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Outsourcing Innovation and Ideas: Legal Considerations for Crowdsourcing and Freelancing

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Commerce that involves knowledge is rapidly growing, along with new models for businesses that are emerging as thought leaders in their fields. New vocabulary describing these knowledge workers and thought leaders, and new models of knowledge acquisition for business use are becoming more common. Business can get ideas, actionable ideas to be used for commerce, from a number of internal and external sources. The use of outsourcing for knowledge, innovation, and ideas is growing. What are some of the constraints and legal considerations?


The new models for a business to acquire ideas and knowledge that can be used for commerce involve three tiers. The employees of a company, thought leaders with high engagement and loyalty and significant expertise in a field of study, are the people who seek out and screen new ideas. Many are calling this process 'curating' ideas, such as an art gallery owner would do, with a call for submissions, then a rigorous selection process.


Freelance workers can also be thought leaders, but are more commonly considered knowledge workers, those with knowledge and skills for sale to the highest bidder. They are the ronin; business employees who are thought leaders are the samurai. There are a number of micro-labor platforms where freelancers and thought leaders can connect and contract for a service. The micro-platform has structures and contractual agreements in place that freelancers agree to before beginning work. These structures include non-disclosure agreements and transfer of intellectual property to the contracting thought leader.


The problem with thought leaders and knowledge workers developing innovative solutions to problems is that many were educated in the same thought-systems. If a group is asked a business question, those with graduate education in business and communication may very well all answer in a similar manner. The outliers, the real innovative ideas come from the crowd.


Crowdsourcing is a new process that allows thought leaders to curate ideas and innovative thinking from a group that thinks about problems in unique ways. Because those in diverse academic fields do not have the same problem-solving processes, they often come upon solutions by taking a different road.


There are now about 3.5 billion people on the planet who are connected via the internet and various social media platforms. They have such a diverse group of experiences, interests, and education that when they answer questions, some strange and brilliant ideas can emerge. Think of a focus group of people from every country on earth, every age and gender, multiple languages, who are all thinking about solving one problem. They often look at the problem as a fun contest, and creative thinking can win a prize in the end. That is what crowdsourcing platforms do.


The new crowdsourcing platforms, such as Eyeka and HeroX, are engines fueled by consumer goods. While they also work on issues related to social justice and environmental stewardship, companies developing new products are turning to the crowd to come up with innovative ideas. Some large companies have run their own crowdsourcing ideas campaigns, such as the Lay's potato chip flavor contests that are growing in popularity. But the majority of companies use a platform to serve as the organizing and curating system for the ideas. These platforms funnel the mass of ideas into idea groups and change chaos into a number of structured responses that the thought leaders can explore in more depth.


According to attorney Jake Posey, managing shareholder of The Posey Law Firm, PC, with these new micro-labor and crowdsourcing platforms, care should be taken to ensure that nondisclosure and intellectual property rights are secured, and that liability issues are carefully considered. Consider discussing the structure for using these innovative new idea generators with counsel.

Category: Small Business General Counsel Services

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