Excerpt from Chapter 8: Protecting Your Intellectual Property
Chico: Hey wait, wait! What does this say here? This thing here?
Groucho: Oh that. Oh that’s the usual clause ... that’s in every contract. That just says ... eh ... it says ... eh ... “If any of the parties participating in this contract are shown not to be in their right mind, the entire agreement is automatically nullified.”
Chico: Well, I don’t know ...
Groucho: “That’s in every contract; that’s what you call a sanity clause.”
Chico: “You can’t a fool a me; there ain’t no Sana-tee Claus.’ ”
- The Marx Brothers in the movie - A Night at the Opera, 1935
The Usual disclaimers ...
This chapter discusses the issues surrounding the protection of your source code and other intellectual property (IP) when you use offshore outsourcing. I am not an attorney, and the content of this chapter is not a replacement for good legal advice for your specific outsourcing situation. My goal is to give you some grasp of the issues so you can discuss them intelligently and make good decisions. Do you need a sanity clause in your outsourcing contract? That’s up to you and your attorney!
Software companies are concerned about putting their intellectual IP at risk when using offshore outsourcing. But you can also be so protective of your IP that you can overlook the opportunity to use low-cost offshore resources. How do you give your IP the right amount of protection? Are you being promiscuous with your IP, or overprotective?
Many years ago I worked for a software company that licensed a copy of its software to the U.S. Navy. I flew to San Diego to do the installation. Even in those days, security was a notch higher than at most companies I visited. After checking in at the guard shack and meeting my escort, I was ready to get to work.
But first my escort had to find a third person authorized to bring my tape into the data center so we could read in the software. Then more authorizations were needed to allow installation of the software on their Univac computer. The installation process dragged on.
During one of our many breaks, I was escorted to the men’s room. Along the way I passed someone’s cubicle with a big sign on the wall. It said “My job is so secret, I don’t even know what I am doing!” That pretty much summed up my experience that day. The point is that sometimes the need, or perceived need, for confidentiality and security adds a great deal of inefficiency and cost.
Software company executives consider their software IP to be their highest-value asset. But is it? How about your sales contacts and deep knowledge of the market you sell into? The actual software and the work that goes into creating it are often just a commodity.
But IP risk is an important criterion you can use to decide whether outsourcing your software development is right for your company.
