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Intellectual property clauses are important to get right. Intellectual property can be bought and sold, licensed and used based on the wording of clauses relating to the intellectual property.

In this guide, we explain the different types of intellectual property clauses and provide examples. If you want to chat with an intellectual property and online lawyer, contact Prosper Law for a free consultation.

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Author: Farrah Motley, an Australian intellectual property and online lawyer.

An overview of topics covered in this article

In this article, we discuss the following topics relating to intellectual property clause examples.

  1. Define intellectual property
  2. Commonly Used Words in Intellectual Property Clauses
  3. Protecting your intellectual property
  4. Letting Others Use Your Intellectual Property
  5. Using Someone Else’s Intellectual Property
  6. How can Prosper Law Help with Intellectual Property Clauses?
Intellectual Property Clauses

Intellectual Property Clauses

Define ‘Intellectual Property’

If you want a really broad definition of ‘intellectual property’, because it’s favourable to you, below is an example of a broad definition that captures as many things as possible that might be considered intellectual property.

Definitions usually use ‘intellectual property rights’ as a means to define intellectual property, because it is the rights in that intangible property that have value.

Intellectual Property Rights include all past, present and future, ascertained or unascertained rights in any intangible property, rights in copyright and patents, trade marks, design rights, circuit layout rights, plant breeders rights, trade secrets, commercial know-how and inventions.

If you just want a short definition of intellectual property, below are some examples of short definitions of intellectual property:

Intellectual Property Right means rights in intellectual property including copyright, patents, trade marks, design rights, circuit layout rights and plant breeders rights.

Intellectual Property Right means any copyright, moral right, patent, registered and

unregistered design, circuit layout, trademark or name or other protected right, both

present and future, registered or unregistered.

And if you want an intermediate-length definition of intellectual property, try:

Intellectual Property Right means all past, present and future, ascertained or unascertained rights in intellectual property including copyright, patents, trade marks, design rights, circuit layout rights and plant breeders rights.

Commonly Used Words in Intellectual Property Clauses

Before we go too much further, it’s helpful to understand some of the common words used in intellectual property clauses.

  • Licence means the transfer of rights in intellectual property from one person to another
  • Worldwide means the right applies anywhere in the world
  • Exclusive means the right is only given to that other person, and no one else
  • Non-exclusive means the right is given to that other person, but it may also be given to other people
  • Perpetual means that the right granted will last forever
  • Revocable means that the right that is granted can be taken away or revoked
  • Irrevocable means that the right that is granted cannot be taken away or revoked
  • Sublicensable means that the right that is granted can be passed on or sub-licensed to other people
  • Royalty-free means that there is no fee payable for the right that is being granted

Protecting Your Intellectual Property

Keep your intellectual property confidential

If you want to keep your intellectual property confidential (as opposed to just preventing someone else from using it), below are some confidentiality clauses that apply to intellectual property:

Confidential Information means information disclosed by us to you and which we identify as being confidential or which a reasonable person would consider to be confidential, including any information relating to or disclosed in connection with our Intellectual Property Rights.

You must not disclose, use or otherwise exploit our Confidential Information for any purpose whatsoever, unless expressly authorised in writing by us. You agree to indemnify us for any loss or damage we suffer or incur and arising out of your breach of this clause.

Intellectual Property Clauses

Prohibit other people from using your intellectual property

No one can use your intellectual property or act in a way that is inconsistent with your rights in your intellectual property unless you authorise someone to do so.

You can authorise someone to use your intellectual property by:

  1. giving them express authorisation (for instance, in an email or an intellectual property agreement); or
  2. giving them implied authorisation (for instance, by providing a set of building plans for a fee, you may give your customer an implied right to use the intellectual property in the building plans).

