other jurisdictions.
- Why. A design registration is the only right that reaches an identical-looking article made by a former supplier without proof of drawing copying, and it supports the ordinary observer test applied in Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) (en banc).
- Trap. Factory samples shown at a trade show or sent to a retail buyer are disclosures, and they destroy foreign novelty immediately.
[ ] Screen the process for patentable subject matter separately from the product. Manufacturing methods are frequently patentable and almost never filed.
- Why. A method claim reaches the supplier's continued use of the process after termination, which no confidentiality clause reliably does.
[ ] Escrow the specification set with a third party, with verification. And test the deposit annually.
- Why. Escrow without verification is a filing cabinet. A verified deposit is a transferable package.
- Trap. Deposits go stale within two engineering change cycles.
[ ] [Gate] Confirm design filings are on file, or a documented decision not to file exists, before samples leave the facility.

Phase 4. Test the improvements and residuals terms

[ ] Read the residuals clause and strike it. The standard formulation permits the recipient to use information retained in unaided memory, and it is frequently the most consequential sentence in the document.
- Why. A residuals clause authorises precisely the reuse the confidentiality clause was drafted to prevent, and process knowledge is exactly the kind of information that lives in the memory of the engineers who applied it.
- Trap. It is accepted because it appears in the supplier's standard form and looks technical rather than substantive.
[ ] Classify improvements into three buckets. Improvements to the brand's design; improvements to the supplier's general manufacturing capability; and joint developments.
- Why. A clause assigning everything to the brand is unenforceable in several manufacturing jurisdictions and ignored in practice; a bucketed clause is negotiable and survivable.
- Trap. A single sweeping assignment produces a clause the supplier signs and no tribunal will enforce.
[ ] Secure a licence back where assignment fails. Perpetual, worldwide, royalty-free, for the brand's products, and expressly surviving termination.
- Why. Where local law will not permit assignment of the supplier's improvements, a licence delivers the operational outcome.
[ ] Confirm the enforceability of the ownership terms under the supplier's governing law, not only under the agreement's chosen law.
- Why. An assignment of employee inventions governed by New York law and performed by engineers in a jurisdiction with mandatory inventor remuneration rules is worth what the local court says it is worth.
[ ] Address tooling refinements expressly. Improvements the factory makes to a brand-owned mould belong to the brand only if the agreement says so.
- Trap. This is a routine source of surprise at the point of tool recovery.
[ ] [Gate] Do not execute an agreement with an unmodified residuals clause. If the supplier will not strike it, narrow it to exclude specifically identified Tier 1 parameters.

Phase 5. Build a confidentiality architecture that satisfies the standard

[ ] Extend confidentiality obligations to subcontractors by name, with flow-down and back-to-back terms.
- Why. The article is frequently made two tiers below the party that signed, and an obligation reaching only the prime contractor covers the wrong party.
- Trap. Flow-down language exists but is never evidenced; ask for the executed subcontractor agreements.
[ ] Obtain individual undertakings from the engineers with parameter access, or evidence that enforceable employment obligations exist.
- Why. The people carry the knowledge, and they change employers.
[ ] Segregate Tier 1 parameters. Separate accounts, separate documentation, access lists maintained and reviewed.
- Why. Segregation is what distinguishes a reasonable measures record from a confidentiality clause, and it is what courts look for in the DuPont v. Christopher, 431 F.2d 1012 (5th Cir. 1970) line of reasoning about precautions proportionate to value.
[ ] Mark documents and files. Consistently, and at the point of transfer rather than retrospectively.
- Trap. Blanket marking of everything is treated by tribunals as marking nothing.
[ ] Maintain an access register. Who at the supplier holds what, updated on personnel change, and reconciled at each audit.
- Why. This is the document that answers the reasonable measures question in a single page, and almost no business has it.
[ ] Confirm survival. Confidentiality obligations for trade secrets should survive termination for as long as the information remains secret, not for a fixed three-year term.
- Trap. A fixed term converts a trade secret into a timed licence.
[ ] [Gate] Confirm subcontractor and individual coverage exists before any Tier 1 disclosure.

