Tech Transfer Leakage

Risk Vector

Loss of control over technical drawings or software code can occur when domestic employees move to competing firms. Some local partners use the shared knowledge to improve their own product lines or build parallel businesses. Another issue arises when subcontractors are given access to designs without having signed confidentiality agreements.

These practices undermine the value of the original technology license and can result in the loss of global market share.

Contractual Shield

Mitigation of tech transfer leakage requires the inclusion of formal confidentiality clauses in technology transfer agreements. These clauses must define the specific individuals who are authorized to access the proprietary drawings or source codes. The contract should also include heavy financial penalties for any unauthorized reuse of the technical data.

Sourcing firms can use non-disclosure and non-compete agreements to bind principal employees of the local partner.

Technical Protection

Physical and digital barriers are necessary to protect sensitive designs on the factory floor. This involves using secure servers located outside the local network or restricting access to specific files. Compartmentalizing production steps prevents any single supplier from understanding the entire manufacturing process.

Regular audits of the partner’s security systems can help identify vulnerabilities before any loss occurs.