In the race to the money clauses parties and contract drafters should not overlook the subject matter from which money is to be made. Technology or IP needs definition. By itself the terms “intellectual property” or “technology” can mean lots of things. Yet many contract drafters overlook that ambiguity in the race to more exciting ownership, exclusivity, non-competition and royalty clauses.
The result is poor or no definitions, leading to poorly drafted contracts, misunderstandings, contract failure and litigation.
There is indisputable evidence for this in IT contracts. Experienced IT contract drafters report that an extraordinarily high percentage of IT contract disputes arise from bad or no functional or technical specifications. Specifications help define the subject matter, the technology.
Terminology issues are major risks. They can be avoided with preliminary work.
As discussed in the linked YouTube video, there are three prerequisites for drafting and advising on technology and intellectual property contracts: Intellectual Property Register, Documents Register, and Documents Repository.
Once created, these items can be used to settle or define terminology used in a contract-based transaction involving technology or IP. For example, transaction-specific or contract-specific meanings can then be given to such generic terms as “Intellectual Property”, “Technology” and “Intellectual Property Rights”.
Attending to the three prerequisites builds understanding of the subject matter and leads to easy to understand and apply technology and IP contract.
Video credit: shot and edited by Michael Ney of Eagle Spirit Media.
The linked YouTube video is an extract from a lecture to lawyers in Sydney in August 2011 titled “Legal Methodology for IP Licensing & Commercialisation“