NSW Licensing of Pre Existing IP in a Professional Services contract

Discussion in 'Commercial Law Forum' started by EmmaG, 13 June 2018.

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  1. EmmaG

    EmmaG Active Member

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    Hi there

    I have just received a Master Services Agreement from a new client to review which includes a clause relating to leveraging my Pre Existing IP.

    I consider this engagement to be of a specialty consulting nature. I am of course leveraging much of my own pre-existing IP in performing the services to the client and then in creating deliverables for the project.

    The company is a large corporate with four subsidiaries, al of whom i know wish to undertake similar projects in the future. I need to protect my IP in the event I wish to commercialise it in the future and that the pre-existing IP is part of my competitive advantage.

    I am not comfortable with this clause

    Licence to use Pre-existing IP
    Each party grants to the other party an irrevocable, non-exclusive, world-wide, royalty free licence to use, reproduce, modify and adapt its Pre-existing IP (and to sub-licence these rights) for the purposes of:

    1. performing its obligations, or exercising its rights, under this Agreement or providing or using the Services; and
    2. in the case of xxxx, exercising its rights in the Developed IP.

    As I understand it, this clause as it stands means that they could in effect use my methodology, tools and techniques I created long before I began working for them and that they could be adapted, modified or embodied into other works or projects for other related entities. Given the contract value being far lower than the value of my IP developed over 20 years, I want to find a better clause that protects my IP for just this project perhaps.

    I have already asked them to describe the different purposes for which my pre existing IP might be used and in what contexts but they have just instructed me to write my own clauses on pre existing iP for them to review.

    Are there any better ways to frame licensing pre existing IP so that the client cannot go off and give them to other parties?
     
  2. DMLegal

    DMLegal Well-Known Member

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    Its hard to tell without more context and information, particular given I assume Pre-existing IP and Developed IP is defined in the agreement however using what you have provided above:


    Licence to use Pre-existing IP
    Each party grants to the other party an irrevocable, non-exclusive, world-wide, royalty free licence to use, reproduce, modify and adapt its Pre-existing IP (and to sub-licence these rights) for the purposes of:

    1. performing its obligations, or exercising its rights, under this Agreement
    2. in the case of xxxx, exercising its rights in the Developed IP.
    Just remove anything after 'under this agreement...', that way upon termination of the agreement, the licence to use the pre-existing IP is terminated. Or add a clause to the effect of the following:

    In the event of termination each Party must:
    • deliver up all Pre-Existing IP of the other Party and all copies of in the possession, custody or control of the Party;
    • deliver up all Confidential Information of the other Party and copies within the possession, custody or control of the Party;
    • cease to use all information provided by the other Party during the Term of this Agreement or at any time whether Confidential Information or otherwise, it being acknowledged by the Party that such information is part of the goodwill and reputation of the other Party. Neither Party, nor any Guarantor, nor any Company associated with or controlled by a Party can thereafter use the Pre-Existing Intellectual Property or Confidential Information.
    I wrote that quickly, so it is probably wrong, but something to that effect should do it.
     
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