This contract tip is about acknowledgments that the other party owns all the intellectual property rights (IPR) in a product.
I find this concept in almost every intellectual property provision that I review. And I always think the same thing:
"How would I know that?"
The answer?
I wouldn't.
At least not in the context of a typical commercial contract where there is no diligence into whether the counterparty does in fact own the claimed IPR.
In my view, it is like asking you to acknowledge that I have $1,642 in my bank account. It may be true and I may be able to supply you with proof. But until I provide that proof, how could you agree that it is a fact?
I'm much more comfortable with contractual statements based on what I do know or actions that I will or will not take. Here are some examples of those statements:
- As between Buyer and Seller, Seller owns all IPR in the Product,
- Seller claims it owns all IPR in the Product, and
- Buyer hereby assigns and shall assign any IPR it has in the Product.
- Buyer agrees not to challenge the validity of IPR in the Product.
My preference is to delete it or add the "As between Buyer and Seller " wording. But I often just leave it alone. I focus on more important problems with the contract. It doesn't strike me as that risky in a contract that has little to do with IPR.
What's your view of this acknowledgment without diligence backing it up? How important is it in our typical commercial contracts?
