Different Ways to Handle Intellectual Property Rights in Your Contracts:
If you forget your intellectual property terms, or worse, don’t understand your IP terms in your online business contracts, you’re most likely not protecting your rights over your creations and creative assets.
Here are 7 important things to think about when dealing with IP terms in your contracts:
1. IP Ownership Clause:
Clearly state who owns what intellectual property created under the contract. Specify whether the intellectual property rights belong to you, the client, the vendor, or if they are shared jointly. This needs to be clear, specific, and easy to understand.
For example, if you’re a photographer, you would want to specify who owns the rights to what photos. Often, photographers retain ownership of all the photos and license the right to use the final, edited versions of the photos to their clients.
2. License Agreement and Usage Rights:
If you're granting someone else permission to use your intellectual property, i.e. giving them a “license” to use it, you need to define the scope of the license clearly and specifically.
Make sure you clearly explain how, when, and where they can use the work, and don’t forget to specifically state any restrictions on their use, like whether they can edit or manipulate the work. This can help prevent misunderstandings and disputes over the IP’s permitted uses.
Don’t forget to explain when the license will be transferred as well. One strategy is to not allow transfer of the license (or permission to use your IP) until full payment is received.
3. Confidentiality:
Make sure you have confidentiality clauses in your contract that protect your sensitive intellectual property. For example, if you’re sharing your proprietary processes or materials with your client during the project, you need to have a clause that informs them they can’t share those processes or materials outside the scope of services you’re providing.
4. Indemnification:
You also need to include properly written provisions that hold the other party responsible for any claims of infringement of IP rights. If written correctly, these clauses will require your client to defend you and pay any of your costs if you’re sued for misuse or unauthorized use of someone else’s intellectual property.
5. Assignment Clause:
Don’t forget to explain whether the intellectual property rights under the contract can be transferred to another party. This prevents unexpected changes in ownership and ensures clarity regarding rights.
6. Dispute Resolution:
Make sure you include provisions that allow the parties to have a little more control in the event of a legal dispute. Generally, in your contracts, you can require the parties to go to mediation before filing a lawsuit and pick where disputes need to be brought. There are also other dispute resolution strategies that can help expedite resolution and minimize legal costs of both parties.
7. Termination Clause:
Determine whether any licenses granted will continue after termination and under what conditions. Also make sure you specify whether any IP needs to be returned to you after termination.
These are just some of the strategies to protect your company’s intellectual property, and the strategy for your business will depend on a variety of factors.
Because of this, there’s no one-size-fits-all approach to legal strategy for your business. That’s why it’s so important to get legal advice from an experienced attorney to help make sure you’re properly protecting your business’ IP rights.
Want to make sure your IP is protected? Let’s chat!
