OEM Suppliers Use Their IP To Protect Against Corporate Mergers

Intellectual property comes in handy in many ways. There is of course the traditional example of protecting the owner from competitive products. Another less considered situation is where it protects the owner from their customer making a supply base change. In the global corporate world, major OEMs sometimes consolidate, looking for costs savings by increasing volume and reworking the supply base equation. Consider the recent example of GM's European division Opel transferring to PSA/Citroen. Suppliers may utilize their IP to reduce the ability of the new owner moving parts business to a different supplier. In such a case, even very specific and narrow patents can be blocking if they cover the part as produced for the OEM. Even if design-arounds are available, re-certification and testing requirements often financially preclude such options as the costs to change cancel any savings by switching the supplier.

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