Before you sign an IP contract

Never sign an agreement that you don’t completely understand, or which you do not feel confident about. If you have questions, then seek help from a legal professional. Your institution may have a legal team or department who can help with your inquiries. The Arts Law Centre of Australia offers a telephone legal advice service for creators who need help managing their IP rights. If you need a referral to an affordable law firm, then you can contact your state’s Law Society for assistance. 

Here is a short list of things you should check and understand before signing an IP contract. This is not an exhaustive list.

• Who owns the rights to any new material that will be created?
  • Most contracts that deal with creative works or inventions will specify who owns the IP in any future creation. Check that you are happy with this arrangement.
  • Also check whether there is any transfer of rights for material that already exists (sometimes known as ‘pre-existing IP’).

• Is this a transfer of rights (an assignment) or merely a permission to use (a licence)?
  • If this is a licence, is it exclusive or non-exclusive?

• Do you understand the scope of the rights being granted? Is it all IP rights in the creation/invention, or only some?
  • If the agreement is for a licence, does the licensee have the right to sub-licence? (This is the right to grant permission to other people to use the rights granted to the licensee).
  • Have any conditions or restrictions been placed on the grant of rights?
  • Be careful not to sign over your rights in a way that will interfere with your future plans to commercialise your work.

• What is the term of the grant (how long is it for)?
  • If you are receiving the rights, is the grant long enough to allow you to do what you need to with the IP?
  • If you are granting the rights, beware of terms like ‘perpetual’ or ‘in perpetuity’, which means forever.

• What is the territory of the grant? Is it appropriate for what the parties need to achieve?
  • Many modern licences provide for worldwide rights. This may be necessary for online use.

• Are you being asked to make any warranties, and are you comfortable making them?
• What law applies to this agreement? Does that law make sense for you?
• What fee, royalty, or other thing of value is being provided for the grant of IP rights? Is that a fair exchange?
• What happens if something goes wrong?
  • Are the expectations on all parties clear?
  • Are there provisions for terminating the contract early?
  • Are there remedies if one of the parties does not fulfil their side of the agreement?
  • Is the licence revocable?

• Is anything missing from the agreement that you should speak about with the other party before signing?