Deliverables: Rights to Own and Use

Table of Contents:

• Rights in Deliverables

• Reservation of Rights

• Tax Deliverables

Deliverables: Rights to Own and Use

Rights in Deliverables

In a service contract, a contractor may be tasked with creating products, designs, software or other “work product” for the customer as part of the contracted services agreed to by the parties, the details of which are often prescribed in an accompanying statement of work (SOW). Such work product or service “deliverables” may include or incorporate (i) intellectual property of the contractor (often referred to as “background materials” or “background IP”), which may be licensed on a non-exclusive basis by the contractor to the customer in connection with the use of the deliverables, as well as (ii) new intellectual property created by the contractor in the course of performing the services, which may be assigned to the customer as the exclusive property of the customer upon full payment of the services. These concepts are also discussed in a broader and more general context in the section dealing with “Intellectual Property Ownership”.

In the following exemplars, the parties agree to assign rights to deliverables as between the maker and user. In particular, the parties rely on common law and statutory rights regarding “works made for hire” and/or contractual assignment of rights to transfer rights from the maker to the user regarding such deliverables:

Exemplar C24A-1

To the extent that a Deliverable (or portion thereof) contains Work Product (including, without limitation, all draft and interim forms thereof), such portion of the Deliverable shall be deemed a work-made-for-hire within the meaning of the United States copyright laws to the fullest extent possible. As between the Parties, all such Work Product, including any and all Intellectual Property Rights therein and related thereto, are the sole and exclusive property of Client. To the extent that any such Work Product is not capable of being a work-made-for-hire, Supplier hereby assigns to Client all Intellectual Property Rights in or relating to such Work Product. Supplier shall not apply for a patent, copyright, or other right or protection on any portion of a Deliverable that contains such Work Product without the prior written consent of Client.

Exemplar C24A-2

All work product produced by Consultant in the course of a Project shall be owned solely and exclusively by Client and shall be considered work-for-hire under all applicable laws, including without limitation the Copyright Act. This Agreement obligates Consultant to assist Client in protecting its proprietary information including, but not limited to, executing all reasonably necessary Client documents regarding work product, ownership of intellectual property, and the like, at Client’s request. Consultant is also required to disclose in writing any intellectual property interest(s) Consultant has that might reasonably be expected to relate to the Project. Consultant is obliged to make such disclosure prior to commencement of a Project or immediately upon Consultant recognizing such relevancy.

Exemplar C24A-3

Any and all Deliverables created, developed, or prepared by Contractor, its employees or Subcontractors shall be deemed a "work for hire" for the sole benefit of and belonging exclusively to Customer. To the extent any Deliverable is not deemed a "work for hire" by operation of law, Contractor hereby irrevocably assigns, transfers and conveys, and shall cause its Subcontractors irrevocably assign, transfer and convey to Customer all of its and their right, title and interest in all Deliverables under the SOW, including, but not limited to, all rights of patent, copyright, trade secret and other proprietary rights in such Deliverable. All other intellectual property rights and other proprietary rights in and to the Services, and information, know-how and processes developed by Contractor, or anyone acting on Contractor's behalf arising from the Services performed hereunder shall be the sole and exclusive property of Contractor and shall not be claimed to be owned by Customer or their employees. Contractor shall provide to Customer all Commercially Reasonable assistance, execute such documents, and take all such other actions, which may be reasonably required to perfect the foregoing rights to the Deliverable including, but not limited to, directing its employees to execute all applications for patents and/or copyrights, assignments, and other papers necessary to secure and enforce Customer's rights to such Deliverable.

Exemplar C24A-4

Contractor agrees that to the extent that any Deliverable is subject to copyright: (a) every aspect thereof, other than User Property that may be incorporated into the Deliverable, is a “work made for hire” (as defined in the U.S. Copyright Act) for Customer; (b) Customer shall be considered the author of the Deliverable for all purposes; and (c) Customer shall be the owner of all of the rights comprised in the undivided copyright (and all renewals, extensions, and reversions thereof, and all rental rights) in and to the Deliverable in perpetuity and throughout the universe. To the extent that any interest in any Deliverable may not be deemed a “work made for hire” under copyright law, Contractor hereby irrevocably assigns to Customer all right, title and interest in any and all rights of copyright (and all renewals, extensions, and reversions thereof) of the Deliverable other than Contractor Property. Contractor agrees that it will reasonably assist Customer in every appropriate way and at Customer’s cost with respect to Customer’s proprietary rights in the Deliverables. In addition, Contractor acknowledges and agrees that the Deliverables are Customer Confidential Information and the exclusive property of Customer (excluding any incorporated Contractor Property).