Phase 6. Control quantity and channel

[ ] Set an express authorised quantity per order, with a defined overrun tolerance.
- Why. Without a stated ceiling, there is no breach to point at when extra units appear.
- Trap. Agreements specify minimums and are silent on maximums.
[ ] Meter the controlled components. Serialised labels, authentication features, branded closures, holograms, or firmware activations issued in counted quantities against authorised orders.
- Why. This is the only mechanism that reliably stops overruns, because it makes a complete unit impossible to assemble without the brand's participation.
- Trap. Artwork files sent to the factory with no quantity control are an open licence to print.
[ ] Require reject and scrap destruction with certification and, for high-value lines, witnessed destruction.
- Why. "Rejects" is the standard channel for diverted units.
[ ] Reconcile monthly. Components issued, units produced, units received, rejects destroyed. Investigate every variance.
- Why. The reconciliation is both the detection mechanism and the evidence in any later proceeding.
[ ] Prohibit sales to third parties of any article made on brand tooling or to brand specifications, expressly and without a de minimis carve-out.
[ ] Assess the trademark position on diverted genuine units. Because the goods are genuine, a claim depends on establishing a material difference between the diverted and authorised units under the reasoning in Lever Bros. Co. v. United States, 981 F.2d 1330 (D.C. Cir. 1993), and on the gray market framework of 19 C.F.R. § 133.23.
- Trap. The instinct is to sue for counterfeiting; the goods are usually authentic, and the claim fails without the material difference showing.
[ ] Record marks and copyrights with Customs and Border Protection. Recordation under 19 U.S.C. § 1526 is inexpensive and is the precondition for border seizure.
[ ] Consider a section 337 investigation for imported articles. Proceedings under 19 U.S.C. § 1337 reach the goods rather than the foreign maker, and an exclusion order operates without personal jurisdiction over the factory.
[ ] [Gate] Do not authorise a first production run before the metering scheme is live.

Phase 7. Audit, change control, and records

[ ] Secure an unannounced audit right with a short notice period, covering the facility, the subcontractors, the production records, and the component inventory.
- Why. A scheduled audit measures a facility's ability to prepare for an audit.
- Trap. Audit rights are commonly reserved and never exercised, which is worse than not having them because it evidences awareness without action.
[ ] Exercise the audit at least annually and document it. Scope, findings, remediation, and follow-up.
- Why. The audit file is simultaneously an operational record and the best available evidence of reasonable measures.
[ ] Impose formal change control. No change to materials, process, subcontractor, or facility without written approval.
- Why. Uncontrolled change destroys the specification's evidentiary value and is the usual root cause of a quality escape.
[ ] Keep incoming inspection records against specification.
- Why. When a recall allocation dispute arises, the question is whether the specification or the execution failed, and it is decided on records.
[ ] Maintain a document retention schedule covering the relationship, including the drawings as issued at each revision.
- Trap. Superseded revisions are deleted, and with them the ability to prove what was specified when.
[ ] Reconcile the tooling register physically at each audit. Confirm location, marking, and condition of every tool.

Phase 8. Exit and continuity

[ ] Draft technology transfer obligations that survive termination for cause. Delivery of current specifications, process documentation, and validation records; support for requalification at a stated rate; and cooperation with the replacement supplier.
- Why. A supplier terminated for breach has no incentive to cooperate, and an obligation that dies with the agreement is worth nothing at the only moment it is needed.
- Trap. This is the single most commonly omitted provision in contract manufacturing agreements.
[ ] Provide for tool return with a deadline, a location, and a liquidated remedy for delay.
[ ] Set a transition period with committed capacity and priced continued supply.
- Why. A brand that must qualify a new factory while its existing one has stopped shipping is negotiating from nothing.
[ ] Escrow the specification package with verification and annual refresh.
[ ] Qualify a second source, or cost and timetable the qualification and report it to the board as a concentration risk.
- Why. This is the only measure that changes the balance of the relationship rather than documenting it. Everything else in this checklist is enforcement; this is leverage.
- Trap. Single sourcing is treated as a procurement efficiency and never surfaces as a governance item.
[ ] [Gate] Confirm a surviving transfer obligation exists. If it does not, treat the next contract renewal as the priority remediation event.
[ ] Confirm post-termination restrictions. No manufacture of the same or a confusingly similar article; no use of brand-owned tooling; no retention of specifications; certified destruction or return of confidential materials.

