This contract tip is about drafting intellectual property (IP) assignment provisions.
I often see provisions that say something like, "Buyer owns the intellectual property that results from the Seller's services under this Agreement."
This approach falls short in a few ways.
First, it doesn't say the vendor assigns the rights. It doesn't even include an agreement to assign in the future. It is just a statement.
Second, the statement refers to the intellectual property (the software code), not the intellectual property rights (the copyright covering the code).
Don't do that.
Instead, use explicit and unambiguous language of assignment, such as "Seller hereby assigns all of its Intellectual Property Rights in the Deliverables to Buyer."
In some low risk deals, that may be enough. But you should also consider whether to include these other provisions relating to your IP assignment (depending on the circumstances):
- an obligation to grant rights created in the future with the language "hereby grants and shall grant,"
- a grant-back license to the seller, if you will have the seller use the IP after the assignment date to provide services to you.
- related warranties, including warranties of title and non-infringement, as warranties offer a stronger remedy than a contractual covenant,
- an indemnification for breach of those warranties to ensure that your vendor covers any claims, and
- an exclusion from the cap on damages for liability relating to these IP concepts.
What else should the customer include?
