Offshoring Leaves Software Firm…Not So Jolly

August, 2004

As reported in Computerworld, less than three months after offshoring its software development to India, Jolly Technologies is having difficulty protecting its intellectual property.

The company said that according to a report obtained from its branch in India, a recently hired software engineer used her Yahoo email account, which now allows 100MB of free storage space, to upload and ship the copied files out of the research facility. The company detected the theft and is trying to prevent the employee from further distributing the source code and other confidential information.

Jolly thought it had covered its basis by having its Indian employees sign an employment agreement that prohibits such actions. However…

Though the Indian branch of Jolly Technologies requires employees to sign a similar employment agreement, the sluggish Indian legal system and the absence of intellectual property laws make it nearly impossible to enforce such agreements, the company said.

Because of this incident, Jolly has halted all development in its Indian development center.

This is the sort of problem that many U.S. companies do not recognize as a risk in offshoring software development.

August 2004