Owning the Next Breakthrough: IP Strategy for South Carolina’s Advanced Manufacturers

South Carolina’s manufacturing economy has long been defined by what it makes: cars, tires, aircraft components, textiles, chemicals, machinery, and more. But the next phase of the state’s growth will be defined not only by what companies make, but by what they innovate.

Across the Palmetto State, manufacturers are adopting robotics, additive manufacturing, artificial intelligence (AI), sensor-enabled equipment, advanced materials, and data-driven systems. These tools are changing how products are designed, produced, monitored, and serviced. They are also creating intellectual property (IP) at a pace many companies may not recognize.

Innovation in manufacturing does not always look like a finished product. It may be an improved production method, tooling and robotics, more durable coatings, or developing predictive software. Those improvements can create significant competitive advantages that should be protected.

From an IP standpoint, innovation can take many forms: a patentable invention, confidential know-how, proprietary software, manufacturing data, product design, brand identity, or a combination of these assets. For manufacturers competing globally, IP protection should be viewed as a portfolio strategy that is integrated with your research, development, and production processes, rather than as a single transaction.

Patent protection may cover new products, technologies, components, formulations, manufacturing methods, or production systems while supporting market position, licensing opportunities, investment, and leverage. But patents require public disclosure. That may make sense when an innovation can be reverse-engineered or when formal exclusionary rights are important. It may be less attractive when the innovation is capable of remaining confidential.

That is where trade secret protection becomes especially important. Manufacturers often have valuable confidential information, such as formulas, tolerances, specifications, production settings, and technical know-how. Trade secrets can last indefinitely, but only if a company takes reasonable steps to maintain secrecy, including confidentiality agreements, employee policies, access controls, cybersecurity measures, and vendor management.

For companies beginning operations in the United States, IP ownership rules differ from country to country. In the U.S., patent rights generally begin with the inventor and should be assigned to the company in writing. In some European and Asian countries, certain employee-created patent rights may belong to the employer by law, but those rights may not automatically move from a foreign subsidiary to a U.S. parent or affiliate. 

Copyright ownership can differ as well. U.S. works created by employees within the scope of employment may qualify as works made for hire, while many European countries treat employee-created works differently and may limit waiver or transfer of moral rights. For foreign manufacturers investing in South Carolina, employment agreements, invention assignments, confidentiality policies, contractor agreements, and intercompany assignments should clearly confirm who owns patents, copyrights, software, technical documentation, trade secrets, data, improvements, and know-how.

Company and employee usage of AI can add further complexity. If a manufacturer uses generative AI for product design, machine programming, documentation, or troubleshooting, it should understand what information is entered into the tool, whether confidential information is shared outside the company, and who owns or can use the output. Sharing confidential information with a public AI tool can create risks involving trade secrets, privilege, patent rights, and discoverability. These risks will need to be managed by the company, and among the company’s partners. 

Further questions arise when manufacturers work with third parties such as automation vendors, software providers, universities, consultants, and joint-development partners. If a supplier helps develop a process, does the manufacturer own it? Can an equipment vendor reuse improvements for your competitors? If university researchers contribute to a new material or testing method, who owns the resulting patent rights? If innovations arise under government funding, the government may have certain rights. These questions should be addressed early on.

A practical IP framework requires collaboration among business leaders, engineers, operations teams, and experienced IP counsel. Companies should identify innovation early, evaluate the right protections, clarify ownership in contracts, and monitor the market.

South Carolina’s manufacturing story has always been about more than buildings and equipment. It is about people, know-how, investment, logistics, and execution. Today, it is increasingly about innovation. The opportunity is not only to make the next breakthrough in South Carolina. The opportunity is to own it.