Hiring freelancers is a practical way of employing workers on the fly as needed. It doesn't make any financial sense to hire a full-time employee for a small project. You can get a young staffer to fix an image in Photoshop, but making artwork for your marketing collateral is different (unless said millennial turns out to be a graphic designer on the side).
However, there are pitfalls in crowdsourcing, especially in terms of intellectual property. Here are the risks of contracting out work and how to avoid them.
3 Financial Pitfalls of Freelancing Work
Dispute over Profits
Short-term projects are ideal candidates for outsourcing. For example, outsourcing mobile app development is efficient when you’re building a complementary app for your website or physical store. When all goes well, the product may end up being valued at millions of dollars. However, if you don't have clear intellectual property assignment in your agreement, the mobile app developer may have a claim in your future profits. Unless you've made a mutual agreement over profit sharing, this is a legal hurdle that will further cost you time and money.Lack of Protection
While ideas can't be stolen, design and features can be replicated. If other businesses stumbled upon the same developer you hired, which unfortunately for you “borrowed” some ideas from your project, your product may get ripped off by competitors. Hiring a freelancer is simple and informal, which makes it vulnerable to loopholes.Turn off Investors
Cool, you have a brilliant idea for a product that will revolutionise the internet! But who has the legal right over the product? This is one of the key questions that investors will ask. Failing to do your own due diligence immediately sends a negative message.4 Easy Steps for Intellectual Property Protection
Understand who the creator of the work is.
The person who is assigning the intellectual property rights should be the creator. So make sure that your contractor assigns it to you before any work is done. Also, make sure that they don't sub-contract work without your knowledge. If this happens, their copyright is useless. The original creator may own the copyright. It's not effective even if your contractor assigns it to you on their behalf.Understand jurisdiction
Pursuing litigation over intellectual property rights with a third party overseas is nearly impossible. Offshore outsourcing contracts use a binding arbitrary clause, but this is onerous for a small business. The most that you can do is to stop a third party from establishing a clone locally. So make sure that you have a solid contract or legal agreement in place to avoid disputes.Secure terms of service.
Crowdsourcing platforms have default contractor agreements, but they may not be enough for your type of engagement. Make sure that your contract has the necessary non-disclosure agreement and assignment of intellectual property rights.Write it down.
According to Section 196(3) of the Copyright Act 1968 (Cth) under Australian law, property is only legally assigned by a written and signed document. It's not enough to have a simple email exchange with a contract in PDF form, unless it’s signed by the contractor.The workplace has significantly changed, thanks to the internet. Workers can now offer their trade online and cut through the middlemen of HR. But this also creates a sense of complacency that you wouldn't have if the transaction was done in real life. You can't be too cynical, but you also need to be careful.
Post a Comment