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Intellectual property and contracts

It is essential to consider the question of intellectual property (IP) ownership whenever you enter into a contract with an external party. You need to make sure that the contract addresses IP issues sufficiently to meet the needs and expectations of your business.

Issues of pre-existing IP (sometimes called 'background IP') need special attention in certain situations; for example, if contractors will be incorporating their pre-existing IP in the material they develop with you.

You need to secure all rights necessary to enable your business to carry out its activities in a lawful manner (including rights to use any pre-existing IP owned by the external party).

If you enter into a contract to develop a new software program for a customer, ensure that the agreement specifies whether your company owns the program outright (including all associated IP rights), is entitled to use the program for a specified purpose only, and/or is entitled to share the program with external parties (and if so, on what - if any - conditions).

If specific terms about IP ownership and rights are not included in a contract, the general position is that the creator of the materials under the contract remains the owner of the IP.

Government contracts

In the absence of any contractual term providing otherwise, the creator of copyright protected material will own the copyright, except where copyright material is produced by a business/company for the Queensland or Australian Government. In that case, section 176 of the Copyright Act 1968 (Cth) displaces this general rule and copyright will be owned by the relevant government contracting party.

In any government contract you enter into, make sure that the contract contains a provision that accurately sets out your understanding of the IP ownership issues.