Software Development Outsourcing to Ukraine: How to Protect Your Intellectual Property

Sep 19, 2014

Outsourcing software development to Ukraine has let many companies do business more effectively. But beneficial as outsourcing is, it is always associated with certain risks. When you hire offshore developers to create a product for you, one of the main concerns will be protecting your intellectual property. The risk of your IP being compromised cannot be eliminated completely, but there surely are some measures that will guard your intellectual property and ensure you own every bit of the software you are paying for.

Inventory Your Existing IP

In the course of the project, not only will the developers create new intellectual property for you, but you will also have to share the data you already have with them. This may mean copyrights, trademarks, patents, or trade secrets, and come in any form from parts of code to interfaces to server data. Make sure you enlist all this IP and identify which of it will be involved in your work with the dedicated developers in Ukraine. You should also check your contracts with third parties and make sure you are not bound by any agreements with them, which prohibit your sharing the IP with anyone else.

Retain In-House Control

The development work might successfully be done offshore, but you want to keep control over the process - especially over those parts of it where your IP is involved - in-house. Consider doing the  project management in-house, as well as hiring an IT security manager who will make sure there are no security breaches.

Consider Dedicated Developers in Ukraine, not Agency Contractors

Outsourcing can be done in different ways, and it is much easier to protect your IP when you hire software programmer as an employee rather than sign a contract with an IT company. You can set up a team of dedicated developers in Ukraine, and each of them will be bound by the terms of their employment contract with you, just like every one of your in-house employees is. This way, you get all the benefits of outsourcing, while keeping the data and expertise within your company.

Make Sure the Contract Protects Your IP

Your contract with the developer should contain clauses that discuss the intellectual property and how it is protected. Make sure to state that you will own all the rights on the IP produced as the result of the programmers’ work and they will not be able to use it in the future. Besides, your developer should sign an NDA agreement so that you are sure none of the IP shared with them will be disclosed to any third party. Finally, make sure the contract is drafted in accordance with the laws of your country, and your country is where any possible conflict should be resolved. That will ensure your confidence in the outcome of any potential conflict regarding your IP.

Make Sure You Know Ukrainian IP Legislation

Even though your cooperation with the offshore developers will be ruled by the laws of your country, you should be confident there are no Ukrainian laws that might contradict your agreement and cause you unpleasant surprises. A good idea is to have a local consulting company that will have profound knowledge of Ukrainian IP and labor legislation and warn you against possible issues.

In the IT industry, intellectual property is the most important asset you have, so it makes sense to take every measure to protect it. Outsourcing software development presents certain risks in that regard, but if you work with dedicated developers in Ukraine and take all the precautions, you can feel protected.

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