Project Liabilities: how to reduce them?

Every right implies a responsibility; Every opportunity, an obligation, Every possession, a duty.
~ John D. Rockefeller

[otw_shortcode_dropcap label=”S” font=”Dancing Script” background_color_class=”otw-blue-background” size=”large” border=”border” border_color_class=”otw-silver-border” shadow=”shadow”][/otw_shortcode_dropcap]oftware in the late 90s, on-demand apps in the 2000s and AI now. Technology is an industry that albeit few slumps is likely to be a goldmine of opportunities. This probably explains how IT project management is an industry that is very sensitive to embracing structural methodologies like Agile and PRINCE2.

Yet, when it comes to project liabilities as such, in addition to the classic risk management approach, managers need to consciously work on minimizing project liabilities in ways that factor in the ‘human interest’, after all, those who write codes and those who utilize the products you launch are not robots (yet)!

So, in this article, we try to understand the laws that can protect original software as well as other aspects that make security and professional liability immediately relevant areas of concern.

Be aware of intellectual property rights

A software is an asset that is governed by intellectual property rights. Given their intangible nature, the right of their ownership is protected by rules that clarify the specifications with regard to both legal implications as well as benefits. Considering how we live in a rather ‘open source’ friendly world, it is important to minimize your project liabilities with a good understanding of the following types of intellectual rights: 

  • Patent – Awarded only to certain chosen ‘inventions’ as such, it is a 20-year permit (lawful monopoly as some people phrase it) to make and sell the product that you carry the patent for. Typically, you will need to register your patent with the required information about all its functionalities, that will be made publicly accessible. Software patents though are not easy to achieve, given how they have to add value to the world of technology without steps that are obvious or already known. With an extremely viable financial component that lets you have ‘market exclusive’ algorithms and functionalities, patents justify the time that goes into the research behind obtaining a product that is worthy. Also, the implications of using a patented product without permissions include financial liabilities even when you don’t have actual access to the patented product itself.
  • Copyright – Slightly different from the patent, with a copyright, your idea in a particular form is alone protected. In case of the software itself, your source code and value-added specific functionalities can be protected. While copyrights are entrusted to the creators of all original work without having to actually obtain it yourself, you will always need to be mindful of infringement actions. Without the permission of the owner of a copyrighted product, you cannot possibly make different versions of it or consume it commercially. Apart from these two stronger rules as such, trade secrets which are exclusive to the business, in terms of the technology or machines that it has access to and trademarks that protect the identity of the products are areas project managers must be aware of. Here is a detailed and insightful article on software rights by Freibrun Law for future reading. 

Make security your biggest priority

If there is anything we’ve learnt from the recent Facebook data debacle, it must be that of prioritizing security even more than we did earlier. Considering that, the software products you build and sell must take into account the sensitivity of user information and the way it handles the privacy of end-users. Data breaches and compromise of users’ security can be catastrophic when an end-user sues or claims for compensation.

Besides, if you are a b2b solutions provider, you wouldn’t want a business’s details taken advantage of by a competitor, which besides ruining your own product’s reputation can also be disastrous for the business itself. A good way to approach this is by ensuring that your development team takes fixing code vulnerabilities seriously. Besides, you must never take users trust for granted with regards to the information they share. And ultimately, date security also borders the realm of good ethical practices, the extent of which, you as technology providers must introspect.

Define professional liability

Liabilities in terms of a developer or an IT consultant leaking your trade secrets can play havoc in the way your business operates when it comes to the overall organizational well-being. While you cannot always hold employees, who as individuals are free to get ahead in their lives liable for joining the competition, you can always limit the extent of the damage by having smart clauses that define professional liability as such.

Defining professional liabilities of individuals is all about walking the tightropes of ethics, HR values and professional call of duty in itself. As a business owner or a project manager, you can learn the subtleties of such clauses and expectations best with time. It helps to have legal consultation while designing your employee contracts if you think you are developing a product that is particularly sensitive. Always remember that we live in the digital age where ‘oversharing’ as the norm has opened a pandora box of sorts.

Most importantly, your code of professional ethics needs to uphold quality and the fact that your team is answerable to the clients who consume the product.

The human resource perspective in technology

You can take care of your servers and codes all you want. But the ball most often remains in the court of your employees. Risk mitigation, therefore, in addition to the contingency plan that is in place, also remains on a project manager’s code of ethics. This, in fact, is a huge area to ponder over given how ethics, on their own rely on the objective of the projects you are looking to complete, as well as the way resources on projects are treated.

As a result, your work culture on its own will begin to dictate the level of precaution given to security as such, as well as define the kind of products you are looking to build for your audience. Remember to prioritize ethical, skill-based complete utilization for your employees and set clarified project goals. They will soon yield tangible results that stand the test of time.

Your IT project liabilities can diminish with time and be something you don’t have to plan to have a buffer budget for, as long as the heart of your project is in the right space!


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