As 2018 comes to a close, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips. If you don’t see a topic you are interested in below, please let us know, and we may feature it in a future Contract Corner.

In Part 1 of this three-part series, we discussed how intellectual property ownership is determined in the U.S. if no agreement is in place. In this second part, we discuss the typical ways that parties can use contracts to determine intellectual property ownership.

In the context of negotiating an agreement where intellectual property rights are addressed, most parties will readily agree that those intellectual property rights owned by a party before the effective date of the agreement or developed outside of the agreement (commonly referred to as background rights) should be owned by that party.

Foreground Intellectual Property Rights

Unlike background rights, ownership of intellectual property developed under the agreement (commonly referred to as foreground rights) are often highly negotiated. When negotiating the ownership of foreground intellectual property rights, some questions the parties should consider are as follows:

  • Does the party that developed the intellectual property own it?
  • What happens if the other party is paying?
  • What if the intellectual property developed by one party is an improvement to the intellectual property owned by the other party?
  • What if both parties develop the intellectual property jointly?