Key Takeaways: Vertical integration and in-house manufacturing can provide aerospace companies with greater control over supply chains and manufacturing capacity while creating new opportunities for innovation. To maximize the value of those innovations, aerospace companies should develop a comprehensive IP strategy that uses patents, trade secrets (including technical know-how), and contractual protections as complementary tools to protect competitive advantages throughout a technology’s lifecycle.
As aerospace companies confront constrained supply chains and increasingly complex manufacturing requirements, some are seeking greater control over the processes needed to turn advanced designs into flight-ready hardware by bringing manufacturing in-house. That shift does more than secure supply. It can also produce new, protectable innovations that call for a deliberate IP strategy.
In-house production can improve quality control and enable faster prototyping, faster iteration, and greater agility and flexibility. For example, in an October 14, 2026 development update on its Neutron rocket, Rocket Lab described moving from a manual process performed by a third party to an in-house automated fiber placement process, along with further improvements addressing voids between carbon-fiber layers. Rocket Lab, which announced that Neutron’s inaugural launch is now expected in 2027, illustrates how bringing a process in-house can give a company direct control over refining it.
Control over manufacturing capacity is another driver. For example, on September 8, 2026, GE Aerospace announced an agreement to acquire Consolidated Precision Products for $11.75 billion. GE Aerospace’s CEO stated that the acquisition is expected “to expand capacity, improve performance, and accelerate new engine technologies for the current fleet and next-generation platforms.”
Supply-chain security is a third. According to an August 30, 2026 report, SpaceX plans to bring casting of parts for natural-gas turbines in-house to avoid production delays associated with constrained turbine-part manufacturing.
These examples illustrate another potential benefit of vertical integration: bringing manufacturing capabilities in-house can create opportunities for additional innovation. As aerospace companies assume responsibility for manufacturing processes previously handled by suppliers, they may encounter and solve technical challenges involving materials, tooling, automation, testing, quality control, and production efficiency. Those solutions can become valuable intellectual property, making IP strategy an important component of a company’s vertical integration strategy.
Building an IP Strategy for In-House Manufacturing
Aerospace companies should develop a comprehensive IP strategy for identifying, protecting, and potentially monetizing innovations that arise from in-house manufacturing.
Patents
Technologies incorporated into an end product that can be readily observed or reverse engineered are often well suited for patent protection because patents provide enforceable rights to exclude others from practicing the claimed invention even after the patented technology becomes publicly known. Patent protection involves tradeoffs, however, including public disclosure and a limited term of enforceability. Once the patents expire, competitors are generally free to practice the invention, subject to any other IP rights or contractual restrictions.
Trade Secrets and Know-How
Other innovations may be better suited for protection as trade secrets or proprietary technical know-how. Manufacturing processes, process parameters, tooling techniques, testing parameters, calibration methods, and other technologies that cannot readily be determined by examining the finished product often retain value because competitors cannot observe them. Vertical integration can make such protection particularly valuable for companies that control manufacturing, testing, operation, maintenance, and other stages of a product’s lifecycle. Unlike patents, qualifying trade secrets can remain protected indefinitely, so long as the information remains secret, derives value from that secrecy, and is subject to reasonable measures to keep it confidential. Control over the full product lifecycle can make those reasonable measures easier to maintain.
Contractual Protections
Contracts add a further safeguard when proprietary technology is shared outside the company. Supply, joint-development, manufacturing, licensing, and maintenance or service agreements can:
- identify the proprietary technology and information subject to contractual protection;
- impose confidentiality and use restrictions on proprietary technical information;
- define ownership of improvements and newly developed intellectual property; and
- provide remedies for breach.
Such agreements can also be structured to address risks associated with challenges to licensed intellectual property or development of competing technologies.
Practical Next Steps
As manufacturing moves in-house, aerospace companies should consider building IP protection into the integration process from the start:
- Capture process innovations as they arise, using invention-disclosure practices tailored to manufacturing and engineering teams.
- Decide early whether each innovation is better protected by patent or as a trade secret, including considering whether it can be observed or reverse engineered from the finished product.
- Update supplier, partner, and licensing agreements to reflect new ownership, confidentiality, and use requirements.
Treating IP strategy as an integral part of vertical integration, rather than an afterthought, can help aerospace companies protect their competitive advantages throughout a technology’s lifecycle.
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