IP management scenarios - Scenario seven
The parties need to consider whether the research partner will be given access to, or rights in, the business partner’s background IP.
There are a number of ways this can be arranged, with varying degrees of complexity. The IP Toolkit Model Contract allows background IP to be used on agreed terms without affecting the ownership of the IP (clause 13, part 1).
In the above scenario, the business partner retains ownership of the background IP and the research partner would be given a non-exclusive licence to use that IP for collaboration on the project and any other purposes the parties agree to (clause 13, part 3). The Mini IP Toolkit Model Contract takes a similar approach (see clause 14, part 2).
While it may not be expected that the project will generate any new IP, it is difficult to be certain about this at the beginning of a project.
In order to reduce the risk of disputes or wasting time later, it can be helpful to agree on how any Project IP would be handled if it does arise.
Project IP is not always a registrable right, such as a design or patent – there may be additional IP generated such as plans, reports, photos, software, test results, websites and databases. The IP Toolkit Model Term Sheet encourages parties to identify these and specify who will own them and how each party may need to use them (pages 6 to 7).
Third party IP
The IP Toolkit Model Term Sheet encourages parties to identify any relevant third party IP and consider matters that affect how the IP can be used (pages 6 to 7).
Both IP Toolkit Model Contracts highlight a number of issues to be considered if third party IP will be used, including the potential risks, costs and licensing requirements. See clause 13 of part 1 of the IP Toolkit Model Contract or clause 12 of part 1 of the Mini IP Toolkit Model Contract for details.
If third party IP is needed for the project, the owner of that IP will need to agree to its use. Any licensing agreement to use third party IP should clearly outline the circumstances and timeframes for use, including any proposed sublicensing amongst the project partners.