diff --git a/src/ScadaLink.TemplateEngine/Flattening/FlatteningService.cs b/src/ScadaLink.TemplateEngine/Flattening/FlatteningService.cs
index e018283..edc32ed 100644
--- a/src/ScadaLink.TemplateEngine/Flattening/FlatteningService.cs
+++ b/src/ScadaLink.TemplateEngine/Flattening/FlatteningService.cs
@@ -54,6 +54,17 @@ public class FlatteningService
 
         try
         {
+            // Step 0: Validate LockedInDerived isn't violated by any chain.
+            var lockError = ValidateLockedInDerived(templateChain);
+            if (lockError != null)
+                return Result<FlattenedConfiguration>.Failure(lockError);
+            foreach (var composedChain in composedTemplateChains.Values)
+            {
+                lockError = ValidateLockedInDerived(composedChain);
+                if (lockError != null)
+                    return Result<FlattenedConfiguration>.Failure(lockError);
+            }
+
             // Step 1: Resolve attributes from inheritance chain (most-derived-first wins for same name)
             var attributes = ResolveInheritedAttributes(templateChain);
 
@@ -124,7 +135,10 @@ public class FlatteningService
     {
         var result = new Dictionary<string, ResolvedAttribute>(StringComparer.Ordinal);
 
-        // Walk from base (last) to most-derived (first) so derived values win
+        // Walk from base (last) to most-derived (first) so derived values win.
+        // IsInherited rows on a derived template are placeholders that should
+        // not shadow the live base value; they only contribute a row when the
+        // base lacks one.
         for (int i = templateChain.Count - 1; i >= 0; i--)
         {
             var template = templateChain[i];
@@ -132,9 +146,13 @@ public class FlatteningService
 
             foreach (var attr in template.Attributes)
             {
-                // If a parent defined this attribute as locked, derived cannot change the value
-                if (result.TryGetValue(attr.Name, out var existing) && existing.IsLocked)
-                    continue;
+                if (result.TryGetValue(attr.Name, out var existing))
+                {
+                    if (existing.IsLocked)
+                        continue;
+                    if (attr.IsInherited)
+                        continue;
+                }
 
                 result[attr.Name] = new ResolvedAttribute
                 {
@@ -152,6 +170,42 @@ public class FlatteningService
         return result;
     }
 
+    /// <summary>
+    /// Reports any LockedInDerived violations across the chain — i.e., a base
+    /// attribute/script marked LockedInDerived that a downstream derived
+    /// template overrides (IsInherited=false). Returns null on success or an
+    /// error message describing the first offending entries.
+    /// </summary>
+    private static string? ValidateLockedInDerived(IReadOnlyList<Template> templateChain)
+    {
+        var attrLocks = new Dictionary<string, Template>(StringComparer.Ordinal);
+        var scriptLocks = new Dictionary<string, Template>(StringComparer.Ordinal);
+        var errors = new List<string>();
+
+        for (int i = templateChain.Count - 1; i >= 0; i--)
+        {
+            var template = templateChain[i];
+
+            foreach (var attr in template.Attributes)
+            {
+                if (attr.LockedInDerived)
+                    attrLocks[attr.Name] = template;
+                else if (!attr.IsInherited && attrLocks.TryGetValue(attr.Name, out var lockingTemplate) && lockingTemplate.Id != template.Id)
+                    errors.Add($"Attribute '{attr.Name}' is LockedInDerived by base template '{lockingTemplate.Name}' and cannot be overridden by '{template.Name}'.");
+            }
+
+            foreach (var script in template.Scripts)
+            {
+                if (script.LockedInDerived)
+                    scriptLocks[script.Name] = template;
+                else if (!script.IsInherited && scriptLocks.TryGetValue(script.Name, out var lockingTemplate) && lockingTemplate.Id != template.Id)
+                    errors.Add($"Script '{script.Name}' is LockedInDerived by base template '{lockingTemplate.Name}' and cannot be overridden by '{template.Name}'.");
+            }
+        }
+
+        return errors.Count == 0 ? null : string.Join(" ", errors);
+    }
+
     private static void ResolveComposedAttributes(
         IReadOnlyList<Template> templateChain,
         IReadOnlyDictionary<int, IReadOnlyList<TemplateComposition>> compositionMap,
@@ -343,8 +397,13 @@ public class FlatteningService
 
             foreach (var script in template.Scripts)
             {
-                if (result.TryGetValue(script.Name, out var existing) && existing.IsLocked)
-                    continue;
+                if (result.TryGetValue(script.Name, out var existing))
+                {
+                    if (existing.IsLocked)
+                        continue;
+                    if (script.IsInherited)
+                        continue;
+                }
 