Exemplar C24A-5

Any and all Deliverables created, developed, or prepared by Contractor, its employees or Subcontractors shall be deemed a "work for hire" for the sole benefit of and belonging exclusively to Customer. To the extent any Deliverable is not deemed a "work for hire" by operation of law, Contractor hereby irrevocably assigns, transfers and conveys, and shall cause its Subcontractors irrevocably assign, transfer and convey to Customer all of its and their right, title and interest in all Deliverables under the SOW, including, but not limited to, all rights of patent, copyright, trade secret and other proprietary rights in such Deliverable. All other intellectual property rights and other proprietary rights in and to the Services, and information, know-how and processes developed by Contractor, or anyone acting on Contractor's behalf arising from the Services performed hereunder shall be the sole and exclusive property of Contractor and shall not be claimed to be owned by Customer or their employees. Contractor shall provide to Customer all Commercially Reasonable assistance, execute such documents, and take all such other actions, which may be reasonably required to perfect the foregoing rights to the Deliverable including, but not limited to, directing its employees to execute all applications for patents and/or copyrights, assignments, and other papers necessary to secure and enforce Customer's rights to such Deliverable.

Exemplar C24A-6

Unless otherwise provided in an SOW, any discoveries, inventions, concepts or ideas, and modifications thereof, made or conceived pursuant to this Agreement is a “work made for hire” and Client exclusively retains all right, title and interest in and to any and all such “work made for hire.”

Exemplar C24A-7

Contractor hereby waives all rights it may have in the Works, and hereby assigns all such Intellectual Property to Client. Contractor will execute all documents necessary to assign such Intellectual Property rights that are subject of Intellectual Property right applications Client claiming the Works, within thirty (30) days after written notice by Client. Contractor will require all of its personnel and affiliates to assign to Client all their Intellectual Property rights associated with the Works.

Exemplar C24A-8

If, in the course of performing the Services, Supplier incorporates into any Deliverable (or portion thereof) any Supplier Property, Supplier will grant and does now grant to User a non-exclusive, sublicenseable, transferable, royalty-free, perpetual, irrevocable, worldwide license to reproduce, manufacture, modify, distribute, use, import, and otherwise exploit such Supplier Property as part of or in connection with the Deliverable. Further, during the Term of an applicable SOW, Supplier hereby grants to User a limited, non-exclusive, royalty-free license to use such Supplier Property to the extent that User reasonably needs to use such Supplier Property to obtain the benefit of the Services.

Reservation of Rights

Notwithstanding the transfer of intellectual property (IP) rights by application of common law, statute, or contractual assignment, the maker of the deliverables may desire to reserve its rights to any pre-existing proprietary technology or IP that is used to make the deliverables or is incorporated into the deliverables. In such a case, the maker may be required to grant the user non-exclusive rights to such pre-existing IP to the extent necessary for the user to obtain the benefits of the deliverables, including use thereof:

Exemplar C24A-9

Contractor retains all right, title and interest in and to any and all business processes, methodologies, analysis frameworks, systems, patents, trademarks, service marks, business names, copyright, trade secrets, inventions, discoveries, concepts, ideas, works of authorship, software, computer programs, modules, data, documentation, manuals, guidelines, database rights, designs, drawings, test results, tools, confidential information and skills, and all modifications thereof, owned, developed by or licensed to Contractor prior to or independent of this Agreement (the “Background Materials”). Client retains all right, title and interest in and to any and all business processes, methodologies, analysis frameworks, systems, patents, trademarks, service marks, business names, copyright, trade secrets, inventions, discoveries, concepts, ideas, works of authorship, software, computer programs, modules, data, documentation, manuals, guidelines, database rights, designs, drawings, test results, tools and confidential information, and all modifications thereof, owned, developed by or licensed to Client (the “Client Materials”). Except for the Background Materials, Contractor hereby assigns all of its rights, title, and interest in and to any “Deliverables” (as such term may be defined in an SOW) to Client, and Client retains all right, title and interest in such Deliverables.

