I once spoke with a SaaS founder who had found themselves between a rock and a hard place. They had, in their mind, innocently “borrowed” some code from a competitor’s website. Their site had been up for a long time with the “borrowed” code and they were starting to see a solid return in their business. Then a letter came from the competitor’s law firm. No one wants to be on either side of this story, and that is why understanding intellectual property (IP) and how not to trip over someone else’s is so important. You don’t want someone pointing a finger at you.
This article is about the inbound side of IP: making sure what you ship does not infringe anyone else’s rights. For the outbound side—what you own and how to secure it—see What You Own and How to Protect It: IP for California Software Companies.
Understand the Basics
You might assume “IP infringement” sounds like a distant threat. Yet it can happen in subtle ways. Even an innocent act—such as incorporating an open-source library without reading its license—can cause big problems. It may lead to someone claiming you owe them money or that you violated their terms. In a SaaS business the three places it happens most are the open-source code you build on, the name you launch under, and the work you paid a contractor to create.
Read the Open-Source Licence Before You Build On It
If you plan to build on existing code, make sure you have permission to do so. Even with open-source software, read the fine print. It may impose limits on commercial use or distribution, or require you to share your own changes. Taking time to learn which licenses apply and how they affect your code saves you stress and legal fees. Keep an inventory of the libraries and modules in your product and the licence each one carries, and check it before every major release.
Clear the Name Before You Launch
Research comes first. When you develop a new SaaS product, make sure your branding—logos, product names, and slogans—doesn’t clash with an existing mark. A search before you commit is cheap. Rebranding after a demand letter, with a domain, a customer base, and marketing already built around the name, is not.
Own What Your Contractors Build
A handshake might seem enough in the early days, but it won’t protect you if a dispute arises. If you hire a designer or developer, verify you own the finished product or have the right licenses. Many founders assume that paying for the work makes it theirs. Under 17 U.S.C. § 101, a contractor’s work is not a work made for hire unless it falls within one of nine enumerated categories and is covered by a signed agreement saying so. Most software and design work does not fit those categories, so an express written assignment of the copyright from the contractor to your company is required. Written agreements—such as Non-Disclosure Agreements (NDAs) and contractor agreements with an assignment clause—keep everyone honest and keep your code yours.
Address Common Worries
“Is this process too expensive?”
It doesn’t have to be. Start with the basics: confirm your brand is clear of conflicts, ensure your code licenses are correct, and get assignments from your contractors. An attorney can help you tailor a plan that fits your budget.
“Will I scare away partners if I talk about IP?”
Typically, no. Serious collaborators respect clarity. They’d rather know up front than get stuck in a legal tangle later.
“What if I already used code without checking?”
It’s never too late to review your libraries or modules. If you see an issue, address it now and update your terms or licensing as needed.
Keep Learning
Rules and regulations around IP evolve. Keep an eye on industry updates and changes in laws. You don’t have to memorize legal codes. Just stay curious and cautious. Periodic reviews with an attorney or in-house counsel can keep you ahead of the curve.
Avoiding IP infringement is about respect—respect for your own innovations and for those of others. Taking these steps will guard your SaaS, calm your worries, and let you focus on what matters: building products that serve your users. With a little foresight, you can steer clear of messy disputes and stay confident in the value you bring to the market.