How much IP is in your code? This is a question that arises consistently in our conversations with ISVs and Software Developers. The answer is that it very much depends on the individual application and how it is deployed.
There are a number of issues that need to be considered such as:
- Is there real IP in the application code?
- Is the IP of any real value on its own – does the application need particular hardware or machinery to work with?
- How much value would you assign to your IP? Can competitors gain an advantage from this?
- How vulnerable is my IP? Is it easily accessible through reverse engineering of the code?
Every application is potentially different in terms of its IP value and how easy it is for competitors or hackers to get access to it. There are many Generic Applications with little or no real value in the code. There are other applications that have significant IP value but which are worthless without the specific hardware or equipment that they are designed to work with. But there are also applications with significant IP value which are potentially highly vulnerable.
The application execution environment is very relevant. Native or machine level code can be reverse engineered but it takes time and effort. Applications developed in an IL environment such as .NET can be reverse engineered in minutes.
IP protection and in particular prevention of reverse engineering have typically been left to the Engineering team to worry about. That’s fine if there is no substantial value in the IP but potentially dangerous if the IP is important.
The real responsibility for assessing the value and importance of the IP should rest with the Business owners. They are the people who should have a better appreciation of what is of value and what is not. Software start-ups will often spend months convincing VCs of the value of their IP and then neglect to take the appropriate steps to protect their asset and their competitive advantage.
So – who makes the decision in your business? The Tech Team or you as the Business Owner?
