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Nature and critical importance of intellectual property vary across industries and types of business. Software development outsourcing requires high level of knowledge sharing between customer organization and vendor. Consequently, IP rights of stakeholders are involved in one form or another.
Thus intellectual property management and data protection issues have become increasingly important for businesses utilizing offshore/nearshore outsourcing.
Intellectual property that can be transferred to the vendor may include software, data, business and technology processes, trade secrets, inventions, know-how as well as other confidential information and works of authorship. Furthermore some of it may belong to third parties and require licensing.
Both customer and vendor must properly administer their IP and stick to overall business objectives in order to effectively manage information sharing. Benefits of sharing IP assets must outweight risks associated with outsourcing.
The World Intellectual Property Organization (WIPO) emphasizes two critical IP-related concerns in offshore outsourcing: ownership of IP and “inadvertent, accidental or willful disclosure of confidential information and trade secrets” (loss of business knowledge). But in most cases these concerns can be overcome by properly conducting IP due diligence, thoroughly evaluating the vendor and taking appropriate IP-protection measures.
IP Due Diligence
Prior to concluding any outsourcing initiative customer organization should conduct IP due diligence and risk assessment. As a result the company will be able to safeguard its intellectual property and clearly define which functions should be kept in-house and which can be outsourced.
IP due diligence may include the following indicative steps:
Having conducted IP due diligence, the organization can proceed to evaluation of potential outsourcing partner. Results can be used during negotiation of outsourcing agreements to provide for IP-related issues that may arise.
Practical business negotiations should be initiated only after being satisfied with vendor’s reputation, resources and compatibility of business culture. They should focus on the steps needed to be taken by both parties in order to safeguard and ensure proper use, sharing, licensing, development and improvement of the IP during and after the relationship. It should also include any relevant IP assets of third parties.
Selection of the outsourcing vendor in the context of IP-related issues
When outsourcing, customer organization should scrutinize potential partner’s ability to safeguard confidential information of commercial value against misappropriation, misuse, sabotage, loss or theft.
Practical measures for protection of intellectual property
Intellectual property is one of the company’s most valuable assets. This is especially true for SMEs and startups where it can be the only tangible assets. Risks of not protecting IP are further escalated when outsourcing comes into play. That’s why customer organizations must effectively deal with related issues and use all types of IP protection: physical, electronic and legal.
Physical and electronic protection of intellectual property:
Legal protection of intellectual property:
IP protection and data security: Intellias practices
Intellias is very security-conscious and devoted to protecting intellectual property and business knowledge of its clients. We recognize importance of protecting customers’ information and express strong commitment to safeguarding their privacy. Hence, respective ethical rules and privacy policies have been adopted at Intellias.
Modern encryption and access sharing technologies are commonly utilized at Intellias. This results in essentially secure infrastructure which provides reliable protection of information from unauthorized access by third parties. Furthermore, we maintain high level of employee credibility through Non-Disclosure Agreements that comply with international standards and are designed for thorough protection of project information. All sensitive information that is passed on to Intellias during the project life cycle is stored in a secure environment.
Explicit authorship waiver agreements guarantee that the customer becomes the only owner of the code. Representative office in Switzerland enables Intellias to effectively deal with contractual and legal requirements as well as ensure compliance with European and international law.