Intellectual property theft today is more prevalent and sophisticated than ever. During COVID-19 alone, software piracy spiked by 20-30% around the world.
IP theft has become especially common within our global digital landscape. Sharing information and building products is happening virtually across borders. In turn, this enables bad actors to find back doors to access and copy confidential data.
That’s why you should know to protect software intellectual property when outsourcing. Safeguard your winning software IP in the long term with our expert-backed insights.
Intellectual property (IP) covers any asset based on “original human thought.” These creations are considered innovative and non-tangible. After meeting the criteria, the owner maintains exclusive rights to its use.
When it comes to IT intellectual property, these assets are typically protected by IP:
Most often, software IP is safeguarded through a copyright and/or patent. Having one means that you can stop others from stealing or copying your innovations. As a result, this gives your company a competitive edge in the market.
Of course, obtaining IP protections can be a tricky process. You must prove that your asset is truly original and non-obvious to experts in the field. This process can take years and thousands of dollars to get right.
To reap the full benefits of your products, IP is crucial. Having exclusive ownership of your innovative software will enable you to:
Specifically, IP protections are business-critical due to the high investment in making products. The last thing you want is to sink money into a new innovation that other companies then rip off and sell on their own.
Safeguarding your IP involves securing it at every critical juncture during development. As you prepare to outsource, learn how to protect software intellectual property. Cover all your bases with our expert tips below.
First of all, protect your original products through officially filing the relevant paperwork. Doing so will give you a stronger legal basis to defend and enforce your IP rights. The two most common filings for software assets are copyrights and patents.
Copyright protects the specific expression of an idea. In the case of innovative software, you can copyright your source code. Other assets may qualify as well, such as product names, artwork, content, etc.
Keep in mind, however, that copyright doesn’t protect your software’s function. So, another business could write their own original code to fulfill the same function. That said, the biggest benefit of copyright is that somebody can’t copy/plagiarize your code.
Patents are an important way to safeguard your software IP. Holding a patent gives you exclusive rights to manufacture and license it.
Unlike copyright, a patent protects your software’s function. (For example, Amazon has a patent for its famous “1-Click” order button.) In this case, another business can’t create original code to fulfill the same function.
To qualify, your software must have a unique, valuable feature or design in the market. Ultimately, patentability criteria are quite rigorous. You must show that the asset is non-obvious to experts in the field.
Other types of IP protections are available, though less common for software products. Even so, you should be aware of these potential outlets in case they apply to your business scenario:
Outsourcing is an excellent option for building your software product. Yet, you should do your due diligence by finding an IT partner in an IP-protected country.
IP varies according to the location where you build and sell your product. Every country’s protections are unique (see top rankings here). You’ll need to research what sort of protections your partner’s location offers.
In case you’re based in the European Union, it’s often best to choose an IT partner also located there. After all, IP protections are powerful and consistent within EU countries.
Not sure which are the best countries to outsource software development? Get a full overview in our expert guide.
Knowing how to protect software intellectual property involves having best-in-class protocols. Ask your IT partner about key areas, such as:
In addition, be sure they’re using anti-reverse engineering techniques for your code. This will prevent bad actors from recreating and copying your code to their liking.
Once you’ve chosen your partner, stop any leaks from staff, partners and contractors.
The best way to do so is to have all relevant staff and partners sign confidentiality agreements. The most common type is a Non-Disclosure Agreement (NDA). You may also have them sign a Proprietary Information Agreement (PIA).
For independent contractors, you should also require an IP Assignment Agreement. This specifies that all work completed for the project is the exclusive right of the company. With it, developers won't be able to copy your code and share or repurpose it for a competitor.
Having all this paperwork in place is essential to double-verify your IP’s security.
Licensing management is another key element of locking down your software IP. In essence, source code licenses protect your IP from unauthorized tampering or sharing.
Source code licenses grant users the free reign to utilize it under specific terms. You can prevent leaks by having airtight user agreements and source code escrow. After all, you don’t want users to be able to reverse-engineer or plagiarize your code.
As you master how to protect software intellectual property, don’t skimp on contracts. Protecting your IP involves a lot of contracts, licenses and agreements. Hire a professional to help you draft these agreements.
Often businesses will shortcut this process by downloading templates or repurposing old contracts. Usually it’s best to work with a legal professional to create specific, thorough language. It should also be customized for each type of document.
For more info, check out our guide to software contract best practices here!
Surprisingly enough, 88% of data breaches are due to human error. Reduce the risk of mistakes by your staff and partners by taking the time to educate them on cyber safety.
Host regular IP awareness training to encourage them to secure company assets. To establish airtight processes, you’ll want to cover:
Reinforce these protocols often so that your staff are well-versed on how to protect IP in the long run.
Software patents can give your business a market advantage. However, the patent process isn’t necessarily easy to navigate. Some of the challenges of obtaining a software patent include:
Even so, the patent process can be well worth it, as it protects your exclusive right to the IP for up to 20 years. Protected, innovative products are often the driving factor for business success.
Shielding your software IP from bad actors and leaks is vital to your business. With our expert tips, you now know how to protect software intellectual property. Just be sure to cover all aspects of IP so that you can easily enforce your rights, if needed.
For high-level IP protections, team up with the right IT outsourcing partner. At Netcorp, we utilize strong IP protocols to guarantee security and confidentiality. In addition, our developers meet top standards for ethical, transparent collaboration. Contact us to learn how we build high-caliber products and protect your IP.
Paavo Pauklin is a renowned consultant and thought leader in software development outsourcing with a decade of experience. Authoring dozens of insightful blog posts and the guidebook "How to Succeed with Software Development Outsourcing," he is a frequent speaker at industry conferences. Paavo hosts two influential video podcasts: “Everybody needs developers” and “Tech explained to managers in 3 minutes.” Through his extensive training sessions with organizations such as the Finnish Association of Software Companies and Estonian IT Companies Association, he's helped numerous businesses strategize, train internal teams, and find dependable outsourcing partners. His expertise offers a reliable compass for anyone navigating the world of software outsourcing.
Download the free copy of our "Software Development Outsourcing" e-book now to learn the best strategies for succeeding in outsourcing!
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