Buzz Archive:
Outsourcing R&D to India: Pitfalls to Avoid

by Anand Sharma and Venk Krishnamoorthy of Finnegan Henderson Farabow , 5/15/2007

In today's global marketplace, an increasing number of technology driven companies include R&D outsourcing as part of their business practice. Some industry sectors even consider the viability of technology outsourcing as a prerequisite to any high-impact business plan.

Many technology outsource providers base themselves in Southeast Asia and, more specifically, India. In fact, according to a recent Newsweek publication, more than 125 of the Fortune 500 companies now possess R&D bases in India, and far more share technology-outsourcing relationships with Indian companies. This phenomenon may be attributed, at least in part, to India's thriving economy and its highly talented (and more affordable) English-speaking workforce. Regardless of the rationale, these outsourcing relationships, based as they are on innovation, implicate a host of intellectual property concerns related to patents.

Any R&D outsourcing relationship with an Indian provider therefore necessitates the need for competent and experienced patent counsel, from early contract deliberations to later patent filing strategies. The success or failure of an outsourcing relationship may, in fact, depend on a practice of identifying and addressing relevant considerations early on in the business process. This week, international IP expert attorneys Anand Sharma and Venk Krishnamoorthy of Finnegan Henderson Farabow highlight the key points of patent strategy and contractual arrangements that should be considered when partnering with India.