When a business is selecting an IP outsourcing provider, it weights up the advantages and risks of sharing sensitive information about its operations and property. Sharing information and assets with any third-party provider is a consideration not to be taken lightly. However, with effective practices in place, concerns can be alleviated, allowing the business to enjoy the benefits of outsourcing IP management to industry experts. Here are the key concerns to consider when assessing an IP outsourcing partner.
1. Data breaches
Security of intellectual property is a key concern for most IP departments when working with any outsourcing partner. The digital economy allowed for intangible assets to become significantly more valuable than tangible assets. Estimates in 2019 value intangible assets at 84% of the S&P 500. Given that these assets are generally stored and shared in digital format, this means that data security plays a key role in the future viability of a business.
Sharing these assets with a third party is understandably viewed as a potential data security risk. However, reputable IP outsourcing partners will understand these concerns and work with businesses to ensure the correct precautions are taken to mitigate risk. This includes establishing a secure network for information sharing, strong cybersecurity protection shields, physical measures for protecting data storage facilities, and administrative protocols for handling data, including planned measures in the event of a data breach.
An IP management partner can help businesses to determine how to protect their IP by providing a portfolio assessment. This enables the business to determine which assets are the most valuable, thereby providing guidance to direct their security resources adequately. Working with an experienced partner can provide the knowledge and experience needed to mitigate risk and improve your overall security by directing data security spend to the right areas to keep your IP safe.
Disclosing information to a third party can represent a risk of data breaches, especially if the third party subcontracts work to other parties. An IP outsourcing partner will understand this concern better than other outsourcing partners; after all, they are in the business of protecting intellectual property.
An IP partner will assist you in assessing the scope of work, so you can fully understand what services they provide in-house. This will help the business to define a confidentiality contract that includes data privacy and security agreements for all parties involved and also ensures that they are protected by law in all countries where IP outsourcing activities will be conducted.
The right IP management firm will also have staff that are an embedded part of your business. They provide advice and maintain collaborations across many departments within an organization. In this way, they have a unique point of view to catch potential risks in terms of how intellectual property is handled, which can catch confidentiality issues and prevent data breaches.
3. Unpredictable costs
The costs of outsourcing activities can vary across industries. A business may already have had a poor experience working with a third party to outsource another activity in their organization. Some third-party vendors purposely create confusing pricing agreements with hidden fees and surcharges that can show up in an invoice without notice. They may also try to sneak in certain services that are not required, resulting in an unexpected bill that doesn’t garner the value for money. This creates a general distrust of pricing when it comes to outsourcing services to third parties. Some businesses can feel like they need to micromanage their vendors to prevent unexpected additional costs. These might show up on their invoice when a service has already been delivered, making it difficult to contest.
When outsourcing IP, the costs can be predicted and discussed in advance before any commitments. Whether it’s a one-off project or the entire IP portfolio, the business can negotiate a flat fee agreement, which allows costs to be affordable and predictable. A single point of contact in the IP firm works with the business to manage relationships for all IP outsourcing workstreams, so the business doesn’t waste excessive resources tracking costs from different stakeholders. They can also provide advice on when and how to spend your IP resources to reduce overall costs and risk while maximizing results.
Effective management of intellectual property is essential to many businesses today. Therefore, it’s important to work with a partner for IP outsourcing that is trustworthy, established and transparent.