                 result[script.Name] = new ResolvedScript
                 {
diff --git a/src/ScadaLink.TemplateEngine/TemplateService.cs b/src/ScadaLink.TemplateEngine/TemplateService.cs
index d29547a..a1dec64 100644
--- a/src/ScadaLink.TemplateEngine/TemplateService.cs
+++ b/src/ScadaLink.TemplateEngine/TemplateService.cs
@@ -264,6 +264,16 @@ public class TemplateService
             if (parentMember != null && parentMember.IsLocked)
                 return Result<TemplateAttribute>.Failure(
                     $"Attribute '{existing.Name}' is locked in parent and cannot be overridden.");
+
+            // Derived templates may not override fields the base marked LockedInDerived.
+            if (template.IsDerived)
+            {
+                var baseTemplate = await _repository.GetTemplateByIdAsync(template.ParentTemplateId.Value, cancellationToken);
+                var baseAttr = baseTemplate?.Attributes.FirstOrDefault(a => a.Name == existing.Name);
+                if (baseAttr != null && baseAttr.LockedInDerived)
+                    return Result<TemplateAttribute>.Failure(
+                        $"Attribute '{existing.Name}' is locked by base template '{baseTemplate!.Name}' and cannot be overridden.");
+            }
         }
 
         // Validate lock change rules
@@ -282,6 +292,10 @@ public class TemplateService
         existing.IsLocked = proposed.IsLocked;
         existing.DataType = proposed.DataType;
         existing.DataSourceReference = proposed.DataSourceReference;
+        if (template?.IsDerived == true)
+            existing.IsInherited = proposed.IsInherited;
+        else
+            existing.LockedInDerived = proposed.LockedInDerived;
 
         await _repository.UpdateTemplateAttributeAsync(existing, cancellationToken);
         await _auditService.LogAsync(user, "Update", "TemplateAttribute", attributeId.ToString(), existing.Name, existing, cancellationToken);
@@ -493,6 +507,16 @@ public class TemplateService
             if (parentMember != null && parentMember.IsLocked)
                 return Result<TemplateScript>.Failure(
                     $"Script '{existing.Name}' is locked in parent and cannot be overridden.");
+
+            // Derived templates may not override scripts the base marked LockedInDerived.
+            if (template.IsDerived)
+            {
+                var baseTemplate = await _repository.GetTemplateByIdAsync(template.ParentTemplateId.Value, cancellationToken);
+                var baseScript = baseTemplate?.Scripts.FirstOrDefault(s => s.Name == existing.Name);
+                if (baseScript != null && baseScript.LockedInDerived)
+                    return Result<TemplateScript>.Failure(
+                        $"Script '{existing.Name}' is locked by base template '{baseTemplate!.Name}' and cannot be overridden.");
+            }
         }
 
         // Validate fixed fields
@@ -508,6 +532,10 @@ public class TemplateService
         existing.ParameterDefinitions = proposed.ParameterDefinitions;
         existing.ReturnDefinition = proposed.ReturnDefinition;
         existing.IsLocked = proposed.IsLocked;
+        if (template?.IsDerived == true)
+            existing.IsInherited = proposed.IsInherited;
+        else
+            existing.LockedInDerived = proposed.LockedInDerived;
         // Name is NOT updated (fixed)
 
