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Offshoring to India: Are Your Trade Secrets and Confidential Information Adequately Protected?

By Sonia Baldia Despite recent growth in other emerging markets, India continues to be the number one destination for outsourcing services involving information technology and business processes ("IT/BPO services"). In recent years, moreover, a new model of global sourcing to India known as knowledge process offshoring or "KPO" has taken hold in addition to the remarkably successful Indian market for IT/BPO services, with India emerging again as the global KPO"hot spot." KPO involves the offshore outsourcing of knowledge-driven or "high end" processes that require specialized domain expertise, including such varied areas as R&D, insurance underwriting and risk assessment, financial analysis, data mining, investment research, statistical analysis, tax preparation, engineering and design, animation, graphics simulation, medical services, clinical trials, legal services, and more. As offshoring of services to India moves up the value chain from IT/BPO services to KPO, protection of intellectual property (IP), including any trade secrets and confidential information, that may be transferred or created in India becomes an even more critical concern for the offshoring customer. IP concerns must be addressed knowledgeably to achieve and maximize the benefits and strategic incentives the offshoring model offers without losing control of critical customer IP. This article raises some of the key issues that any offshoring customer should carefully assess so as to mitigate the risks associated with offshoring trade secrets and other confidential information to India. When offshoring a "high end" process or functionality to India, often much of the knowledge transferred offshore (for example, source code, formulae, designs, specifications, or experimental data) is confidential in nature and generally not suitable for local registrations in the form of patents. It, therefore, becomes critical for the US customer to seriously consider - before it begins the offshoring process -- how it will best protect this information to maintain its competitive advantage. A primary concern for a US customer should be the Indian service provider's ability and willingness to safeguard the customer's trade secrets and other commercially valuable confidential information against misappropriation, misuse, unauthorized disclosure, sabotage or theft. To continue reading click here.

Full post as published by The Trade Secrets Vault on November 30, 2008 (boomark / email).