# Who Owns Contract Manufacturer Tooling and Process Data?

> Contract manufacturer IP ownership explained with real manufacturing and OEM agreement clauses: who owns the tooling, process sheets, test programs and improvements, and what AI buyers can license.

Canonical: https://origindatapartners.com/guides/contract-manufacturer-design-data-ai
By: Origin Data Partners
Status: Published
Published: 2026-11-13
Updated: 2026-11-13
Sources checked: 2026-11-12

## Quick answer

A contract manufacturer cannot license its customers' product designs, but it often owns its own process knowledge: work instructions, fixture designs, test programs, yield and rework records. Real manufacturing agreements differ on tooling. Some give product-specific tooling and its design documents to the customer; seller-friendly terms keep tooling with the manufacturer. Improvements to the manufacturer's own process usually stay its own, sometimes with use limits.

## Key points

- Customer designs are out: AI buyers ask for designs the company owns, not customer IP.
- Who owns the tooling depends on who paid for it and what the agreement says; read the tooling clause.
- Process improvements a manufacturer develops are often its own, but some agreements limit their use to the customer's products.
- Owning a record and being free to license it are different: check confidentiality and use clauses too.

## Contract manufacturer IP ownership: what is yours and what is the customer's?

Customer drawings, models, specifications and firmware belong to the customer and stay out of any license. What a contract manufacturer may own is the know-how of making things: how a line is set up, how a board is tested, how a defect was traced and fixed. The manufacturing or OEM agreement decides which of those records are yours, and whether you may use them outside that customer's work.

That split matches what AI buyers say. Mercor's hardware listing asks for "Designs the company owns, not customer IP" and lists "Designs owned by your customers" as not a fit ([Mercor](https://data.mercor.com/refer/view/?slug=hardware)).

General information only, not legal advice: each statement below quotes a published agreement, and the agreement you signed governs your records.

| Record | Usually owned by | Licensable without the customer? |
| --- | --- | --- |
| Customer CAD, drawings, BOMs, firmware | The customer | No |
| Process sheets and work instructions you wrote | The manufacturer, unless the agreement assigns them | Often, with customer part details removed |
| Fixture, jig and test-fixture designs | Depends on who paid and the tooling clause | Only if the tooling clause leaves them with you |
| Test programs and test-station software | The manufacturer if built on its platform; check product-unique parts | Often for the generic platform; not the customer-specific limits |
| Yield, scrap and rework records | The manufacturer's records about customer products | Usually only de-identified, and subject to confidentiality |
| DFM feedback sent to customers | Shared: your analysis of their design | Rarely; it reveals the customer design |


## Who owns the tooling? Three real clauses

There is no single default. Three published agreements show the range:

| Agreement | What it says about tooling | Effect on your archive |
| --- | --- | --- |
| iRobot and Kin Yat manufacturing services agreement ([SEC exhibit](https://www.sec.gov/Archives/edgar/data/1159167/000115916719000010/irbtexhibit1015122918.htm)) | "Tooling that is designed and fabricated specific to manufacture, assembly, inspection or testing of iRobot Product is the sole property of iRobot, including related design documentation"; equipment the manufacturer buys "shall become the property of iRobot once Kin Yat is reimbursed for all NRE Costs" | Product-specific fixture and test-tooling designs belong to the customer |
| Parker-Hannifin offer of sale ([Parker](https://distranet.blob.core.windows.net/assets/parker/Literature%20and%20Reference%20Materials/Terms%20and%20Conditions%20&%20Confidentiality%20agreements/Parker-Offer-of-Sale.pdf)) | "Special Tooling shall be and remain Seller's property. In no event will Buyer acquire any interest in the Special Tooling", even where the buyer paid tooling charges | Tooling designs stay with the manufacturer |
| GE Aerospace purchase terms ([GE Aerospace](https://www.geaerospace.com/sites/default/files/GE-PO-Terms.pdf)) | Purchaser property includes "equipment, materials, bailed items, samples, parts, tooling, tooling drawings, and software", usable only "for the sole purpose of performing its obligations under this Agreement" | Customer-furnished tooling and drawings cannot be reused or licensed |

Whose paper governs matters: a supplier's quote terms and a customer's purchase terms often conflict, and the order of precedence in your master agreement decides which wins.


## Who owns process improvements and manufacturing know-how?

Often the manufacturer, with conditions. In the JDS Uniphase and Fabrinet agreement, "New Process Technology" covers "any processes, procedures, methods, tooling, fixtures" relating to manufacture, and "Supplier shall own all New Process Technology developed solely by Supplier, or jointly by JDSU and Supplier." ([SEC exhibit](https://www.sec.gov/Archives/edgar/data/1408710/000119312510008031/dex1027.htm)).

