Question
Our development team is rather small and we constantly run into bottle necks because of the lack of manpower. For financial reasons, we are hesitant to grow our team with permanent hires, so we are currently looking into outsourcing options. However, there seem to be legal risks attached, I have heard of IP theft and such. What exactly are the (realistic) legal risks that come with outsourcing software development and how to we work around them?
Answers: 1 public & 2 private
In a very short answer to your question, I would ensure that any contract you have with an outsourced development team has language indicating that any IP rights emanating from the work performed by the outsourced team is owned by your company, and that the work performed is "work made for hire".
Software development evokes copyright protection and the phrase "work made for hire" is important in that context.
Enforcing such a contract is another legal matter, and you would hope that the threat of a law suit (e.g., breach of contract) would be enough to dissuade any possible theft.
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