As your business grows and develops its product or service offering, it’s inevitable at some point that you will need external help. This help often comes in the form of freelance individuals, consultants and independent contractors, who are not employees of your business. However, business mistakes are common when dealing and engaging with third parties.
Here are three reasons to take precautions when using freelancers and independent contractors to avoid making these business mistakes:
Ownership of intellectual property
When you engage a freelancer, you will want to ensure that you own your new logo, marketing literature, website, or whatever is being created. However, as a general rule, it is important to note that it is the creator, not the commissioner, who retains ownership of intellectual property in the work created. Again, this is generally the case where an invention is developed by an independent contractor, even if the contractor was retained specifically to do the development work. This is often an issue, particularly when a business is in the process of being sold or needs to raise finance, as it becomes apparent that the intellectual property which the business believes it owns is in fact owned by someone else. This is a classic mistake when engaging independent contractors. A written consultancy agreement with your freelancer, such as a design agency or developer, is vital to ensure your business owns the creation or development work for your business going forward.
Are trade secrets safe?
To maintain the value of business information, or trade secrets, these must be kept confidential by any individual who may receive or develop them. Accordingly, steps should be taken to safeguard against loss, misuse or theft of this secret information when your business engages with freelancers and consultants. Given that much of the value of your business may lie in its trade secrets, you would not want your competitors to obtain this confidential information.
Clearance of rights
You should ensure that anyone you are engaging to provide work for your business has cleared all material being created or incorporated into the final project for your business. Whether or not this has been done, you will want to limit the risk of any infringement of intellectual property rights owned by third parties. For the same reason, if you are engaging others to provide work for you as part of a project for a client, you may not wish for them to be able to sub-contract this work to someone else.
Avoid business mistakes
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