Hey partner, can you keep a secret?

By Catherine
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By Catherine Bolgar

Original equipment manufacturers (OEMs) in aerospace and defense depend more than ever on suppliers to deliver innovation. That means sharing information and collaborating closely with third parties.

How can companies protect their intellectual property (IP) in such a fluid environment? The stakes are especially high in aerospace and defense, where technology is key to being competitive and is costly to develop. In addition, the nature of these sectors makes it difficult to apply some of the best practices used elsewhere to protect trade secrets.

“Aerospace and defense companies are somewhat unique in a couple of ways,” says Pamela Passman, president and chief executive officer of the Center for Responsible Enterprise And Trade, or CREATe, a Washington-based nongovernmental organization that helps companies around the world prevent piracy, counterfeiting, trade-secret theft and corruption. “There is the importance of collaboration and sharing across the supply chain” in general, she says. In addition, “there are incentives, at least in the U.S., in Department of Defense procurement to involve small and medium-size enterprises. Increasingly, it’s a highly regulated procurement space. That includes regulations around cyber risk.”

SMEs often are too small and unsophisticated to have adequate cyber and management controls to protect IP, Ms. Passman notes. If they are growing very fast they may not be as rigorous in vetting or training new hires as are some other institutions.

Larger institutions often have someone in charge of protecting IP. “Usually it’s part of the legal or research and development function,” she says. “We recommend having a cross-functional team that includes IP, R&D, cyber security, procurement and supply chain and human resources.”

Human resources’ involvement is important because insiders—who might be direct employees or contractors of either the OEM itself or suppliers—commit a lot of IP theft. A Feb. 2014 report by CREATe and PwC estimated that trade-secret theft amounts to 1%-3% of U.S. gross domestic product. “It’s significant,” Ms. Passman says. The U.S. Federal Bureau of Investigation made a film, “Company Man,” to educate companies about protecting trade secrets.

New hires usually sign agreements not to divulge IP, but those requirements need to be reinforced throughout their employment as well as when they leave the company, she says. That goes not only for employees of OEMs, but also for those of suppliers.

Companies need to be clear about what is protected IP:

It’s only a secret under the law if a company takes reasonable steps to keep it secret,” Ms. Passman points out.

Employees, especially scientists and authors of software, frequently look at their work the way artists do, assembling portfolios of their output to show to prospective employers. The problem is, under most [U.S.] state laws, when the employee creates their work in the course of their employment, the employer owns that work and it sometimes contains trade secrets, says Claude M. Stern, co-chair of the intellectual property litigation practice in the San Francisco office of at Quinn Emanuel Urquhart & Sullivan LLP, an international litigation-only law firm.

Employees might not be acting maliciously or with willful intent, but they would still be subject to a suit, Mr. Stern says, adding, “Companies are relatively rigorous about looking at their markets and who’s doing what. When a company comes up with something out of the blue that’s similar to my secret, I’m going to look at who’s working there.”

One way to protect IP is to be careful about who is privy to it and not to provide all the critical IP to one key supplier. However, companies in specialized sectors like aerospace and defense might not have a multitude of supplier choices. “In the global supply chain, sourcing is very challenging,” Ms. Passman says. “Certain materials or components may only be available in certain parts of the world.”

Companies also have conflicting priorities. While having multiple suppliers might better protect IP, many companies are reducing the number of suppliers in order to cut costs, according to a report by consulting firm Oliver Wymans. Aerospace and defense OEMs are pushing more responsibility and risk onto suppliers, and entrusting them with complete modules and systems, as well as R&D and innovation.

“In order to develop technology, it’s almost inevitable that the developer will disclose trade secrets to its vendor,” Mr. Stern says. “The question is, under what conditions? The protections are, or should be, in the contract.”

Patents help protect IP, but companies also need to protect evolving R&D that isn’t yet ready for patent application, or IP they don’t want to share at all.

Recourse for trade-secret theft can be difficult. The U.S. Defend Trade Secrets Act of 2016 took effect in May, giving companies greater ability to fight IP theft. The law lets companies file civil lawsuits in federal court; previously they had to sue in state courts, where laws varied. The federal government can file criminal charges for trade-secret theft.

The European Council adopted a directive on trade secrets in May to harmonize laws across the EU. Member states have two years to adopt legislation in line with the directive.

Some industries, such as those in mobile phones and business software, sue more frequently than others to protect trade secrets. Defense companies, by contrast, “are frequently, but not always, loath to sue their contractors,” Mr. Stern says. “They’re so close to their partners, they feel it would be mutually assured destruction. But in the appropriate case, we do see lawsuits, even among business partners.”


Catherine Bolgar is a former managing editor of The Wall Street Journal Europe. For more from Catherine Bolgar, contributors from the Economist Intelligence Unit along with industry experts, join the Future Realities discussion.

Photos courtesy of iStock

3 Questions To Mark Harrop, Founder and Managing Director of WhichPLM

By Celia
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Mark Harrop has been interviewed by Celia Newhouse, Marketing Director Consumer Goods & Retail at Dassault Systèmes

Mark Harrop, Founder and Managing Director of WhichPLM

Mark HARROP, Founder and Managing Director of WhichPLM





In the past few months WhichPLM released 2 reports that are absolutely must reads if you are in the business of fashion and technology. The first one is the Annual Review 2014 published in November and if you haven’t gotten your hands on it yet, here it is (click here). The second one is the first Supplier Evaluation of 3DEXPERIENCE Company Dassault Systèmes. What is special about this evaluation is that it doesn’t just look at the technical aspect of the vendor’s technology but studies and assesses areas like R&D roadmap, executive vision and customer satisfaction (yes, they actually called 3DS customers to ask how happy they were!).

