The Design Is the IP
In custom magnetics, the valuable intellectual property is rarely the schematic — it is the winding structure, the layer arrangement, the gap, the thermal path, and the test limits that make a part work at a given cost. When you send a drawing to a factory, you are handing over that structure. Protecting it is a commercial arrangement backed by a few practical habits, not a legal formality alone.
This guide covers what to put in a mutual NDA for magnetic work, what the NDA will not cover, and the operational controls that actually keep a design from leaking.
What an NDA for Custom Magnetics Should Cover
- Scope of confidential information. Explicitly include drawings, winding sheets, BOMs, core material designations, process parameters, test limits and yields, and cost breakdowns. Winding data is the most valuable and the most commonly omitted category.
- Purpose limitation. Use permitted only for quoting and manufacturing the buyer’s parts, with no right to develop derivative designs.
- Tooling and design ownership. State who owns the bobbin mold, the winding program, and the test fixture, and under what conditions they transfer.
- Residual knowledge clause. Understand whether the counterparty claims rights to unaided memory; if so, negotiate it out or narrow it.
- Duration. Three to five years post-termination is typical for industrial components; trade secrets may be protected longer under applicable law.
- Return or destruction. Written confirmation that drawings and process documents are returned or destroyed at end of program.
What an NDA Will Not Do
An NDA does not stop a factory from reusing a winding technique it already knew, and it does not prevent a competitor from reverse-engineering a part bought on the open market. It also does not protect a design that is fully disclosed in a published datasheet. What it does is create a documented duty of confidence and a remedy if that duty is breached — which is only useful if you can show what was disclosed, to whom, and when.
That evidentiary point is why disclosure logs matter more than the agreement text in practice.
Five Operational Controls
- Stage the disclosure. Send a functional specification first, with the winding detail released only after the NDA is signed and the commercial intent is clear. A full drawing package in the first email is a gratuitous disclosure.
- Mark documents. Every drawing and process sheet carries a confidentiality marking and a document number, so a later dispute has a paper trail.
- Split sensitive information. Core material grade and gap can be specified separately from the layer structure; if the relationship ends, the sensitive part is easier to withdraw.
- Control the tooling. If you pay for the mold, own it in writing, keep the drawing revision under your control, and require the mold to be returned or destroyed on termination.
- Restrict sub-supplier disclosure. Require written approval before the factory shares your drawing with a core or wire supplier beyond what is needed to buy material.
- Second Source Strategy
- How to Write a Transformer RFQ
- Supplier Audit Checklist
- MOQ, Lead Time and Tooling
Clauses That Prevent Arguments Later
Four clauses are worth the negotiation time: a no-clone clause preventing the supplier from selling a substantially similar part to your competitors for a defined period; a change-notification clause requiring written approval before any material or process change; an audit right allowing you to inspect the process on reasonable notice; and a tooling transfer clause naming the price and process for moving the mold to another factory.
Suppliers with a serious program accept all four. A supplier who resists the tooling transfer clause is telling you something about your future leverage.
Related reading
We sign mutual NDAs before technical disclosure, state tooling ownership in the purchase order, and accept a no-clone clause for custom programs. To start a protected technical discussion, write to the Magnetic Core team at sales@sirui-tech.com and we will send our NDA template for review.