         await _repository.UpdateTemplateScriptAsync(existing, cancellationToken);
diff --git a/tests/ScadaLink.TemplateEngine.Tests/Flattening/FlatteningServiceTests.cs b/tests/ScadaLink.TemplateEngine.Tests/Flattening/FlatteningServiceTests.cs
index 941e9cb..07ff458 100644
--- a/tests/ScadaLink.TemplateEngine.Tests/Flattening/FlatteningServiceTests.cs
+++ b/tests/ScadaLink.TemplateEngine.Tests/Flattening/FlatteningServiceTests.cs
@@ -262,4 +262,112 @@ public class FlatteningServiceTests
         Assert.Equal(5, result.Value.SiteId);
         Assert.Equal(3, result.Value.AreaId);
     }
+
+    [Fact]
+    public void Flatten_InheritedAttributeOnDerived_BaseValueWins()
+    {
+        var baseTemplate = CreateTemplate(2, "Sensor");
+        baseTemplate.Attributes.Add(new TemplateAttribute("SetPoint") { DataType = DataType.Double, Value = "100.0" });
+
+        var derived = CreateTemplate(1, "Pump.TempSensor", parentId: 2);
+        derived.Attributes.Add(new TemplateAttribute("SetPoint")
+        {
+            DataType = DataType.Double,
+            Value = "STALE",
+            IsInherited = true
+        });
+
+        var instance = CreateInstance();
+        var result = _sut.Flatten(
+            instance,
+            [derived, baseTemplate],
+            new Dictionary<int, IReadOnlyList<TemplateComposition>>(),
+            new Dictionary<int, IReadOnlyList<Template>>(),
+            new Dictionary<int, DataConnection>());
+
+        Assert.True(result.IsSuccess);
+        var setPoint = result.Value.Attributes.First(a => a.CanonicalName == "SetPoint");
+        Assert.Equal("100.0", setPoint.Value);
+    }
+
+    [Fact]
+    public void Flatten_OverriddenAttributeOnDerived_DerivedValueWins()
+    {
+        var baseTemplate = CreateTemplate(2, "Sensor");
+        baseTemplate.Attributes.Add(new TemplateAttribute("SetPoint") { DataType = DataType.Double, Value = "100.0" });
+
+        var derived = CreateTemplate(1, "Pump.TempSensor", parentId: 2);
+        derived.Attributes.Add(new TemplateAttribute("SetPoint")
+        {
+            DataType = DataType.Double,
+            Value = "150.0",
+            IsInherited = false
+        });
+
+        var instance = CreateInstance();
+        var result = _sut.Flatten(
+            instance,
+            [derived, baseTemplate],
+            new Dictionary<int, IReadOnlyList<TemplateComposition>>(),
+            new Dictionary<int, IReadOnlyList<Template>>(),
+            new Dictionary<int, DataConnection>());
+
+        Assert.True(result.IsSuccess);
+        var setPoint = result.Value.Attributes.First(a => a.CanonicalName == "SetPoint");
+        Assert.Equal("150.0", setPoint.Value);
+    }
+
+    [Fact]
+    public void Flatten_LockedInDerivedOverride_Fails()
+    {
+        var baseTemplate = CreateTemplate(2, "Sensor");
+        baseTemplate.Attributes.Add(new TemplateAttribute("SetPoint")
+        {
+            DataType = DataType.Double,
+            Value = "100.0",
+            LockedInDerived = true
+        });
+
+        var derived = CreateTemplate(1, "Pump.TempSensor", parentId: 2);
+        derived.Attributes.Add(new TemplateAttribute("SetPoint")
+        {
+            DataType = DataType.Double,
+            Value = "150.0",
+            IsInherited = false
+        });
+
+        var instance = CreateInstance();
+        var result = _sut.Flatten(
+            instance,
+            [derived, baseTemplate],
+            new Dictionary<int, IReadOnlyList<TemplateComposition>>(),
+            new Dictionary<int, IReadOnlyList<Template>>(),
+            new Dictionary<int, DataConnection>());
+
+        Assert.True(result.IsFailure);
+        Assert.Contains("LockedInDerived", result.Error);
+        Assert.Contains("SetPoint", result.Error);
+    }
+
+    [Fact]
+    public void Flatten_InheritedScriptOnDerived_BaseCodeWins()
+    {
+        var baseTemplate = CreateTemplate(2, "Sensor");
+        baseTemplate.Scripts.Add(new TemplateScript("Sample", "return base;"));
+
+        var derived = CreateTemplate(1, "Pump.TempSensor", parentId: 2);
+        derived.Scripts.Add(new TemplateScript("Sample", "stale code") { IsInherited = true });
+
+        var instance = CreateInstance();
+        var result = _sut.Flatten(
+            instance,
+            [derived, baseTemplate],
+            new Dictionary<int, IReadOnlyList<TemplateComposition>>(),
+            new Dictionary<int, IReadOnlyList<Template>>(),
+            new Dictionary<int, DataConnection>());
+
+        Assert.True(result.IsSuccess);
+        var script = result.Value.Scripts.First(s => s.CanonicalName == "Sample");
+        Assert.Equal("return base;", script.Code);
+    }
 }
diff --git a/tests/ScadaLink.TemplateEngine.Tests/TemplateServiceTests.cs b/tests/ScadaLink.TemplateEngine.Tests/TemplateServiceTests.cs
index 6804df1..6cf9a1a 100644
--- a/tests/ScadaLink.TemplateEngine.Tests/TemplateServiceTests.cs
+++ b/tests/ScadaLink.TemplateEngine.Tests/TemplateServiceTests.cs
@@ -398,6 +398,70 @@ public class TemplateServiceTests
         Assert.Contains("derived template", result.Error);
     }
 
