Intellectual Property is one of the most precious resources of your enterprise and must be properly protected. You must have your Intellectual Property safeguarded failing which you will face major problems once you start outsourcing. Your IP must be protected legally, physically and electronically.
Protecting Intellectual Property Legally
• Make an effort to understand the culture and legal system of the provider’s country.
• Learn about out how IP rights enforcement works in the country you are outsourcing to.
• Establish the country’s legal system that will regulate and have control over any agreement disputes.

• All acquiescence to audit procedures should be clearly defined before entering into outsourcing relationships.
• Individual privacy concerning relevant database protection obligations must be imposed.
• Agree upon a very clear contract that specifically addresses business knowledge and issues related to in IP- and make sure that the provider will be responsible for employee behavior which will enable you to steer clear of disagreements avoid litigation and assure the necessary protection.
• Ensure that you can depend upon non-compete and non-disclosure agreements with the provider in order to maintain confidentiality of important business information.
• Source code ownership and licensing must be made clear.
• Deliberate issues regarding open source software.
• Identify the system to be followed in case of the negotiation and resolution of any dispute.
Protecting intellectual property physically and electronically
• Data security must be considered a necessity.
• Allow access to all information to only a limited number of people.
• Make the issue of what information can and cannot be shared very clear to in-house employees.
• Vital information, such as passwords, source code, and access codes, must be protected and should be available only to employees where absolutely essential.
• Your vendor should use only computers that do not have removable media which will reduce the chances of illegitimate access to your IP.
• Make use of all available means of preventing breaches of security with electronic environment such as encryption, virtual private network,(VPN) and firewalls
• Ensure that the provider employs security services such as video monitoring, intrusion detection, mechanical and electronic access control, and the like.
• Ensure that any data in the process of being tested does not reveal vital or real information.
• The original copy of the source code must be preserved.