IP management scenarios - Scenario eleven
The parties need to decide how their respective background IP will be shared with each other and used in the project. This is a potentially complex situation in which legal advice should be considered.
The IP Toolkit Model Term Sheet provides an opportunity to identify and list all relevant background IP that each party is contributing (pages 4 to 5). This also provides an opportunity to consider how the background IP is to be protected and any conditions around its use.
Neither contract specifically covers the situation where both parties bring background IP, but an appropriate amendment to the contract could be made to accommodate this, for example by providing for the mutual exchange of licences regarding the background IP.
The contracts also require the use of an IP Register and a template is provided at Attachment A to each contract. The default position in each contract is that the responsibility to maintain the IP Register sits with the research partner, but a different arrangement can be agreed and specified in the contract.
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.