Outcome. At the end of this checklist the business should be able to state, in one page: where every tool is and who owns it; that it holds the current specification set in native formats; what the supplier may and may not reuse; who at the supplier has access to what; whether the units produced reconcile to the units authorised; and how long it would take, and cost, to make the product somewhere else. A business that can answer those six questions can change factories, enforce against unauthorised production, and pass a diligence review. A business that cannot is dependent on a counterparty in another jurisdiction, and every enforcement question becomes a threat the factory can call.

Phase 9. Diagnose an existing relationship

Most engagements begin years into a relationship, not at its start. Run this diagnostic before drafting anything.

[ ] Locate every tool physically. Ask for photographs with the asset marking visible, and if there is no marking, that is the first finding.
- Why. The register is a document; the tools are the asset. The gap between them is where the exposure sits.
- Trap. Suppliers report tool locations from a system of record that was last accurate three facility moves ago.
[ ] Read the actual operative documents, which are frequently a master agreement nobody has looked at, a purchase order with terms on the reverse, and an email chain that varied both.
- Trap. The confidentiality annex is often signed by an entity that no longer exists or by an affiliate that does not operate the facility.
[ ] Test whether the brand can produce a complete, current specification package today. Ask engineering to assemble it in a week without contacting the supplier.
- Why. This single test answers the exit question more honestly than any contract review.
- Trap. Engineering will report that it can, and then discover the current parameters were set on the factory floor and never came back.
[ ] Ask who at the supplier holds the Tier 1 information, by name and role, and whether any of them have left.
- Why. Departures are the primary leakage vector, and they are invisible from the brand's side.
[ ] Reconcile one product for one quarter. Components issued against units received.
- Why. A variance is the fastest available evidence of an overrun problem, and the absence of one is genuine reassurance.
[ ] Price and time a factory change with operations, including requalification, regulatory refiling if applicable, and lost production.
- Why. This number is what converts the issue from a legal concern into a governance item, and it is the number that gets the remediation budget approved.
[ ] [Gate] Report the concentration risk to the board with that number attached before proposing contractual remediation. The contract work is the second step, not the first.

Phase 10. Sequence the remediation

[ ] Do the free items immediately and unilaterally. Mark the tools, build the register, assemble the specification set, record the access list, and reconcile one product.
- Why. None of these requires the supplier's agreement, and together they resolve most of the evidentiary exposure.
[ ] Use the next renewal or the next new product for the contractual items. New tooling, new products, and new facilities are the natural insertion points for the eight clauses.
- Trap. A demand to renegotiate mid-term, without a commercial trigger, produces resistance and no agreement.
[ ] Prioritise three clauses if only three are achievable. Tooling title with marking and access; a residuals carve-out; and a transfer obligation surviving termination for cause.
- Why. Those three convert a hostage relationship into a commercial one. The remaining five improve a position that is already survivable.
[ ] Fund the second source last and decide it first. The capital request takes longest to approve and takes longest to execute.
[ ] Re-run the diagnostic annually, and treat the audit, the reconciliation, and the second-source review as standing items rather than projects.

Phase 11. Handle the incident

When unauthorised product appears, or the supplier is suspected of copying, work this sequence rather than reaching for a complaint.

[ ] Buy the units and examine them. Component sourcing, tooling witness marks, serialisation, packaging revision, and authentication features.
- Why. Tooling witness marks tell you whether the units came off your moulds, which is the single most probative fact available and is obtainable in a week.
- Trap. Businesses characterise the units as counterfeit before examining them, and the examination frequently shows they are genuine — which changes the entire legal theory.
[ ] Reconcile the serial or lot numbers against the production record.
- Why. A gap in the sequence, or a duplicate, identifies both the run and the period.
[ ] Trace the channel backwards. Retailer, distributor, importer, exporter, and consolidator, using purchase records and shipping documents.
- Why. Section 337 relief under 19 U.S.C. § 1337 and customs recordation under 19 U.S.C. § 1526 both operate on the import event, so the importer of record matters more than the factory.
[ ] Choose the theory the facts support. Genuine units diverted (contract and material difference), units made on brand tooling for a third party (contract, design patent, trade secret), or units copied independently (design patent, trade dress, method claims).
- Trap. Pleading counterfeiting against genuine overruns produces an early loss on the merits and forfeits the contractual remedies.
[ ] Preserve evidence before giving notice. Test buys, chain of custody, the tooling register, the reconciliation, and the confidentiality architecture record.
- Why. The reasonable measures showing under 18 U.S.C. § 1839 is assembled from documents that predate the dispute, and it cannot be created afterwards.
[ ] Consider ex parte relief only where the record supports it. Seizure under 18 U.S.C. § 1836 or 15 U.S.C. § 1116(d) is extraordinary, and an application on a thin record damages the case permanently.
[ ] Secure the tooling before serving anything. Notice to a supplier holding your moulds is notice to move them.
- Why. This is the sequencing error that most often makes an otherwise strong case unwinnable.
[ ] [Gate] Confirm continuity of supply before terminating. A termination that stops the product line converts a legal win into a commercial loss, and the supplier knows it.