Exemplar C24A-10

Unless otherwise provided in an SOW, any discoveries, inventions, concepts or ideas, and modifications thereof, made or conceived pursuant to this Agreement is a “work made for hire” and Client exclusively retains all right, title and interest in and to any and all such “work made for hire.” Contractor retains all right, title and interest in and to any and all business processes, methodologies, analysis frameworks, systems, patents, trademarks, service marks, business names, copyright, trade secrets, inventions, discoveries, concepts, ideas, works of authorship, software, computer programs, modules, data, documentation, manuals, guidelines, database rights, designs, drawings, test results, tools, confidential information and skills, and all modifications thereof, owned, developed by or licensed to Contractor prior to or independent of this Agreement (the “Background Materials”). Client retains all right, title and interest in and to any and all business processes, methodologies, analysis frameworks, systems, patents, trademarks, service marks, business names, copyright, trade secrets, inventions, discoveries, concepts, ideas, works of authorship, software, computer programs, modules, data, documentation, manuals, guidelines, database rights, designs, drawings, test results, tools and confidential information, and all modifications thereof, owned, developed by or licensed to Client (the “Client Materials”). Except for the Background Materials, Contractor hereby assigns all of its rights, title, and interest in and to any “Deliverables” (as such term may be defined in an SOW) to Client, and Client retains all right, title and interest in such Deliverables.

Exemplar C24A-11

Notwithstanding the foregoing, Contractor shall retain ownership rights to (1) all of its previously existing intellectual property, including any derivatives, modifications and enhancements thereto, (2) Confidential Information of Contractor, and (3) any tools or scripting applications used, developed or created by Contractor or its third-party licensors during the performance of this Agreement. In the event and to the extent that the Deliverable contains any Confidential Information of Contractor and/or pre-existing proprietary software, items, elements, tools, and/or scripting of Contractor, Contractor shall specifically identify such information, software, items, elements, tools, and/or scripting in the applicable SOW (including whether Contractor or a third party is the owner, and if a third party is the owner, a copy of the license terms, if different from the following, shall be provided in writing to Customer for approval prior to Customer signing the SOW) and Contractor shall be deemed to have granted and hereby grants to Customer a nonexclusive, perpetual, royalty-free, irrevocable, transferable, worldwide, and enterprise-wide license to use, reproduce, alter, adapt, modify, display and perform (publicly or otherwise), distribute, and make derivative works of such information, software, items, elements, tools, and/or scripting. Third-party owned software, items, elements, tools, and/or scripting will be subject to the license terms of the third party owner, provided such terms are disclosed to and approved by Customer prior to execution of the applicable SOW. Contractor shall not incorporate any third party intellectual property in any Deliverable except as expressly permitted in the SOW.

Exemplar C24A-12

Nothing in this Agreement shall prohibit Supplier from reproducing, disclosing, selling, distributing, obtaining copyright registration for, or otherwise using Supplier Property, or any modifications, enhancements, derivatives, or portions thereof or thereto. Supplier owns and shall retain ownership of all Supplier Property, including any and all Intellectual Property Rights therein and related thereto. For any Supplier Property not identified in an SOW or other agreement or documentation between the Parties, in the event of a dispute whether certain materials, products or concepts were Work Product to be owned by Client as provided in this Agreement or the applicable SOW, Supplier shall bear the burden of proving that any materials, products, or concepts were not Work Product.

Exemplar C24A-13

Consultant retains full rights of ownership and use in any programs, products, inventions, methodologies, reports, studies, data, diagrams, charts, specifications, works or materials which have been independently created and/or developed by Consultant prior to or independent of the services provided under this Agreement, as evidenced by competent written documentation of Consultant, and such materials shall not be considered work product for the purposes of this Agreement, but shall be considered “Independent Materials.” Consultant hereby grants to Client a non-exclusive, irrevocable, royalty-free, worldwide license, with right to sublicense, to use, make, and sell such Independent Materials to the extent that such license is required to enable Client to make use of the services hereunder without encumbrance, including without limitation any deliverables and work product.