How to Protect Your IP and Secure Data When Outsourcing | Blogs | nCircle Tech
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Nowadays outsourcing has become a common practice due to a variety of reasons. In fact, a recent survey revealed that 43% of USA companies outsource their programming jobs with varying reasons including cost savings, speed of development, access to talent, and reduced time to market. Though outsourcing makes your job a lot easier, it comes with a risk of insecurity of protecting your intellectual property.

Why is it essential to have a strategy in place for protecting your intellectual property?

Outsourcing your development efforts can be a risky undertaking as it often involves handing over your company’s confidential information to potential competitors. Given that your company is working on something with unique features that differentiates the product in the marketplace, your IP protection should be a critical component. For any business, intellectual property protects more than just an idea or a concept – it protects genuine business assets that may be integral in the overall long-term viability.


Usually, IP consists of everything and anything that differentiates your company from your competitors. It can include inventions, artwork, literary pieces, designs, symbols, trade secrets, and images. We all know that Intellectual property can be protected by the law in the form of patents, copyright, and trademarks, however, what about the software modules, source codes and development assets? They also need to be protected as you outsource the work by taking care of the following aspects. 


How can you ensure to protect your IP?


Comprehensive Work for Hire Agreement

As per the copyright law set in the USA for software development gives the code ownership to the writer of the code. Though it makes sense for writers to keep the ownership of what they have written, however, when you are outsourcing software development you should assign all the rights and ownership of code as well as developed software exclusively to your company.


This can be done by assigning everything created under the contract as a “work made for hire” and you will gain ownership of all assets created including wireframes, designs, documentation, diagrams and code.


Non-Disclosure Agreement (NDA) 

Non-disclosure agreements (NDAs) are one of the best ways to protect your IP and secure data when outsourcing which usually is signed between your company and the company or individual to whom you are outsourcing the software development. This agreement guarantees that your great development idea will not be shared with anybody and remains a secret until you decide to reveal it to the world.


Joinder Agreement

You have an agreement with the outsourcing firm, but it is important to have some agreements directly with the individuals who are working on a project in order to ensure those individuals can be held accountable directly by you for any violation. A joinder agreement is what puts responsibility not just on the firm, but on their individual employees as well.


Alternatively, a joinder can be used when an agreement will likely have additional parties in the future, but those parties have not been determined when the contract is signed. The original agreement can require that any subcontractor has to sign a joinder to the original contract stipulating that they will also be subject to all of its terms and conditions.


Non-Compete Agreement

A non-compete agreement ensures that individuals who worked on your project cannot compete with you in any way for an agreed-upon amount of time.


Limit Server & Data Access

Data access is crucial in protecting the security of your Intellectual Property. We don’t give all our employees full data access but only an anonymized part of it on their local copy. This allows us to have control over which data could be taken away. Only selected employees to have access to the servers to do the maintenance jobs, so access to the data is limited.

data access

Apart from these, here are some of the additional measurements to prevent the accidental sharing of confidential information while outsourcing your product/software development.

  • Limiting the number of people on the outsourcing team who know mission-critical information 
  • Ensuring there is a secure communication channel between your company and your outsourcing partner 
  • Establishing firewalls, encryption, and VPN services that will help to prevent online security breaches 
  • Protecting source codes and appointing a member of your staff to keep copies of the originals 
  • Understanding and maintaining IP protection standards for both countries as necessary
  • Routinely checking for breaches or challenges with open source software that you and your partner may be using

Also, additional due diligence inquiry can be done by determining the following aspects when you are outsourcing software development.

  • Will your company own all IP improved or created during the outsourcing relationship? 
  • Which rules and regulations will keep them under your ownership? 
  • Is it possible that the outsourcing vendor will own all IPs, which will require you to take ownership through licensing agreements? 
  • How will you facilitate that process?
  • Will both parties have ownership of IP that is executed through a formal agreement based on each side’s business needs? 
  • Who will draw up this agreement – and how will it be enforced?

IP protechtion

How nCircle ensures IP Protection and Data security for our Customers? 

nCircle Tech has created an extensive strategy to ensure our client’s IP protections and overall data security which consists of undertaking various activities under Personnel Security, Network Security, Server and System Security, Physical security, Operation Controls and Backup policies. We have set certain rules and policies to take care of the IP & Data protections for our customers as follows –

  • nCircle Signs NDA that clearly states clauses on Information confidentiality, return of shared information, limited sharing of information with relevant team members and IP rights for any outsourced work defined in the scope of work.  
  • We have established confidentiality agreements with team members along with watertight service agreements clearly stating IP rights of developed code, software and APIs  to customers which strictly prohibits the distribution of Confidential information 
  • Our agreements clearly mention any pre-owned or licensed IP that is included in the client’s Product development. Further, all the received information and developed IP is deleted from our developer machine once the product is delivered to the customer.
  • Strong Establishment of firewalls, encryption, and VPN services that will help to prevent online security breaches
  • We also offer a dedicated leased line upon special request from clients
  • All our systems are secured with Firewall authentication as well as have USB and CD disabled to avoid any potential breach.
  • 24*7 CCTV coverage and Biometric secured entry and exit in office premises assures the physical security of the client’s assets 
  • Desktime has been installed on all machines for remote working to track user tasks lists and access control.



As a comprehensive product development studio, we’ve been building our portfolio and uniquely transforming product development services for years to gain more trust in the eyes of our future partners. We ensure to the core that our customer’s IP is protected and their ideas are secured by making our clients feel confident about the services we provide. We simply can’t afford to let our clients feel insecure, hence we have been following a stringent policy for our client’s IP protections by constantly improving the security of our development process. The security and IP Protection measures listed above have proved sufficient to instil trust in our clients and avoid breaching the Intellectual Property rights at any point. 

However, should anything extra be needed to make you feel more safe, protected, confident about your cooperation with us, we request you to make the necessary suggestions to us and we will just carry those out for you.

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