Addressing Legal Issues When Crowdsourcing Solutions

The increase in crowdsourcing requires both companies and crowds to have a better understanding of previously neglected legal issues. Focusing on the crowdsourcing of solutions, we raise and address two related questions: how... [ view full abstract ]

The increase in crowdsourcing requires both companies and crowds to have a better understanding of previously neglected legal issues. Focusing on the crowdsourcing of solutions, we raise and address two related questions: how and why organizations manage intellectual property issues when engaging in crowdsourcing activities? The answers lie in discussing the hazards of having inadequate intellectual property management strategies in place and the need to manage three considerations: two legal and one strategic. Legally, managers need appropriate ‘terms and conditions’ to (a) acquire sufficient rights from the crowd to achieve their objectives, and (b) mitigate exposure to liabilities associated with using materials submitted by the crowd. Strategically, managers need to accomplish these legal goals without dissuading participation by the crowd due to unnecessarily exploitative practices or onerous obligations. We present a number of examples demonstrating how companies have applied these legal and strategic concepts to various crowdsourcing initiatives and conclude with recommendations for managers and other practitioners.