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Outsourcing and its effect on Trade Secrets

Trade Secret Theft "Secured facilities and rigorous employee screening can cut the risk." From www.computerworld.com Taking work offshore may cut costs, but it still comes with a not-so-hidden price. Asian countries, including the No. 1 outsourcing destination, India, have weak or untested intellectual property laws, inefficient courts, and financial and public records mechanisms that make it difficult to conduct employee background checks. That doesn't mean that intellectual property sent to reputable offshore developers is more likely to be stolen and sold than it is here. Sophisticated U.S. and Canadian companies have lost valuable intellectual property in their home countries because of dishonest employees and hackers. Employees in India and elsewhere aren't any more dishonest than workers here. But because overseas court systems and laws aren't as strong as in those the U.S. and evaluating potential employees is more difficult overseas, the odds of intellectual property theft could be higher. U.S. businesses are also sending valuable code to regions of the world with high piracy rates. In China, for instance, 92% of the software installed on computers is pirated, according to a recent study by IDC and the Business Software Alliance. In India, the piracy rate is 73%, and in the U.S., it's 22%, the lowest rate in the global study.

Full post as published by The Trade Secrets Vault on October 14, 2008 (boomark / email).