intellectual-property, internationalOur company manufactures and sells an artistic product in the United States.
Another company wants to manufacture and sell our product in Europe, paying us a royalty for each copy they make.
How can we trust how many copies they’ve made?
If they send us a check for 100 royalty payments, how do we know they only made 100 copies?
10 years ago I own a software solution which was a revolution, a manufacturer soon contacted me to use my solution for their product which sells to US and Europe, I was having the same question like you that time.
I asked them to have all the productions with my label, so I can see it on every product that sold from their customers. You can have unique identification numbers on the label, or design a laser label.
By doing this way, you can also think about have serial number on every label, this will help you tracking when and what number is going to where.
It has been long I thought I was selling labels, they ordered labels from me over four years.
You need a representative outside the manufacturing company to represent you. That person would have the responsibility of checking up on the manufacturer as if you did it your self. Your risk is that the person is more loyal to the manufacturer than you. To reduce that risk you can hire a person who represents several other companies in that capacity. Just make sure none of your competitors are also represented by that person. This is a common practice. Before hiring make sure the person is capable of doing the necessary checking and reporting back to you.
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