Olivia Herbert is a paralegal at Drukker Solicitors and helps lawyer Leigh Ellis prepare software licenses, confidentiality agreements and manage the contractual rights of digital media agencies and software developers. Software developers can agree to terms regarding the specific type of software developed for their client. You may also want different payment terms, such as a time and equipment contract or a fixed-price agreement. Such conditions may prevent non-recourse after the developer has completed work on the software. On the other hand, customers may want a guarantee of certain performance in terms of the capabilities of the software. We help our clients negotiate software development contracts. As has already been said, there are generally two ways of dealing with intellectual property rights: licensing and attribution. When licensing, the developer retains ownership of the software`s underlying intellectual property rights, but authorizes the client to exercise some or all of those rights. For example, almost all licenses allow the licensee (i.e.dem customer) to create copies of the software for internal business purposes (otherwise, how would the customer legally install the software on his computers?). In this example, as the developer retains ownership of the software`s intellectual property rights, the developer is free to license the software to other potential customers as long as none of the licenses are exclusively possible or valid (attention). Therefore, the licensing approach is often preferable for developers because they can continue to market and improve their software product. However, the downside is that the software`s development and licensing costs may be lower than if the developer had transferred the intellectual property rights to the software directly to the customer.
I also recommend that the terms and conditions of the licence be as generous as possible. You should expect a non-exclusive license, as your partner is likely to use his existing work in other client projects. However, you should be able to use what is already done in every way possible to achieve your business goals. For example, you should be able to use, reproduce, sublicensing and create works derived from your partner`s existing work, if necessary to achieve commercial success with your wider software product. Many custom software providers calculate an invoice based on the time spent creating delivery items. You will receive invoices for a specified period of time (for example. B hours, team weeks, etc.) and you have the means of delivery received during the duration of the invoice at the time of payment of the invoice. Software is often protected by patent rights, but even with the frequency of patented software these days, it is more the exception than the rule, as is the case in other sectors. In other words, the client has the right to use the software for purposes that were contemplated between the parties at the time of the engagement – and not at a time after the engagement began. In this case, the employer is the first owner, subject to a contrary agreement between the employer and the employee.
Whether the software is assigned to the client or only authorized may also depend on the client`s budget. As you might expect, it is almost always cheaper to pay for a license than for owning the software. Therefore, economic realities can and can determine how IP rights are allocated in software development agreements.