Every client who is considering offshore software development should be concerned about the legal issues associated with doing international business, and the reality of what a software contract can really do for you.
A big worry for clients is that the software company will steal their idea and develop it on their own. In practice, this is extremely rare because a simple idea is just enough to build a successful business. It takes marketing and industry know-how, for example, and the ability to execute the idea and bring it to market. So, in many cases this concern is unfounded although there are many legitimate cases where a client should worry and make sure they have a solid software contract in place.
Intellectual properly in general, however, is a different story. It’s not difficult at all for an overseas vendor to take liberties with your codebase, including ‘hard to know’ things like reuse of portions of your codebase for other clients. In these cases, your go-to mentality may be to ‘lawyer up’ and get your contracts organized well to protect yourself from potential issues.
This mentality, however, rarely works unless you are a large client with millions of dollars of development services being outsourced. For most clients, the potential costs and headaches associated with enforcing a software contract overseas far outweigh the value of the actual work. It’s hard to imagine a US client traveling to India or Russia, navigating the court system, winning a judgement, and collecting any damages from their vendor unless they have deep pockets and there is big money on the line.
In those cases, the best approach is to find a vendor you can trust, and invest in the relationship enough to maintain that trust long-term. A solid software contract is a must, but it’s mostly to ensure a good understanding between the two parties.
Dave Hecker
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