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Whose Intellectual Property is it Anyway?

Updated: Jun 15, 2022

Managing intellectual property rights is critical to the protection of an organization’s assets and assists in facilitating organizational growth. It is imperative that an organization’s MSA clearly sets out the intellectual property that each party brings to the table and each party’s ownership rights in that intellectual property. Regardless of the agreement, the rights in the intellectual property should reflect the organization's intellectual property framework and strategy.

Have you considered the following Intellectual Property?

It is necessary to consider Background IP as it comprises the foundational organizational intellectual property assets of an organization and includes the intellectual property fundamental to the services that a party provides to its customers. It is important to ensure that you control and keep the rights in any Background IP that you bring into a relationship.

You should also consider Developed IP as it comprises any intellectual property developed throughout the term of the agreement and can be broken down into IP independently developed by the service provider or jointly with the service provider and the customer. Although this IP may not be as critical to your organization as Background IP, it is important to ensure that you are retaining the rights in the Developed IP as this can become another IP asset to your organization.

Consider where and how Third Party IP will be included in the deliverables and what entity holds responsibility and liability arising from third party IP issues.

The Deliverable(s) should be further scoped and detailed in the applicable Statement of Work.

Does your organization incorporate Open Source Technology?

Consider tailoring your MSA to set out whether your organization incorporates Open Source into the deliverables. Frequently, in customer facing MSAs there will be a requirement of customer acceptance and prior written approval before any Open Source can be incorporated into deliverables; certain customers require disclosure in every instance of Open Source inclusion!

Once intellectual property ownership is established, the ability for the other party, usually the customer, to use the different types of IP incorporated into the deliverables needs to be established and this is done through licensing.

Why license?

Licensing provides a party with the ability to keep its rights in an intellectual property while providing the other party with tailored access to the intellectual property; licenses are usually used in situations where a party requires the Background IP and/or Developed IP for use of the deliverable(s). When licensing, it is important to consider the types of rights you are comfortable providing to a party and the type of license that will be provided. Consider whether the license is bound by time, the jurisdiction(s) the license will be provided in, and to what extent an intellectual property can be used and/or manipulated.

If you have any questions about MSAs, or would like assistance incorporating this guidance into your organization’s MSA, please contact Erika Misasi at Misasi Legal by email, or by phone at 647-297-5007.

For more information on Misasi Legal check out and follow us on all social media platforms @MisasiLegal.


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