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Does outsourcing increase the risk of IP theft?

On Behalf of | Apr 11, 2022 | intellectual property law

Intangible property in the business world comes under the scope of intellectual property. Though trademarks, patents, copyrights and trade secrets are often illegally pursued for re-appropriation purposes, ideas play an important role in the success of your business.

Outsourcing is widely recognized as a production option that lowers costs and increases productivity. In spite of these undeniable benefits, outsourcing presents a serious threat to the security of your company’s intellectual property.

Protecting your IP rights

Intellectual property is critical to the development and success of your business, but the legislative protection you enjoy with IP rights in the United States is not guaranteed overseas. Common risks of outsourcing include threats of infringement, disclosure and total theft of trade secrets from either the outsourcing partner, the employees working on their behalf, or hackers making it through an unsecured network.

Third-party security connections are a primary concern when outsourcing, as the significant exchanges of confidential information and data required for a functioning partnership could expose your company to IP theft.

Addressing the risks

Before outsourcing, determine the vulnerability of the IP you already own across all departments. Such a security audit is a defensive action, but fully researching and auditing a potential outsourcing partner is an offensive move. Become familiar with the court system in the country you are working in and ensure that governing laws and jurisdiction applications are explicitly stated in the outsourcing contract.

Your IP rights face challenges from without and within. Due diligence must be a part of your process when developing an outsourcing strategy.