To provide you with maximum control over your intellectual property, it can be helpful to clarify that no implied licence is granted and the only way someone can use your intellectual property rights is by you giving them express, written authorisation. To do that, you can try using a clause like this one:

To the extent that anything in this agreement, any written document or anything spoken by us prior to the date of this agreement could be taken to (impliedly or expressly) confer or grant any rights in relation to our Intellectual Property Rights, they are void and of no effect. You are not entitled to use any of our Intellectual Property Rights whatsoever.

You agree to indemnify us for any loss or damage we incur, or any commercial benefit you or any third party makes, from your breach of this clause.

Letting Others Use Your Intellectual Property

In some agreements, it makes business sense to allow the other person to use your intellectual property rights, especially if that’s what they are paying for.

If you want to make sure the other person has a very limited right to use your intellectual property, below is a restrictive clause you could use:

To the extent that anything in this agreement, any written document or anything spoken by us prior to the date of this agreement could be taken to (impliedly or expressly) confer or grant any rights in relation to our Intellectual Property Rights, they are void and of no effect. You are not entitled to use any of our Intellectual Property Rights whatsoever unless we expressly authorise you in a document titled ‘Grant of Licence to Use Intellectual Property Rights’. You may only use our Intellectual Property Rights to the extent set out in that document, and for no other purpose.

You agree to indemnify us for any loss or damage we incur, or any commercial benefit you or any third party makes, from your breach of this clause.

If you want to give the other person a little more flexibility to use your intellectual property rights and you don’t want to have so much involvement in managing when and how they can use your intellectual property, below is a less restrictive clause that allows someone else to use your intellectual property:

We grant you a limited, revocable, non-exclusive, worldwide, royalty-free licence to use our Intellectual Property Rights that we disclose to you for the purpose of performing your obligations under this Agreement. You are not entitled to sub-licence without our express written permission. We may revoke this licence at any time, for any reason.

You agree to indemnify us for any loss or damage we incur, or any commercial benefit you or any third party makes, from your breach of this clause.

Intellectual Property Clauses

Using Someone Else’s Intellectual Property

If you want to use someone else’s intellectual property then you want to make sure you have the broadest rights possible. The best right to use intellectual property owned by someone else is to get them to agree in writing to transfer ownership to you.

Here is an intellectual property clause that transfers ownership from one person to another person:

You agree that upon creation of any documents or information which contain Intellectual Property Rights under this agreement, ownership is transferred to and vests absolutely in us.

You agree to take any steps necessary to the extent that any act or thing is required to be done to perfect such vesting. You warrant that you will not, and you are barred absolutely, from claiming or alleging that we do not own such Intellectual Property Rights and agree to indemnify us for any loss or damage (including legal costs on an indemnity basis) for any breach of this clause by you.

Here is an example of an intellectual property licence that allows you to use intellectual property that belongs to another person. While it does not transfer ownership to you, no one else, including the owner, is allowed to use that intellectual property. That’s because of the use of the word ‘exclusive’:

You grant to us an exclusive, unlimited, worldwide, royalty-free licence (including the right to sub-licence) to use any documents or information which contain Intellectual Property Rights under this agreement. You will not, and will ensure any third party does not, use those Intellectual Property Rights without our express written consent.

You also need to be careful about the use of the word ‘revocable’ in any licence that may be granted to you because this may mean that the owner of the intellectual property can require you to stop using the intellectual property.

Intellectual Property Clauses

How can Prosper Law Help with Intellectual Property Clauses?

If you need a lawyer to help your business with an intellectual property agreement or clause, contact us today and speak with an online lawyer.

We can draft the following types of intellectual property agreements:

  • intellectual property licence agreement
  • agreement to pay royalties for intellectual property
  • intellectual property sale agreement
  • intellectual property deed
  • software licence agreement
  • intellectual property assignment
  • technology consulting agreement
  • software maintenance agreement

Farrah Motley | Legal Principal

PROSPER LAW – Australia’s Online Law Firm

M: 0422 721 121

E: farrah@prosperlaw.com.au

W: www.prosperlaw.com.au

A: Suite No. 99, Level 54, 111 Eagle Street, Brisbane, Queensland Australia 4000

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