Spross & Associates, PLLC

Ownership Assignment in NDAs

Here is another reason to have your attorney read your NDAs.  I have seen companies try to throw ownership assignment provisions in their NDA.  This is not the standard provision that says the disclosing party owns what they disclose, but a full blown assignment of new materials created.  This is a problem if you are a consulting organization and are in the sales dance with a potential customer.  These NDAs provide assignment of those initial items you create without a written contractual obligation for you to get paid.  That does not put the consulting organization in a very good negotiating position down the road.

 

So make sure you read these NDAs, even if the other party tells you, “It is standard, everyone signs it,” especially if that is their response.

 

Open Source in Consulting Deliverables

If you are a buyer of coding services, why should open source in the Deliverables concern you and what can you do to protect yourself?

Open source code in your deliverables can be a major problem.  It may open you up to potential intellectual property infringement actions or, during due diligence, it may torpedo an acquisition.

So, what do you do in your consulting agreements?

First, request a warranty stating that there is no open source in the Deliverables.  More specifically, I like to say that there is no code that is governed by viral license agreements.

Second, I do not distinguish open source contained in the Deliverables from the Deliverables themselves.  When I ask for warranties and indemnification, they apply to “Deliverables” and everything included in those Deliverables.  That way, the consultant is on the hook for the entire Deliverable.

If the consultant is unwilling to provide the warranty and/or the indemnification, then I require that any open source must be preapproved in writing before being included in a Deliverable.  Absent your written approval, the source code is treated as part of the Deliverable and, therefore, not excluded from the warranty or indemnity under any circumstances.  If open source is included in the Deliverables, make sure that you also get a copy of the applicable open source license.

General Overview

If there is anything you would like to see discussed in this category, make a suggestion and we will see what we can do.