Outsourcing: 5 Tips for Protecting Your IP

By Pedro Hernandez | Posted September 26, 2012

It's a common stumbling block for small businesses. Somewhere along the line, a project progresses to a point where you don't have the IT development resources in-house and more hiring isn't an option.

That's when outsourcing comes in.

You don't have to be a big business to benefit from the expertise of skilled experts. Today, entrepreneurs have the benefit of a variety of services and freelancer communities that can help their startups get ahead at attractive rates. Whether it's software coding, design work or even copyediting, there's a virtual army qualified workers standing by.

Need some help getting started? Read the Small Business Computing guide, 5 Tips for Outsourcing Work Online, by Maryalene LaPonsie for some helpful pointers and links to outsourcing services.


As LaPonsie's article shows, with a little research, diligence and foresight, outsourcing can be an easy, cost effective and productive way to give a growing business a much-needed boost. But with this ease comes risks.

Protect Your IP

Even huge corporations like Apple and Cisco, both with massive legal resources at their disposal, have struggled with imposters that play it fast and loose with their intellectual property (IP). Fortunately for them, they have big war chests to weather a flood of counterfeit goods.

Small businesses are rarely that lucky, particularly if just one idea, or a small handful, forms the foundation of the entire business.

IP theft is a danger every time you hand-off your idea or innovation to someone else to work on. Here are some tips to help protect your ideas and your company.

Claim What's Yours

The first step in protecting your IP is to claim it. Register for patents, trademarks and copyrights as soon as possible. After all, you can't take legal action against parties that infringe on what in the eyes of the law isn't even yours.

Need help getting started? Point your browser to Google's Patent Search and get the lay of the land. At some point, you'll need legal advice, however. Don't worry, we've got you covered in the low-cost (and free) legal services department, too.

Weigh Your Options

Cost isn't everything. Finding a suitable outsourcing services provider takes a fair bit of research, but it's worth doing. Does the outsourcing company you're considering have a good reputation? What's its track record? What protections does it offer your IP?

Getting answers to these questions will help you avoid fly-by-night outfits. More importantly, it will give you some peace of mind.

Your Friend, the NDA

Those three little letters stand for "non-disclosure agreement," and they are a powerful legal tool.

It's unfortunate, but when you dig deep into the user agreements or contracts of most services -- outsourcing and otherwise -- you'll find that there's precious little that they're on the hook for should your product show up on the shelves sporting someone else's logo.

An NDA will impose a legal force field, of sorts, around your IP (and activities surrounding it). It's not impenetrable -- loose lips, etc. -- but the threat of legal action in case of a breach is a powerful deterrent. Get your lawyer to draw one up and if the company or team you're considering to contract won't sign it, look elsewhere.

Document Everything

Nobody likes paperwork, but it can save your bacon if IP squabbles arise.

Organize and file away every contract and agreement related to IP. It's a bit of insurance against stakeholders that may want to make onerous changes to the terms of ownership or licensing down the road. However, it can also provide a good timeline for your IP, one that establishes you or your startup as the true innovator of a contested innovation.

If All Else Fails, Sic 'Em

Something else that people don't like: confrontation.

Sadly, to protect your IP, sometimes you have to go to court or you risk forfeiting the rights to your hard work. Sometimes a simple cease-and-desist order will do, but be prepared for the possibility of a lawsuit. Hopefully, by the time this becomes a concern, you can afford to have a crack legal team on retainer.

Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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