How to Protect Intellectual Property

When an outsourcing vendor’s ability to safeguard trade secrets is in question, the potential downsides of outsourcing custom software development may surpass its advantages. Therefore, it is of utmost importance to thoroughly examine the intellectual property policy of any prospective supplier.

The optimal economic realization of a software development asset hinges significantly on the adept utilization of legal regulations to safeguard intellectual property rights. In cases where a vendor’s reliability in preserving trade secrets is in doubt, the potential drawbacks of outsourcing software development could surpass its anticipated advantages. Therefore, a comprehensive evaluation of the intellectual property policy of the potential outsourcing supplier is imperative.

As per the World Intellectual Property Organization (WIPO), offshoring software development entails the transfer, either in entirety or partially, of an in-house software development responsibility from company A to company B, whose operations are situated outside of the national jurisdiction of company A.

Various categories of intellectual property assets may come into play within such associations, encompassing patents for concepts, systems, techniques, and functions encapsulated within a software product; safeguarding trade secrets (comprising code with integrated concepts and notions); and asserting copyright and associated rights to shield the source code as well as distinct components of the user interface.

The intellectual property safeguarding strategy of an outsourcing software development enterprise should be manifested in these vital records: a comprehensive General Agreement, a Non-Disclosure Agreement (NDA), and an Employee Confidentiality Contract.

General Agreement: Guidelines for Safeguarding Clients’ Intellectual Property Rights in Work-for-Hire Agreements with an Exemplary Outsourcing Company

We recognize the significance of intellectual property to our clients’ business advancement. In our commitment to safeguarding our client’s interests, ownership of intellectual property assets generated by our software developers as part of the work performed under contract, including patents, copyrights, and all data pertaining to our clients and their projects, is vested in our clients. This principle is duly articulated in our software development agreement as follows: The SERVICE PROVIDER conveys property rights to the CUSTOMER via an exclusive license. The exclusive right encompasses the authority to utilize the software at their sole discretion in any form and manner. These exclusive rights are ceded for the entire duration of the relevant copyrights and hold validity worldwide. The transfer of these exclusive rights is granted on a conditional basis. The documentation of this transfer, from the SERVICE PROVIDER to the CUSTOMER, is recorded in the Confirmation of Services Rendered. The date of exclusive rights transfer corresponds to the date of signing the Confirmation of Services Rendered by both parties. Additionally, the software’s source code is furnished to the CUSTOMER in electronic format, either to the email address stipulated in this agreement or to the CUSTOMER’s server.

Non-Disclosure Agreement: Handling of Confidential Information Throughout and Post-Project by an Exemplary Outsourcing Software Development Enterprise

The specific contents may vary but typically include the following provisions: “Confidential Information” encompasses all data, technical knowledge, or expertise, including, but not limited to, information pertaining to the disclosing party’s research, products, hardware, software, designs, innovations, concepts, processes, illustrations, business strategies, product executions, financial data, marketing methods, business operations, and systems, pricing strategies, information about existing and potential new employees, clients, and/or suppliers, whether disclosed in writing, verbally, through examination, or by any other means. The recipient party and its representatives are prohibited from disclosing any Confidential Information to third parties, in any form, and are required to safeguard such Confidential Information for a period of five (5) years from the date of its disclosure. This Agreement does not intend to confer or imply any rights, whether by license or otherwise, to either party under any patent, copyright, trade secret, or other intellectual property rights nor does it grant or imply any rights in or to the Confidential Information of the other party. The recipient party must take all reasonably necessary precautions to protect the Confidential Information received from the disclosing party, at a level at least as stringent as the measures taken to safeguard its own confidential information. These Terms and Conditions will be governed by and interpreted in accordance with the laws of India. Disputes arising in connection with these Terms and Conditions will be subject to the exclusive jurisdiction of the Indian courts.

Employee Confidentiality Contract: Responsibility Extends to Every Member of the Software Development Company’s Team, Not Just the Contracting Parties

In order to ensure that all developers at CloudTimon have a complete understanding of the paramount significance of safeguarding Clients’ rights, each developer, upon joining the company, is required to sign both an Employee Confidentiality Contract and their Employee Contract. These contracts generally stipulate that developers must adhere to CloudTimon’s intellectual property protection policy. Furthermore, if needed, each developer has the option to directly sign a personal Non-Disclosure Agreement (NDA) with the Client.

CONCLUSION: CloudTimon is a company with 14+ years of track record in the international marketplace. Each month, we welcome numerous startups and enterprises who bring forward pioneering concepts. Our reputation is of utmost importance to us, and we are committed to preserving it, never jeopardizing it for immediate gains.