IP risk in the supply chain

Where the exposure sits

Making, using, offering for sale, selling and importing are all infringing acts. If a bought-in component or process falls within someone's claims, your product infringes when you sell it - whoever manufactured the part.

Supplier terms typically warrant against defects, not against patent infringement. An IP indemnity has to be negotiated, and it is far easier to obtain before volume commitments than after a letter arrives.

What to do about it

Scope freedom to operate studies to the whole product, including bought-in elements. List them explicitly and confirm they were in scope.

Negotiate IP indemnities with the suppliers of the components that carry real risk - not all of them, just the ones where a third-party right would stop your product.

And re-run the check when a supplier changes. A component substitution made for cost or availability reasons can move you inside somebody's claims without anyone in the business realising a legal question has arisen.

What to actually do

• You infringe by selling, whoever made the component.
• Read the supplier warranty - defects and IP are different clauses.
• Scope FTO to the whole product, listing bought-in elements.
• Re-run the check whenever a supplier or component changes.