Inadequacy of IP control seen in outsourced R&D

Intellectual property controls remain inadequate even as more companies outsource electronics R&D. A new report warns that the situation has been further complicated by the fact that partners can eventually become rivals when research moves to manufacturing.

Multinational firms are setting up global R&D networks across time zones to be closer to manufacturing and to permit round-the-clock R&D. Siemens, for example, located only 51 percent of its 45,000 researchers in Germany. The rest are spread across the globe, a Frost & Sullivan study said.

"In a highly competitive electronics market, time is an important driver of global R&D networks since development time has a direct impact on the revenues and profit generated by a newly developed product," said analyst Vishnu Sivadevan.

Still, electronics manufacturers can eventually emerge as competitors since much of the product development process is in their hands. The increasing capabilities of third-party design houses and manufacturers further complicate global R&D and efforts to protect IP.

With controls on IP rights often inadequate, the study warns that stakeholders must step up efforts to oversee use of their IP.

"In addressing the critical shortfalls of outsourcing R&D, [OEMs] that outsource such activities will have to implement R&D models that protect the company's IP interests," Sivadevan said. "As the industry progresses from outsourcing manufacturing to outsourcing almost everything, companies will have to implement methodologies that protect the R&D landscape of the home country as well as the interests of onshore R&D employees."

- K.C. Krishnadas
EE Times