Phase 12. Cross-border and jurisdictional realities

[ ] Identify the governing law and the seat, and check whether they are workable. A New York governing law clause with litigation in a court that cannot reach the factory is a drafting habit rather than a remedy.
- Why. Enforcement against a foreign manufacturer usually happens at the border, in arbitration, or not at all.
[ ] Prefer arbitration with a seat in a New York Convention state, and provide expressly for interim relief and for emergency arbitrator jurisdiction.
- Why. An award is enforceable against the supplier's assets in most manufacturing jurisdictions; a foreign court judgment often is not.
[ ] Confirm that ownership and assignment terms are valid under the law where the work is performed, including mandatory employee-inventor rules.
- Trap. A perfectly drafted assignment can be void where the engineers actually sit, which is discovered during the dispute rather than the drafting.
[ ] Check export control and technology transfer restrictions on the specifications themselves. Some parameters cannot lawfully be transferred to some destinations regardless of what the agreement says.
[ ] Confirm the origin position for labelling. Where the article is made and how much of its value originates there drives what the label may claim under the FTC Made in USA Labeling Rule, 16 C.F.R. Part 323, and a factory change can invalidate existing packaging.
[ ] Register the brand's marks in the manufacturing jurisdiction, whether or not the brand sells there.
- Why. In a first-to-file country, an unregistered mark can be registered by the supplier or a broker, and the brand can find its own goods blocked at export.
- Trap. This is one of the most common and most expensive omissions in offshore manufacturing, and it is cheap to prevent.
[ ] Record customs positions in each transit and destination market, not only the home market.

Phase 13. The documents this checklist should leave behind

[ ] A manufacturing agreement carrying tooling title, specification ownership, bucketed improvements, a narrowed or absent residuals term, quantity limits with metering, unannounced audit rights, change control, and surviving transfer obligations.
[ ] A tooling register, physically reconciled and photographed, with marking evidence for every tool.
[ ] A specification set in native formats, with assignments from every contributor, held by the brand and refreshed on each engineering change.
[ ] A design filing schedule mapping filings to products, with the first-disclosure date recorded against each.
[ ] A confidentiality architecture record: access lists by name, segregation design, subcontractor agreements, marking practice, and personnel change log.
[ ] A production reconciliation maintained monthly, per product.
[ ] An audit file, with each audit's scope, findings, and remediation, running back at least three years.
[ ] An exit pack: transfer obligations, escrow deposit and verification certificates, transition pricing, and the second-source qualification plan with cost and timeline.
[ ] A board memorandum stating the concentration position and what it would cost and take to change factories.

Nine documents. A business holding them can change factories, enforce against unauthorised production, satisfy a buyer's diligence, and answer an insurer — and the difference between holding them and not is measured in weeks of work rather than in litigation budget.

A note on proportion

Not every relationship warrants this. A commodity component with three interchangeable suppliers and no proprietary content needs a purchase order and nothing else, and applying this checklist to it wastes the credibility needed for the relationships that matter.

Apply it in full where the product is differentiated, the tooling is brand-funded, the process carries real know-how, or the supplier is the only qualified source. Apply the free items everywhere, because marking a tool and holding a specification file cost nothing and are useful in every relationship.

Judge by what a failure would cost. If the loss of the supplier would stop revenue for a quarter, every phase here is proportionate. If it would mean placing an order with a different vendor next week, most of it is not.

A closing note on the relationship

None of this is adversarial, and presenting it that way is the fastest route to having it refused. Good suppliers understand asset registers, change control, and audit programmes, because their other customers already require them; what they resist is being told their honesty is in question.

Explain each provision by its purpose. Tooling marking is an insurance and audit requirement. Change control is a quality requirement. Escrow is a business continuity requirement. Every one of them is true, and every one of them is easier to agree to than a demand framed as protection against the supplier.

