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How Phillips protected IP by not outsourcing key manufacturing components

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Manufacturing in China always exposes companies to IP leakages. To prevent this, Phillips designed DVD/CD-read/writers in such a way that they could be manufactured in China, but they had to be calibrated in-house. The machine for aligning the lasers and detectors was custom built and never outsourced.

Without a key element in the manufacturing process, even if the factory could copy the design, it could have never (at least no easily) sell the products.

Splitting know-how into different units is a technique that complements the known paths of patents, trademarks, etc. at a core level, avoiding legal fees and very cumbersome processes.

I do think that many semiconductor companies employ the same approaches

Tags: #intellectual-property-protetction #phillips

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Aquiles Carattino
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