The iRobot agreement shows how ownership and freedom to use can come apart. Kin Yat's manufacturing information includes "(ii) copies of all inspection, manufacturing, test and quality control procedures and any other work processes; (iii) jig, fixture and tooling designs", and "Kin Yat shall retain all right, title and ownership to any and all Intellectual Property – Created by Kin Yat". Yet product-unique information "will be used by Kin Yat solely for the design, development, testing and manufacturing of Products for iRobot", and newly created product IP is treated as "works made for hire" for iRobot ([SEC exhibit](https://www.sec.gov/Archives/edgar/data/1159167/000115916719000010/irbtexhibit1015122918.htm)).

Design-services forms reserve the same zone for the manufacturer. Flex keeps its background property: "Flex's Intellectual Property Rights, know how, design tools, methodologies, software, algorithms, or other means" used to design, make or test products ([Flex](https://flex.com/downloads/corporate-design-services-agreement-dsa)).


## Manufacturing agreement and OEM agreement: clauses to read before licensing

Before anything is offered to an AI buyer, pull every active and past manufacturing agreement, OEM agreement and supply agreement and note these clauses for each customer:

- Definitions of customer IP, supplier IP, background and foreground IP, and new process technology.
- The tooling clause: who pays, who owns, and whether design documentation goes with the tool.
- Any limit on using product-unique process information for other customers or other purposes.
- Confidentiality: how long it lasts after the agreement ends, and whether de-identified records are excluded.
- Records and audit clauses that require you to keep, return or destroy records at the end.
- Export and trade-compliance schedules; controlled programs go through the [export-control checklist](https://origindatapartners.com/guides/itar-ear-checklist-cad-data-ai) first.


## When a customer program ends or moves to another factory

End-of-program clauses matter as much as ownership clauses, because that is when old records start to look like a spare asset. Customer property normally goes back on request: GE's terms say "Upon Purchaser's written request, Seller shall remove and deliver Purchaser's Property to Purchaser" ([GE Aerospace](https://www.geaerospace.com/sites/default/files/GE-PO-Terms.pdf)). Transfer clauses in larger agreements can also oblige the manufacturer to hand product-unique process documents to the customer or a new supplier.

What normally remains after a transfer is the manufacturer's general method: its standard work-instruction formats, its test platform, its fixture design rules and its own yield history across many products. Those are the records to inventory before a plant closes, a line is retired or the business is sold.

- Return or destroy customer files as the agreement requires, and keep a written log of what went back.
- Keep your own process standards, generic test code and cross-customer statistics, de-identified, in a separate archive.
- If the whole company is winding down, read [a hardware company closing: what to do with the CAD archive](https://origindatapartners.com/guides/hardware-company-closing-cad-archive).


## What AI buyers want from a contract manufacturer

Two kinds of records. Linked quality chains (inspection, non-conformance, root cause, fix, measured result) are covered in [licensing manufacturing quality records](https://origindatapartners.com/guides/license-manufacturing-quality-records-ai). Engineering files the manufacturer designed itself (fixtures, test stations, automation cells, in-house products) fit CAD buyers: Mercor's hardware listing covers "CAD assemblies, circuit designs and test results from real products" ([Mercor](https://data.mercor.com/refer)). Mercor's Hardware Engineering Company listing publishes a company range of $45K to $1.3M ([Mercor](https://data.mercor.com/refer/view/?slug=hardware)). That is a buyer program's published range, not a closed deal, and it excludes customer-owned designs.

A plant that also makes its own branded products usually holds the most licensable CAD. For the wider view of what a manufacturer holds, see [data licensing for manufacturers](https://origindatapartners.com/who-we-help/manufacturers).

Estimate an archive with the [CAD archive calculator](https://origindatapartners.com/tools/cad-archive-value) or [send it to Origin for a valuation](https://origindatapartners.com/check-fit).


## How a contract manufacturer should describe its data

A buyer first needs to see the rights picture, so describe the archive by ownership, not by folder:

- Your own designs: fixtures, test stations, automation and any in-house products, with CAD system and assembly counts.
- Process records: work instructions, routings, test programs and change records, with years and product families covered.
- Quality and yield history: how many years, and whether records link from defect to fix.
- Customer-linked material: which customers, which agreements allow de-identified use, which forbid it.
- Small job shops with CAM archives should read the [machine shop guide](https://origindatapartners.com/guides/machine-shop-cnc-cam-files-ai); firms that design products for clients should read [who owns the client's CAD files](https://origindatapartners.com/guides/product-design-consultancy-client-cad-files).


## What manufacturers have been paid for their data

[A 47-person manufacturer was paid $730,000](https://origindatapartners.com/case-studies/manufacturer-quality-records-730000) for licensing work instructions, quality and nonconformance reports, maintenance logs and engineering change records.

These are deals Origin helped place. Company and buyer names stay private, and each is an individual outcome, not a forecast for another company: what a buyer pays depends on the records, rights, demand and agreed scope. See [all case studies](https://origindatapartners.com/case-studies).

| Company, anonymized | Records licensed | Payment received |
| --- | --- | --- |
| Manufacturer (47 people) | Work instructions, quality and nonconformance reports, maintenance logs and engineering change records | $730,000 |


## Next step

List the agreements for your five largest customers and mark, clause by clause, who owns tooling, process improvements and records. Then count the fixture, test and automation designs your own engineers made. That inventory shows which part of your archive is yours to offer.