+    [Fact]
+    public async Task UpdateAttribute_LockedInDerivedBase_RejectsOnDerived()
+    {
+        var existing = new TemplateAttribute("SetPoint") { Id = 100, TemplateId = 77, DataType = DataType.Float, IsInherited = true };
+        var baseTemplate = new Template("Sensor") { Id = 2 };
+        baseTemplate.Attributes.Add(new TemplateAttribute("SetPoint") { Id = 10, TemplateId = 2, LockedInDerived = true });
+        var derived = new Template("Parent.slot") { Id = 77, ParentTemplateId = 2, IsDerived = true };
+
+        _repoMock.Setup(r => r.GetTemplateAttributeByIdAsync(100, It.IsAny<CancellationToken>())).ReturnsAsync(existing);
+        _repoMock.Setup(r => r.GetTemplateByIdAsync(77, It.IsAny<CancellationToken>())).ReturnsAsync(derived);
+        _repoMock.Setup(r => r.GetTemplateByIdAsync(2, It.IsAny<CancellationToken>())).ReturnsAsync(baseTemplate);
+        _repoMock.Setup(r => r.GetAllTemplatesAsync(It.IsAny<CancellationToken>()))
+            .ReturnsAsync(new List<Template> { baseTemplate, derived });
+
+        var proposed = new TemplateAttribute("SetPoint") { Value = "99", DataType = DataType.Float, IsInherited = false };
+        var result = await _service.UpdateAttributeAsync(100, proposed, "admin");
+
+        Assert.True(result.IsFailure);
+        Assert.Contains("locked by base template 'Sensor'", result.Error);
+    }
+
+    [Fact]
+    public async Task UpdateScript_LockedInDerivedBase_RejectsOnDerived()
+    {
+        var existing = new TemplateScript("Sample", "stale") { Id = 200, TemplateId = 77, IsInherited = true };
+        var baseTemplate = new Template("Sensor") { Id = 2 };
+        baseTemplate.Scripts.Add(new TemplateScript("Sample", "return 1;") { Id = 20, TemplateId = 2, LockedInDerived = true });
+        var derived = new Template("Parent.slot") { Id = 77, ParentTemplateId = 2, IsDerived = true };
+
+        _repoMock.Setup(r => r.GetTemplateScriptByIdAsync(200, It.IsAny<CancellationToken>())).ReturnsAsync(existing);
+        _repoMock.Setup(r => r.GetTemplateByIdAsync(77, It.IsAny<CancellationToken>())).ReturnsAsync(derived);
+        _repoMock.Setup(r => r.GetTemplateByIdAsync(2, It.IsAny<CancellationToken>())).ReturnsAsync(baseTemplate);
+        _repoMock.Setup(r => r.GetAllTemplatesAsync(It.IsAny<CancellationToken>()))
+            .ReturnsAsync(new List<Template> { baseTemplate, derived });
+
+        var proposed = new TemplateScript("Sample", "return 2;") { IsInherited = false };
+        var result = await _service.UpdateScriptAsync(200, proposed, "admin");
+
+        Assert.True(result.IsFailure);
+        Assert.Contains("locked by base template 'Sensor'", result.Error);
+    }
+
+    [Fact]
+    public async Task UpdateAttribute_DerivedOverride_PersistsIsInheritedFalse()
+    {
+        var existing = new TemplateAttribute("SetPoint") { Id = 100, TemplateId = 77, DataType = DataType.Float, IsInherited = true };
+        var baseTemplate = new Template("Sensor") { Id = 2 };
+        baseTemplate.Attributes.Add(new TemplateAttribute("SetPoint") { Id = 10, TemplateId = 2 });
+        var derived = new Template("Parent.slot") { Id = 77, ParentTemplateId = 2, IsDerived = true };
+
+        _repoMock.Setup(r => r.GetTemplateAttributeByIdAsync(100, It.IsAny<CancellationToken>())).ReturnsAsync(existing);
+        _repoMock.Setup(r => r.GetTemplateByIdAsync(77, It.IsAny<CancellationToken>())).ReturnsAsync(derived);
+        _repoMock.Setup(r => r.GetTemplateByIdAsync(2, It.IsAny<CancellationToken>())).ReturnsAsync(baseTemplate);
+        _repoMock.Setup(r => r.GetAllTemplatesAsync(It.IsAny<CancellationToken>()))
+            .ReturnsAsync(new List<Template> { baseTemplate, derived });
+
+        var proposed = new TemplateAttribute("SetPoint") { Value = "99", DataType = DataType.Float, IsInherited = false };
+        var result = await _service.UpdateAttributeAsync(100, proposed, "admin");
+
+        Assert.True(result.IsSuccess);
+        Assert.False(result.Value.IsInherited);
+        Assert.Equal("99", result.Value.Value);
+    }
+
     [Fact]
     public async Task DeleteTemplate_BaseWithDerivatives_BlockedWithSlotNames()
     {