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Deliverables - rights in

Any services contract involving deliverables should preferably specify what Acquiring-Party can do with them. In U.S. jurisdictions, if the contract is silent, Provider will generally own the rights to the deliverables, but courts tend to recognize that Acquiring-Party has the right to use the deliverables. Being at least modestly specific in the contract can help avoid confusion and disputes.

The Pactix rights-in-deliverables section pretty much tracks the general (U.S.) law summarized above. It allows Acquiring-Party:

  • to utilize the deliverables in Acquiring-Party's business as it sees fit, including for example, (1) making, using, or selling the deliverables, and (2) in the case of deliverables such as (for example) software, making and distributing copies of the deliverables as well as publicly displaying and performing them; and
  • unless the work order expressly says otherwise, to further develop all deliverables (or to have third parties do so) to support such utilization.

This is typically what services customers want for their business purposes. It will seldom be appropriate for Acquiring-Party to own outright all rights in a deliverable. Acquiring-Party ownership could needlessly complicate Provider’s life in the future, for example, if Provider wanted to re-use its work product, or if it were trying to do an M&A deal and needed to warrant its ownership of its intellectual-property rights. But for those occasions where Acquiring-Party is going to own the work product, the Pactix compendium provides a section entitled "Innovations: Ownership."

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