In Original Equipment Manufacturing (OEM) relationships, a critical and often complex question arises: who owns the design molds and tooling after production is complete? The straightforward answer is: it depends entirely on the contractual agreement between the client (the brand owner) and the manufacturer. There is no universal default rule.

Typically, ownership is determined by who pays for the development and creation of these custom molds and tooling. If the client funds 100% of the tooling costs, they have a strong claim to ownership. However, many manufacturers propose cost-sharing models, where they cover the initial tooling investment in exchange for a lower per-unit price over a specified production volume. In such cases, ownership might transfer to the client only after a certain order quantity is fulfilled, or it might remain with the manufacturer.

The contract is paramount. A well-drafted OEM agreement must explicitly state the ownership, storage rights, maintenance responsibilities, and usage restrictions for all molds and tooling. It should also address scenarios like contract termination, transfer of ownership, and what happens if the manufacturer uses the same tooling for another client—a serious breach of intellectual property if the design is client-specific.

Therefore, to secure your rights, clear negotiation and precise contractual language are non-negotiable. Always specify that all custom molds, tooling, and associated design intellectual property are your exclusive property, paid for by your investment. Conduct regular audits and ensure physical control or verifiable documentation is in place. Ultimately, owning the tooling provides significant leverage, protects your design from being replicated for competitors, and ensures long-term supply chain stability. Never assume ownership; always explicitly contract for it.