Offer reciprocity. Forecast accuracy, payment terms, minimum volumes, and protection of the supplier's own process knowledge are legitimate asks, and an agreement that addresses them is signed materially faster.

And keep the objective in view. The point is not to win the negotiation or to build a file for a case that may never happen. The point is to remain able to make your own product somewhere else — and a supplier confident of the relationship will usually help you get there.

Key Authorities at a Glance

| Authority | Proposition | Where it bites | |---|---|---| | 18 U.S.C. § 1839 | Trade secret definition; reasonable measures element | The audit file and the access register are the evidence | | 18 U.S.C. § 1836 | DTSA civil cause of action; ex parte seizure | Federal forum for supplier misappropriation | | 18 U.S.C. § 1832 | Criminal theft of trade secrets | Referral route in egregious supplier cases | | 17 U.S.C. § 113(b) | Useful article limitation on drawing copyright | Why drawing copyright does not stop the article | | 17 U.S.C. § 101 | Work made for hire definition | Contractor-produced drawings need assignments | | 35 U.S.C. § 102 | Novelty; grace period | Factory samples as disclosures | | 35 U.S.C. § 171 | Design patents | The right that reaches a copied article | | 35 U.S.C. § 271(g) | Importation of products made by a patented process | Reaches offshore use of a patented method | | 19 U.S.C. § 1337 | Section 337 unfair import practices | Exclusion order without jurisdiction over the factory | | 19 U.S.C. § 1526 | Recordation and gray market importation | Precondition to border seizure | | 19 C.F.R. § 133.23 | Restricted gray market articles | The material difference standard at the border | | 15 U.S.C. § 1114 | Infringement of a registered mark | Diverted units with material differences | | 15 U.S.C. § 1116(d) | Ex parte seizure in counterfeiting cases | Where the supplier makes genuine-looking fakes | | Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) | Ordinary observer test for design patent infringement | The copied-article comparison | | Lever Bros. Co. v. United States, 981 F.2d 1330 (D.C. Cir. 1993) | Material differences in gray goods | Overrun units in unauthorised markets | | E.I. du Pont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970) | Precautions proportionate to value | The reasonable measures benchmark | | Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) | Trade secret law coexists with patent law | Choosing secrecy for process parameters | | Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989) | Preemption of state anti-copying statutes | Why contract, not state law, does the work | | Waymo LLC v. Uber Techs., Inc., No. 3:17-cv-00939 (N.D. Cal.) | Departing personnel and downstream use | The people question in a transfer | | UCC § 2-306 | Output and requirements contracts | Quantity terms and the overrun ceiling | | FTC Made in USA Labeling Rule, 16 C.F.R. Part 323 | Origin claims on manufactured goods | What the factory choice does to the label | | Fed. R. Civ. P. 26(c) | Protective orders | Parameter disclosure in litigation |

The five things people get wrong

One: treating payment as ownership. A brand that funded a mould believes it owns the mould, and in most manufacturing jurisdictions the possessor's position is stronger than the payer's. Title, marking, lien waiver, and a right of access are four short provisions, and they are worth more than every other paragraph in the agreement combined. Mark the tools. It is free, and it decides the argument.

Two: signing the residuals clause. It is one sentence, it appears in the supplier's standard form, it looks like boilerplate, and it authorises the reuse of everything the engineers remember — which, for process knowledge, is everything that matters. Strike it, or narrow it to exclude the Tier 1 parameters by name.

Three: relying on drawing copyright. Copyright in an engineering drawing reaches reproduction of the drawing. It does not reach the making of the useful article, which is the limitation 17 U.S.C. § 113(b) preserves. The rights that actually reach a copied article are design registrations, utility claims on the method, and trade secret in the parameters — and the first of those has a filing deadline that the first factory sample starts running.

Four: sending unlimited artwork. Packaging files, authentication features, and label templates transferred without quantity control convert the factory into a self-service printer, and the resulting units are genuine — which is why the trademark claim against them requires a material difference showing rather than a counterfeiting allegation. Meter the components; do not litigate the overruns.

Five: mistaking enforcement for leverage. Every provision in this checklist is enforcement, and enforcement against a factory in another jurisdiction that makes all of your product is a threat you cannot credibly make. A qualified second source is the only measure that changes the balance rather than documenting it, and the businesses that lose in this area are not the ones with weak contracts — they are the ones that cannot leave.