4.Contract Drafting, Review and Negotiation

Q1 (IP Rights in Outsource System Development)

What points should we keep in mind in negotiating intellectual property rights when we outsource system development?

Obtaining the intellectual property rights necessary for you to use the anticipated deliverable is important. In principle, the copyright and other intellectual property rights of a work rest with the author, so you need to clearly state in the contract that the intellectual property rights will be assigned to your company. Also in this case, the assignment of rights under the Copyright Act Articles 27 and 28 (adaptation rights and rights of the original author related to use of derivative works) needs to be clearly stated in the contract. Otherwise, the assignee will have the burden to prove that such rights were to be included in the assignment under the Copyright Act. Also, in addition to the copyright in the work itself, there are moral rights (publicity rights, attribution rights and integrity rights), which cannot be transferred under the law. For these rights, it is necessary for the author to contractually agree not to exercise them.

(Posted: January 27, 2012)