I recently talked to Mark Harrop on the phone and asked him 3 questions that I thought I would share with you:

CN: In the 1990’s and years 2000, many fashion brands invested in PLM  and PDM technologies.  Where are these companies standing today and where should they invest tomorrow?

MH:Although some PLM vendors do work extremely hard to build a smooth and robust upgrade path today, the way that PDM/PLM solutions were deployed in the 1990’s and earlier part of the millennium – notably the “toolbox” method – led to a situation where most PLM solutions were tailored to each customer’s needs so extensively that they might as well have been entirely bespoke. Because of this, expectations from the consumer space (the move from Windows 7 to 8, or OSX 10.8 to 10.9) cannot be applied to legacy PDM/PLM implementations, since the numbered version paradigm has in some cases been abandoned.

New PLM customers drawn by the touted reductions in implementation time, the comparatively low cost of ownership, and the potentially rapid “ROI” return on investment – for these customers and others across the market – PLM “OOTB” proven best-practice methodologies has now become essential to the smooth running of any business that depends upon product innovation to meet changing consumer needs.

CN: Do you think that going digital and investing more in technology is essential for apparel companies if they want to remain competitive and why?

MH: Today, I believe that PLM has crossed the chasm, and is beginning to ascend the slope to where we might see peak adoption rates on a global

basis. In previous years we have occasionally referred to PLM as being functionally incomplete, or at least lacking in some of what we consider to

be the essential processes and capabilities. In 2014 customers of PLM can now shop for PLM with confidence, safe in the knowledge that a set of core competencies could be assumed.  PLM today is in the most part considered to be a complete solution, capable of delivering against its ROI promises, and already in the hands of both early adopters and the more forward-thinking members of the broader community. And I expect that things will continue to progress even faster with the growth and integration of E-PLM (Extended-PLM) solutions and the use of PLM as an enterprise backbone for extended integration and data consolidation that has created a situation whereby PLM is rightly considered a true enterprise solution, like ERP – something that is evidenced by the significant market growth seen in recent years.

CN: There is a new generation of users out there that is more technology savvy than the previous one.  Isn’t this a real opportunity for apparel companies to leverage this new generation?

MH: The new generation entering the retail, brands and manufacturing market place has little or no reservations of using “smart” technologies the likes of PLM-E-PLM, in fact if anything they expect to see and use smart technologies in their daily lives. Very pleased to say gone are the days were we had to hold people’s hands whilst operating a mouse for the first time! I’m so certain of this transition that I would even say that people will move from business to business to work on smarter technologies than stay working as “fire fighters” in companies that can’t keep pace with the challenges of operating in an ever faster retail world.

I encourage you to make whichPLM.com a favorite in your browser as well as Consumer Goods & Retail !

Celia NEWHOUSE, Marketing Director, Consumer Goods & Retail Dassault SystèmesCelia NEWHOUSE, Marketing Director, Consumer Goods & Retail Dassault Systèmes





Discover My Collection for Fashion, powered by the 3DEXPERIENCE platform provides brands and retailers with a new approach to collaborative innovation and helps them design the products consumers love, while improving global efficiencies and speed to market by up to 50%. My Unified Development and Sourcing,the integrated fashion PLM part of this solution, helps fashion brands and retailers developing their collections on time, at the right price and with the desired quality.

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Dassault Systèmes Welcomes Quintiq!

By Aurelien
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Quintiq acquisition

We’re delighted to announce earlier today the acquisition of Quintiq, a global leader in supply chain operations planning & optimization. Quintiq comes as a great new addition to the DELMIA Brand, which already saw its scope extended after the acquisition of Apriso last year, bringing the world of Manufacturing Operations Management (MOM).

Who is Quintiq?

Founded in 1997 and headquarted in The Netherlands, Quintiq brings the expertise of just over 800 employees in 16 offices spanning from the US to Europe, Asia and Australia. Quintiq is not only among the global leaders in Supply Chain Management, but has demonstrated a tremendous growth dynamic in the past years (the fastest growing company in the SCM space).



What does Quintiq do?

I found the Slideshare below very interesting to get an understanding of the context and rationale behind the need for customer-centric supply chain management:

With this context in mind, Quintiq solves complex business operations planning challenges ranging from…

Quintiq coverage

Watch this video to see more examples of the operations covered by Quintiq:

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What does Quintiq bring to 3DS and the 3DEXPERIENCE Platform?

Dassault Systèmes’ goal is to enable our clients “to create delightful experiences for their ultimate customers or consumers”. Quintiq complements our existing offering to help our clients deliver the perfect end-user experience, on time, on cost and on expectation. In fact, the value Quintiq brings to the 3DEXPERIENCE is so significant that we decided to evolve DELMIA’s current footprint in the world of production into “Global Industrial Operations”.

From an industry coverage perspective, Quintiq increases DELMIA’s offerings for new industries such as primary metals, mining, oil & gas, rail, logistics, and workforce-intensive services industries (such as delivery, rail transportation or air traffic control).

You can find back Quintiq on social networks on Twitter, Facebook and LinkedIn.

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