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Natalya Brinza Project Manager
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How to Protect Your Idea and End Product While Outsourcing Software Development

We have already told you a few times about the fact that contract is your lifesaver when the deal goes to outsourcing. It has all the needed information about the time, price, and, most importantly, who owns the rules for code and Intellectual Property rights in it. In this article, I’m going to tell you how to protect your idea, money and future business with software development contract.

Main terms:

Intellectual property - is the product of creative activity in the industrial, scientific, literary, or artistic fields, bearing the intangible nature. However, intellectual property that is embodied in certain material objects or accompanies them presents as a component of the quality the price of goods. From this perspective, it becomes itself a kind of goods. In software development sphere, IP means that anyone who developed something during the workflow owns the rights to it.

You, as a client, need to ensure that all objects of Intellectual Property rights that belong to your project will remain under only your ownership.

Confidential information - is all material/non-public/business-related information, oral or written, that the Customer reveals to the Developer through any means of communication.

SD contract - is a software development contract made between 2 parties - the Client and the Developer - and includes service delivery and acceptance terms, confidential information, warranties etc.

Why do I need to protect my IP rights?

Firstly, because everyone who involved in your business can encroach on your IP. It can be an outsourcing company, developers or individual employees (like accountants). The one thing that can reduce or even take away their rights in this situation is the contract.

need to protect my IP rights

Secondly, the consequences of neglecting the ownership issue can be really serious. It involves the risk of losing money when you delay solving problems related to IP and changing of the owner. Also, there is the situation with investors that demands you have all of the rights. And there are customers you cannot guarantee the quality of the product, which is technically not yours.

What are the ways to protect my IP rights?

There are lots of ways to do this, but here I gathered the most reliable ones.

1 Signing an NDA contract

NDA is a non-disclosure agreement. NDA means that both signed parties of the contract are not allowed to share the project or discuss it with anyone without permission. This is one of the most popular method of protecting your idea from an outsourcing company. The reliable companies, Artjoker included, usually propose this method of legal relationship between the Client and the Developer.

2 Signing SD contract

There are a lot of Software Development contract samples on the Internet. Artjoker company has its version as well. This contract usually consists of work and payment deadlines, ownership (this is really important to you), warranties, product disclosure and confidential information. You should state that you will own all the rights on the IP produced as a result of the programmers’ work and they won’t be able to use it in the future.

3 NCC, patent or copyright

You can either choose the NCC - non-compete clause so that the developers will not be able to participate in any business that is related to yours for some period of time. Or you can choose patent/copyright for government protection of your business. They don’t have 100% warranty that your idea won’t be stolen, but if this happens you would have a great protection behind your back.

I want to also add one important top tip advice: get a lawyer. He can save your money, protect your idea from being stolen and help you understand Ukrainian IP Legislation, which can be confusing to foreigners at first.

Good luck! And remember that Artjoker will happily turn your ideas into great results.  

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author Liza Kerimova Liza Kerimova
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