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TECHNOLOGY, OUTSOURCING, AND COMMERCIAL TRANSACTIONS
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS

The World Intellectual Property Office (WIPO) held its third “Conversation on Intellectual Property and Artificial Intelligence” on November 4, 2020, to discuss its revised issues paper on Intellectual Property Policy and Artificial Intelligence. This session identified the following issues:

  1. Defining artificial intelligence (AI) and future-proofing its definition as the technology evolves, exploring what is AI inputted and AI generated.
  2. The impact of AI on trademarks and the implications of human perception to determine registration and infringement of trademarks.
  3. The role of intellectual property (IP) policy in bridging the capacity gap.
  4. The policy implications of using AI in IP administration.

When a company desires to develop technology, it has two options: develop the technology in-house by its employees, or contract with a third-party developer to develop the technology. Any time a company contracts with a third party to develop technology for the company, one of the key issues in the agreement should be allocation of intellectual property ownership.

As 2018 comes to a close, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips. If you don’t see a topic you are interested in below, please let us know, and we may feature it in a future Contract Corner.

In Part 1 of this three-part series, we discussed how intellectual property ownership is determined in the U.S. if no agreement is in place. In this second part, we discuss the typical ways that parties can use contracts to determine intellectual property ownership.

In the context of negotiating an agreement where intellectual property rights are addressed, most parties will readily agree that those intellectual property rights owned by a party before the effective date of the agreement or developed outside of the agreement (commonly referred to as background rights) should be owned by that party.

Foreground Intellectual Property Rights

Unlike background rights, ownership of intellectual property developed under the agreement (commonly referred to as foreground rights) are often highly negotiated. When negotiating the ownership of foreground intellectual property rights, some questions the parties should consider are as follows:

  • Does the party that developed the intellectual property own it?
  • What happens if the other party is paying?
  • What if the intellectual property developed by one party is an improvement to the intellectual property owned by the other party?
  • What if both parties develop the intellectual property jointly?