Chapter 7
Problem 9: Evaluating Ownership and Licensing Terms
You are reviewing a proposed contract for Contair in which
a vendor will create a software program "from scratch" for Contair's use,
both by Contair and by Contair's customers. Consider the proposed
intellectual property clauses below and determine where each clause falls
on the scale from (1) to (8) in Note 1 at the end of Chapter 7 of the main
volume. Also, consider what additional questions you might ask Contair
and the vendor to adequately assess the proposed language of each clause.
(a) Contair and Vendor shall each retain ownership of, and all right,
title and interest in and to, their respective, pre-existing Intellectual
Property (as hereinafter defined), and no license therein, whether express
or implied, is granted by this Agreement or as a result of the Services
performed hereunder. To the extent the parties wish to grant to
the other rights or interests in pre-existing Intellectual Property, separate
license agreements on mutually acceptable terms will be executed.
(b) Vendor grants to Contair a royalty-free, paid up, worldwide,
perpetual, non-exclusive, non-transferable license to use any Vendor Intellectual
Property incorporated in any Deliverable, solely for Contair's use of
that Deliverable for its internal business purposes. Vendor shall
retain ownership of and unrestricted right to use any Intellectual Property.
The Services performed and any deliverable items produced pursuant
to this Agreement are not "works for hire."
(c) As used herein, "Intellectual Property" shall mean inventions
(whether or not patentable), works of authorship, trade secrets, techniques,
know-how, ideas, concepts, algorithms, and other intellectual property
incorporated in any Deliverable and first created or developed by Vendor
in providing the Services.
Definitions:
(i) "Intellectual Property Rights" means patents, trade marks,
service marks, design rights (whether registrable or otherwise), applications
for any of the foregoing, copyrights and database rights, and all other
similar rights or obligations whether registrable or not in any country
and "Intellectual Property" shall be construed accordingly.
(ii) "Background Intellectual Property Rights" means Intellectual
Property Rights embodied in software, concepts, ideas, information,
data, drawings, reports and documentation which are conceived, originated
or generated other than in carrying out this Contract.
(iii) "Foreground Intellectual Property Rights" means Intellectual
Property Rights embodied in any software, concepts, ideas, information,
data, drawings, reports and documentation which are conceived, originated
or generated in carrying out this Contract.
a) The parties agree that ownership and rights of use of Intellectual
Property shall be as set out in Clause (b), below.
b) Ownership and rights of use of Intellectual Property Rights shall
be as follows:
i) Ownership of Background Intellectual Property shall not be
affected by this Agreement.
ii) Foreground Intellectual Property shall be owned by Contair.
Vendor and its personnel shall be entitled to utilize concepts,
ideas, techniques or know-how obtained in the course of performance
of this Contract for others at any time in the future. Neither
party shall have any obligation to limit or restrict the job duties
of its personnel or to pay royalties for any work resulting from these
concepts, ideas, techniques or know-how.
iii) Vendor shall grant to Contair a non-exclusive, royalty free,
world-wide, irrevocable license under its relevant Background Intellectual
Property Rights to enable Contair to use, modify, maintain, and exploit
the Foreground Intellectual Property.
All right, title, and interest in and to any deliverable items, together
with any software, documentation, utilities, tools, methodologies, specifications,
techniques, and other materials or know-how developed by or on behalf
of Vendor during and in the course of providing deliverable items, including
any intellectual property rights therein (collectively referred to as
"Other Intellectual Property Rights"), shall become the sole and exclusive
property of Contairr as a work made for hire. If any deliverable
items or Other Intellectual Property Rights are not considered works made
for hire owned by Contair by operation of law, Vendor hereby assigns ownership
of copyrights in such deliverable items and Other Intellectual Property
Rights to Contair. Vendor agrees to perform, during and after the term
of this Agreement, all acts deemed necessary or desirable by Contair to
permit and assist Contair, at no more than Vendor's published hourly rates
current as of the date of such services, in evidencing, perfecting, obtaining,
maintaining, and enforcing Contair's rights and/or Vendor's assignment
with respect to such assigned rights in any and all countries. Such
acts may include, but are not limited to, execution of documents and assistance
or cooperation in legal proceedings.
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