How to Make Sure Your Intellectual Property Is Protected When You Outsource?

When you have a great and innovative idea you may protect it as your intellectual property (IP) before anyone else does! This idea is valuable if only you can legally claim it as your own.

At the same time, if you outsource the design of your website to a subcontractor, you want the design to be yours.

In general, when you outsource, one of the biggest concern is protecting your IP.

If you are looking to outsource a task, but you want to be sure your IP is protected, here are some guidelines that might interest you.

Top considerations you should have before subcontracting

The human resources needed

The first question may be: do I know what is IP and how to protect it?

If you are not a pro in IP you might consider have an expert by your side. For example, to understand and manage the projects you are engaging in and the related IP, an IT manager, and an in-house project manager are the best.

You might also need an accountant for the financial clauses of the IP agreement.

The reputation of the subcontractor

You want to take a close look at the reputation, financial, and technical resources of the subcontractor who you are outsourcing to.

You can talk to its references and assess its security and IP protection program for example.

A small definition of IP

There are many IP laws, in different European countries laws. Needless to say, some are well-known by pretty much everyone, such as patents, copyright, and trademarks. Others are less well-known, such as moral rights and rights in design. Or completely out of the radars outside specialist circles, such as rights in typographical plans and plant variety rights for example.

What is there to protect? Patents, trademarks, etc

Before calling upon a subcontractor to create a website for you, or design, or anything that requires IP considerations, there is one thing you should do.

It is making an inventory of the IP involved in the outsourcing process.

It can be a design, but it can also be a scientific protocol, or else. Remember what we just said, IP can take many forms (copyrights, trademarks, etc.). For example, if a subcontractor creates a website for your company, using your logo, in the end, you are still the owner of the logo.

Let’s define some of the most well-known IP forms :

• Patents, which allow you to stop third parties from making, using or selling your invention. It is only worth for a certain time depending on the type of invention.
• Trademarks, which protect the name of your product. It forbids other business from selling a product under the same name.
• Copyright, which informs others that you control the production, distribution, display or performance of your work.

Yes, IP is everywhere! Into databases, in software code, and even written on the blackboards of your conference room.

So, let’s recap it. The inventory process relies on simple tasks :

• Identify what your IP consists of.
• Where it is located.
• Who controls it.
• Who adds or enhances it.
• Who protects it.
• How it is protected and how vulnerable it is to attack.

Then, after listing the IP involved in your outsourcing process, you should discuss and clarify the IP agreements you will make with the subcontractor.

How to protect your IP with a contract

Many IP rights cannot be properly assigned without a written document.

IP agreement documents

There are two main kinds of IP document agreement: assignments and licenses. The assignment carries out the transfer of the ownership of IP from one person to another. The license specifies that a person is able to do certain things without breaching the owner’s IP rights. An example would be to outsource analysis of genomic data and use the results in a publication. You only have the right to do so if it is written down.

Common issues when drafting an IP agreement

This document commonly includes:

• The definition of the licensed or assigned IP.
• Warranties and indemnities are given by the licensor or assignor in relation to the IP.
• The circumstances in which a license should be canceled or the rights assigned reverted. And the treatment of related moral rights.

The key clauses of your IP contract to look at

There may be tens of pages in the agreement. IP in brief a great list of clauses that ought to be in the agreement:

• Make sure that you will own the rights to any IP that is created during the contract. Let’s take an example: the subcontractor’s tasks is to create a DNA extraction protocol for your model organism. Then, you are the owner of the protocol at the end.
• The agreement should specify how your IP will be protected by the subcontractor, who will access it and under what circumstances. Let’s say the subcontractor manages a database, it should be specified that he will write over data and not simply erase any data no longer needed.
• Make sure the subcontractor registers your copyrights and/or trademarks at the right government agencies if you outsource abroad (India or China for example).

Of course, the agreement will change depending on the nature of the IP and the country to which it will be outsourced.

What are your IP rights in Europe exactly?

We just talk about copyrights and trademarks abroad, so let’s take a look at how it is done in the Europe Union.

Since 2011 and its communication on IP, the European Commission wanted to create an innovation-friendly environment. That’s why the EU adopted an “all-inclusive” IPR strategy.

It aims to create a balance between promoting creation and innovation, by ensuring reward and investment for creators and promoting wide access to goods and services protected by IPR.

IPRs are mostly protected at a national level rather than an EU level. It can be complicated and costly to defend them in each individual country. You should then save time and money by protecting your intellectual property at the EU level.

A European Union trademark and a registered Community design equal protection in the 28 member states in one single registration. The online application costs €850 to register a trademark and €350 for a Community design.

Or else, you can also apply for a European patent through the European Patent Office ( EPO).

Still, you should know that this kind of patent needs to be validated by the national patent office in each country where you want your product to be protected.

Reading this article you probably understood that IP is one of the company’s most valuable assets, especially for SMEs and startups. Risks of not protecting IP are escalated when outsourcing comes into play. That’s why it is important to consider IP protection carefully and to choose your partners wisely.