Tools, Tooling, Dies, Jigs, Stamps & Moulds

In many manufacturing and OEM agreements, the contract manufacturer needs to make special tooling, industrial moulds and stamps, jigs, dies, etc. There are multiple issues with these components:-

  • first, the contracting party often pays for making them;
  • second they often incorporate aspects of the contracting party’s intellectual property;
  • third, they may be expensive and time consuming to replace; and
  • fourth, possession and control over them may enable counterfeiting and backdoor sales.

As a result it is not unusual for the contracting party to retain ownership and control over tools, tooling, dies, jigs and moulds. It is also common to provide that if the manufacturer is changed for the products, that they must be turned over without delay to the new manufacturer and if manufacture terminated, verifiably destroyed. They are commonly referred to in contracts with the defined terms ‘Tools,’ ‘Tooling’ or ‘Tools & Dies.’

Related Terms