I was asked a question about the terms of this contract by a friend. Not entirely sure why as I am not a lawyer, but thought I would ask here on his behalf. We are concerned about section 12, regarding intellectual property law: 12 INTELLECTUAL PROPERTY 12.1 Subject to the terms and conditions of this clause 12, a party’s Background IP remains vested in that Party. 12.2 The Contractor grants the Company a non-exclusive, perpetual, royalty-free, irrevocable, transferable licence (with the right to assign and sub-license) to use the Contractor’s Background IP to the extent necessary to use the Goods and/or Services, and assigns to the Company all Project IP upon the creation of that Project IP. 12.3 The Company grants the Contractor a non-exclusive, royalty-free, revocable, nontransferable licence to use the Project IP and the Company’s Background IP to the extent required to perform the Contractor’s obligations under this Purchase Order. Background IP / Project IP is defined as: Background IP means any intellectual property owned or licensed by a party which that party makes available, contributes, brings to or uses in connection with this Purchase Order. Project IP means all intellectual property (present or future) created, discovered or coming into existence as a result of, for the purpose of, or in connection with the performance of this Purchase Order My friend provides consulting services but is also a software vendor. It is common for the consulting services provided to make use of the software for sale. This would be analogous to, for example, an accountant who sells audit software but also performs audits (often using his own audit software). I read the agreement as quite onerous. If he were to agree to this contract and his software were used, would he then have to grant a non-exclusive, perpetual, royalty-free, irrevocable, transferable license, on the grounds that his software is background IP which was used in conjunction with the services provided? In fact on reading this, does that not also apply for any software used? For example my friend has an Excel/Office licence (which is intellectual property licenced by himself) which will almost certainly be used in connection with the work. Would he be then obligated to grant the company a licence of Excel/Office? And finally, if modifications to his software are made during this contract, would these changes constitute Project IP (i.e., is it intellectual property that is created or comes into existence in connection with the contract) and hence have to be assigned to the Company?