In practical terms, businesses do not normally create IP – individuals do, such as employees or consultants. But it is crucial for businesses either to own or to have the right to use that IP. Do your employment and consultancy contracts give your business all the rights it needs?
Let's say you have commissioned a developer to write some software for your business, which should give you an advantage over your competitors. If the contract is silent about the resulting IP, legal title will remain with the developer, who may well be able to earn extra revenue by licensing it to your competitors. At best, you will probably only have a very limited, implied licence to use the software in your business.
- If the consultant is to remain the owner of the IP, ensure that the scope of your licence to use the IP is sufficient for your purposes and consider whether you should benefit from exclusivity.
- If you wish to own the IP, it is crucial to provide for an assignment. This needs to be in writing, signed by the consultant (as assignor).
- Is there an adequate definition of the relevant IP? It may be important to distinguish between "background" IP (which might remain the property of the consultant) and the IP that you wish to use in your business.
- Consider a "further assurance" obligation; this provides that the consultant will provide such assistance as the customer may reasonably require in order to transfer ownership of the IP or deal with any registration issues.
- If you are to own the IP, consider a "waiver of moral rights"; moral rights potentially allow the consultant to insist on being credited as author of copyright works (other than software) and object to "derogatory treatment" of the work.