Doing business with big companies can be great – it’s good for publicity and is exposure to important work, but more importantly, a nice pay day! But could this work cost you more than you realised? Is your Intellectual propertyslipping through your fingers?

If your customer is a large company, chances are they will have a lawyer in tow. In our experience, many large companies use lawyers that are quite fond of their standard documents or “company policies”, most of which are likely to say something like “we, the big company, will own all IP relating to the Service provided by you, the small fry" The question is, does "all IP" mean all IP or just IP created specifically for this client?

A large amount of the materials used to provide most services will be the same for every customer. For example the backend of a website might be identical for several customers, but the frontend will be more bespoke. If you give ‘all of the IP’ in these materials away to one customer, you might not be able to use your backend again for your next customer.

What do I do to sort this out?

Make sure that you have an agreement in place that has a clear IP clause that covers:

  • The IP that you will continue to own (your ‘background IP’), and the terms on which you will licence such background IP to the client; and
  • The IP that the client will own as a result of the agreement, and whether you will retain a licence to any of this IP.

You need to carefully think through what makes up 1 and 2 above. Anything that makes up part of your standard service should be retained as background IP. And remember that if you ‘assign’ or ‘transfer’ ownership of IP to a client, it won’t be yours any more and you can’t use it unless the client specifically agrees to licence it back to you.

The next issue to cover will be the terms of any licences for IP retained and/or assigned by you.

What if I haven’t dealt with this properly in the past?

The Patents County Court recently decided that, generally speaking, in the absence of express wording, background IP will not be assigned to the customer of the services. However, the customer would gain an unrestricted licence to that background IP – which is not much different from owning the IP, save that the service provider can also continue to use the IP without restriction. This could mean that your customer could use your IP in any future project, without any further dealings with you or paying any additional licence fees (other than perhaps acknowledging you as an author of previous work – i.e. moral rights), which won’t be to everyone’s liking.   

If you’re worried about any of the issues mentioned above, or if you just want a chat, please get in touch.