Protecting Your Intellectual Property Assets and Know-How

February 14, 2016

By Steve Mezak

protection.pngDo you know how secure your intellectual property (IP) assets are? Protecting your IP and other confidential information owned by your company or client is not only challenging, but in today’s constantly changing technology driven business world, it's increasingly crucial.

Protecting your IP asset can be a major concern when considering outsourcing. Especially when outsourcing your software development to international waters, as it may be very difficult to establish ownership. So how do you guarantee the safety of your IP?



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We’ve put together a few of the most crucial steps you can take to diminish the threat of your IP being exposed when outsourcing domestically and internationally.  

Set Goals and Create a Team

Start by assessing how risk averse your company might be. You can always outsource your least important IP first and save your more important IP for once you have established a confident relationship with your outsourcing partner.

Andrew Berger from ipinbrief.com advises companies to have an IT manager as well as an in-house project manager to keep an eye on transactions. You may also want someone to help you review the financials of the contract and guarantee there are no matters of security being broken.  

Inventory Your IP

Do you know where all of your IP is? IP can come in various forms and it can be set in things like software code or stored into databases. It’s necessary to make note of the IP you wish to outsource. Notice what your IP is made up of and where it can be found. You should know who is in control of it, who is protecting it, how it is being protected and how susceptible it is. Be sure to consider this when preparing to best protect your most vital information.

Identify Your Outsourcing Vendor

Once you have your inventory, your chosen IP and designated the suitable personnel for the transaction, it is time to choose the appropriate vendor, which can be tricky. Not only should you choose your vendor based on skills and cost, but you should also consider investigating their track record and assess their IP protection plans. Check into their insurance coverage plan in order to be positive that it's adequate enough to protect you from any possible damages.  

In addition, have an exit strategy in place in the event that the partnership doesn’t work out and you decide you want out of the contract. Will you be able to transition efficiently to another vendor?

Core Considerations

You should also take into account some extra provisions once you have found the vendor who is right for your needs and you are all set to put together your contract. One clause you might want to include is if the arrangement gives you the rights to the ownership over all of the IP that your outsourcing partner created for you throughout your partnership. In case you terminate the relationship with this vendor, you will want to have the ownership of that IP and take it with you to your next outsourcing partner. Your arrangement must state that if your partnership is terminated your company immediately receives the sole access to the IP. The contract should also state in what ways the vendor plans to protect your assets.  Don’t skimp on the details.  

Another thing to make note of is that your arrangement can differ contingent on which country your IP will be outsourced to. Berger says that when outsourcing internationally to places like India or China, be sure that your software development vendor registers for copyrights and trademarks. They can do this at the corresponding government office in their place of business. It would be a good idea to also provide a US forum and a US choice of law clause in case of any misuse of the contract. All of the contacts both you and your outsourcing partner have should be included in the contract.   

And Remember…

IP is very fragile—once it’s out, well, it’s out. However, these procedures will help you lessen that risk. Fortunately, Accelerance can do a lot of this for you. We can assist you in picking the right vendor as we have already screened vendors from all over the globe with the best reputations and technical resources and find the one that will best match your company culture. Not to mention determine their ability to protect your most intangible assets.  

When outsourcing your software development internationally, it's crucial to confirm the security of your company’s IP. Your IP matters, but trust matters more—Accelerance knows this. We understand the various IP legal actions, but always encourage our clients to take the appropriate steps to establish, protect and enforce their intellectual property right in the US and overseas.

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