Does your company hold records like these? [See what your data is worth](https://origindatapartners.com/check-fit).

Origin Data Partners works with companies that own data and helps get it bought. We are independent of the services on this page, and a buyer may pay us when a deal closes ([how Origin is paid](https://origindatapartners.com/referral-disclosure)). [See what your data is worth](https://origindatapartners.com/check-fit).


## Questions and answers

### Can a contract manufacturer license customer designs for AI training?

No, not without the customer's written consent. Customer drawings, models, BOMs and firmware belong to the customer and are usually confidential. AI buyers say the same thing: Mercor's hardware listing asks for designs the company owns and lists designs owned by customers as not a fit.

### Who owns the tooling in a contract manufacturing agreement?

Whoever the agreement says. In the iRobot and Kin Yat agreement, product-specific tooling and its design documentation belong to iRobot. Parker-Hannifin's seller terms keep special tooling with the seller even when the buyer pays tooling charges. Read the tooling clause and which document takes precedence.

### Who owns process improvements made by a contract manufacturer?

Often the manufacturer. The JDSU and Fabrinet agreement gives the supplier new process technology it developed alone or jointly. Some agreements add limits: iRobot's lets Kin Yat keep the IP it creates but restricts product-unique manufacturing information to iRobot products.

### What is an OEM agreement, and does it affect data rights?

An OEM agreement is a contract under which one company makes products sold under another company's brand. Its IP, tooling and confidentiality clauses decide data rights the same way a manufacturing agreement does. Check definitions of background and foreground IP and any limit on using product-specific information.

### What data does a contract manufacturer own that AI buyers want?

Designs its own engineers made, such as fixtures, test stations and automation, plus process records: work instructions, test programs, yield and rework history and change records. Quality chains that link a defect to its root cause and measured fix are especially useful, once customer details are removed.

### Can we license yield and rework records about customer products?

Sometimes, in de-identified form. The records are yours, but they describe the customer's product, so confidentiality clauses apply. Remove part numbers, customer names and design details, and check whether the agreement excludes de-identified or aggregated data from its confidentiality terms before including them.

## Sources

- [SEC exhibit 10.15: Manufacturing Services Agreement, Kin Yat Industrial and iRobot](https://www.sec.gov/Archives/edgar/data/1159167/000115916719000010/irbtexhibit1015122918.htm)
- [SEC exhibit 10.27: Primary Contract Manufacturing Agreement, JDS Uniphase and Fabrinet](https://www.sec.gov/Archives/edgar/data/1408710/000119312510008031/dex1027.htm)
- [Parker-Hannifin: Offer of Sale (seller terms)](https://distranet.blob.core.windows.net/assets/parker/Literature%20and%20Reference%20Materials/Terms%20and%20Conditions%20&%20Confidentiality%20agreements/Parker-Offer-of-Sale.pdf)
- [GE Aerospace: Terms and Conditions of Purchase (GO64, revised 10 Oct 2025)](https://www.geaerospace.com/sites/default/files/GE-PO-Terms.pdf)
- [Flex: Design Services Agreement (published form)](https://flex.com/downloads/corporate-design-services-agreement-dsa)
- [Mercor Data: Hardware Engineering Company listing](https://data.mercor.com/refer/view/?slug=hardware)
- [Mercor Data: Refer a company (listing cards)](https://data.mercor.com/refer)

## Related reading

- [License Manufacturing Quality Records to AI Companies](https://origindatapartners.com/guides/license-manufacturing-quality-records-ai)
- [/who-we-help/manufacturers](https://origindatapartners.com/who-we-help/manufacturers)
- [Licensing CAD files and engineering data to AI companies](https://origindatapartners.com/guides/license-cad-engineering-data-ai)
- [/tools/cad-archive-value](https://origindatapartners.com/tools/cad-archive-value)
- [Who Owns CNC Programs and G-Code? Machine Shop Files and AI](https://origindatapartners.com/guides/machine-shop-cnc-cam-files-ai)
- [Who Owns CAD Files: the Design Consultancy or the Client?](https://origindatapartners.com/guides/product-design-consultancy-client-cad-files)
- [ITAR and EAR Checklist Before You Share CAD Files With AI](https://origindatapartners.com/guides/itar-ear-checklist-cad-data-ai)
- [Hardware Startup Shutdown: What Happens to the CAD Archive](https://origindatapartners.com/guides/hardware-company-closing-cad-archive)
- [Manufacturers and fabrication shops: get paid to record assembly and welding work](https://origindatapartners.com/physical-ai/manufacturing)
- [CAD Data and Quality Records for AI: Manufacturer Guide](https://origindatapartners.com/guides/engineered-product-manufacturer-data)
- [Engineering Change Order (ECO): Template and Process](https://origindatapartners.com/guides/engineering-change-order-template)
- [Non-Conformance Report (NCR): Template and Examples](https://origindatapartners.com/guides/non-conformance-report-template)