Contractors' Questions: Do I waive my rights if I accept this IPR clause?

Contractor’s Question: I’m being asked to sign an IPR clause as part of my role contracting as a web developer via an agency for a small client, a London-based company.

I fear that the clause is asking me to waive all rights to the work I produce, and prohibits me from being able to re-use pieces of code from this project for any other projects I work on in the future.

If that's the case, it's unacceptable, because I am using a lot of boilerplate code I've written myself over the years and I do not want to get rid of that, as I will be using it for other projects too. Am I right to be concerned by this clause, which I’ve reproduced below?

“Subject to clause 4.3 the Contractor as beneficial owner with full title guarantee and by way of assignment of present and future copyright hereby irrevocably and unconditionally assigns to the Company the entire worldwide copyright and all other rights title and interest of whatsoever nature whether vested or contingent (including without limitation the right to exploit the Deliverables and all allied and ancillary rights therein and the products of the Services by any means and in any and all media now known or hereafter invented) in and to the Deliverables and the products of the Services hereunder to hold the same unto the Company absolutely throughout the universe for the full period of the copyright and all renewals revivals and extensions thereof and (insofar as possible) thereafter in perpetuity. The Contractor acknowledges and agrees that the Contractor shall in no circumstances acquire any Intellectual Property Rights (“IPR”) in or to the Company’s Assets or the Deliverables or the Project.”

Expert’s Answer: You are correct to suspect that you are being asked to waive all intellectual property rights to the work you will produce.

Nevertheless, there may be room for negotiation. The company is clearly aware of the default position regarding the law, namely, that a contractor automatically owns all the intellectual property they create unless there is an agreement to the contrary. They are therefore using the copyright clause to protect their position, which is understandable. The main problem with template contracts, however, is that they seldom apply perfectly to all situations.

The first thing you should do is voice your concerns to the company. It would be in your best interest to explain the practical difficulties in assigning all of their copyright in the code that you have developed and refined over the course of many years. This would indubitably affect future projects. It is imperative that you explain this to the company without setting off any alarm bells. It would perhaps be best to emphasise that the boilerplate code is necessary yet unspectacular and the real value lies in the bespoke code that will accompany the boilerplate.

Having said that, you need to give some thought as to how you would like the boilerplate code treated. In the current situation, a contractor would prefer to grant a licence over an outright transfer. However, careful consideration must be afforded to the terms of any licence. For instance, you should make it clear that the licence is non-exclusive and that they are free to use the boilerplate code for other projects.

Furthermore, you should also clearly set out any restrictions relating to the code. Should the company wish to tweak the code at some point in the future, they may seek the services of another web developer and would want the right to modify the code without having to get your approval or pay an additional fee. Alternatively, the company may wish to set up another website in order to complement their online presence and want it to have the same ‘look and feel’ as the one you are currently working on. Would you be happy with the former using the same code, or will they need to obtain your permission before doing so?

Moreover, would you want the company to pay you a specified sum for the privilege of reusing the code for a separate project? The company will undoubtedly want there to be as few restrictions as possible. You must bear in mind that the company may simply look to engage another contractor if the terms are too demanding.

The expert was Mekael  Rahman, trainee solicitor at Lawdit Solicitors.

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Tuesday 28th July 2015