China Outsourcing:

A TECHNOLOGY-BASED STRATEGY FOR MANUFACTURE OF GOODS FOR THE D0MESTIC AND GLOBAL MARKETS*

I. OVERVIEW

Outsourcing the manufacture of products to China is an idea that is currently in operation or one that is being considered for virtually every labor-intensive product by virtually every western company. This paper looks at the technology-driven intellectual property aspects of outsourcing both in terms of how to maintain protection of trade secrets and other proprietary rights as well as to permit a business evaluation of the costs and demerits of outsourcing. Thus, while the traditional methods of border enforcement and trademark infringement actions can certainly be used in some situations where technology has been pirated, often stolen technology will be embodied in different clothing that the original manufacturer’s garb so that such traditional modes of enforcement will be difficult. Or, where the exact product is knocked off, then both sets of weapons may be utilized.