Your First Contract! Now What? (Ownership of Your Work)

Issue: Ownership of Intellectual Property

In nearly every B2B agreement, there is a confidentiality section that spells out the intellectual property that each company is trying to guard. However, have you thought about the data and intellectual property that has yet to be created?

You may assume that because you created it, you can do whatever you want with it. However, your client could be thinking the opposite. Typically, you will see language here start with the word “assign”, as in you agree to “assign” all rights, title, and interest in the created intellectual property to the client.

If as a company you are planning to make use of works produced from your interactions with your client, or even if you just want to be able to use some part of the base code again, this language could get you in major trouble.

How to Manage: 

Negotiate a perpetual license. One option is to negotiate a license with your Client. You can first try to negotiate ownership and a license for the Client, but if that doesn’t work, you should try to negotiate a license for yourself.

Ask exception for aggregate or unidentifiable data. If you have a desire to use the aggregate information, but have no need for the specific identifiable information that is created, you can negotiate for this as well. That way, the client feel protected and you can get what you need as well.

Negotiate exception for Publicity. One likely piece of language important to you will be the use of the client company’s name for promotional purposes. And why not? You are a new startup and other prospective clients will want to know who you are working with. Many startups have gotten in trouble by marketing their partnership with clients without receiving the right permission. Asking ahead of time will save you future headache, and keep your clients happy with you.

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