What To Include In Your Intellectual Property Software Agreement

There are various things to include in your intellectual property (IP) software agreement. IP software agreements integrate several terms to solidify the development process. Many developers incorporate payment terms, risk allocation functions, testing solutions and project ownership rights in their agreements. As a software developer, enforce an agreement confirming overall ownership on the created application while protecting your intellectual property. Here is what you should include in your intellectual property software agreement.

Payment Arrangements

First, include payment arrangements in your intellectual property software agreement. Ensure you are being paid correctly by adding a time/materials section and a fixed-price section. Under the time and materials section, note the terms for client payment, including the development period and costs. As a result, payment is assured if the project takes longer to complete than expected. Meanwhile, under the fixed-rate section, you set a price for your overall dedication during the project. For example, instead of paying them an hourly rate, clients and developers may agree to a lump sum such as $25,000. Certainly, include payment arrangements in your IP software agreement.

Ownership Rights

Secondly, include an ownership rights section within your IP software agreement. Work with your client and decide who owns the IP rights integrated with the software. Typically, you, the developer, are assigned ownership by default. However, if your client classifies the software as a work made for hire, they gain ownership. For example, if a company in China created a plastic prototype with a US developer, they would need to collaborate to secure intellectual property. Of course, your client can obtain a copyright by creating an agreement that transfers ownership. Or, they can allow you to retain ownership as long as they hold a license to use the software as needed. Additionally, many software types require other programs, materials and tools to be developed. As a result, ensure you do not transfer any IP rights of the foundational technology. Definitely, when creating an IP software agreement include an ownership rights section.

Breaches And Terminations

Next, your IP software agreement contract should include a breaches and termination section. This section provides an understanding if any promise within the contract is broken. Define specific actions and periods that could constitute a breach in the agreement. More so, integrate cures or different ways to fix the issue. Of course, set predetermined factors if the partnership needs to be terminated. If there is a termination, ensure that all materials are returned accordingly, all services are paid for and that all deliverables are finalized. Additionally, integrate surviving terms for when the active relationships is terminated. These terms should include not hiring each other’s employees and the losses you agree to protect each other from. Definitely include a breaches and termination clause in your IP software agreement.

Trade Secrets

Additionally, implement a trade secrets section within your IP software agreement. This states that all trade secrets during the development process including codes, ideas and concepts are protected. So, if you utilize code that is considered a trade secret, confirm that you are entitled to keep it private. Of course, this protection lasts as long as the trade remains a secret. Additionally, trade secrets cannot be infringed but are subjected to theft. It can uphold its legal status as long as the secret owner can prove the secret was not generally known and the steps taken to keep it a secret. Certainly add a trade secrets section in your IP software agreement for protection.


Finally, include a warranty clause in your IP software agreement. A warranty provision promises that the developed software will work as intended for a certain period. For example, there are software performance warranties, title warranties and non infringement warranties. The software performance warranty promises that the software will work as advertised and that you will fix it for free if it doesn’t. Typically, this warranty lasts between 90 days to year after the software is delivered. The title warranty promises that clients will obtain good title to the software. Meanwhile, the non infringement warranty confirms that the software will not infringe on anyone’s trade secrets, patents, copyright or other IP rights. Certainly implement a warranty provision within your IP software agreement.

There are several aspects to include in your intellectual property (IP) software agreement. First, include payment arrangements to ensure you are being compensated for your time and energy. Secondly, integrate ownership rights to determine who owns the software, licenses and fundamental technology. Next, implement a breach and employee termination clause to protect yourself against any issues, disagreements or falling outs. Additionally, add a trade secrets section to secure your secrets such as codes, ideas and concepts, from theft. Finally, include a warranty clause to confirm your software will work as intended and that there is no infringement on trade secrets, patents and copyrights. Definitely, include these considerations in your intellectual property software agreement.

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