A Manager's Guide to IT Law by Jeremy Holt; Jeremy Newton; Sarah Ellacott; Andrew Katz;

By Jeremy Holt; Jeremy Newton; Sarah Ellacott; Andrew Katz; Jean Morgan; All authors

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In relation to ownership, the contract should specify what IPRs are to be created or used, and precisely who owns them (including identifying the owners of any third party IPRs that are to be used or licensed). Copyright law contains a common trap for the unwary in relation to contracts for software development or consultancy work. The IPR in work undertaken by a contractor (as opposed to an employee) will normally vest in the supplier rather than the client. This means that an express, written assignment of copyright is needed if the aim is for the client to own these IPRs outright.

It is important for the client to look at the termination clauses of the contract offered by the supplier. The client will want to know how much notice they have to give to end the maintenance contract. This is often three or six months. g. five years). Contracts for software development Most software will need to be customized for the client by the supplier. However this is really only a tinkering with the main programs. In certain circumstances, it may be necessary for the client to commission new software because there is no existing software that meets the client’s needs.

Suppliers can be less keen because it demands a higher investment in the sales effort. To help to mitigate this effect, buyers should filter out the least suitable suppliers before a very short short-list is subjected to deeper scrutiny. This method worked very successfully, for example, with a recent procurement of ERP software and accounting software for a project-based business. In the ERP exercise, four suppliers were short-listed for two-day demonstration sessions which used the client’s agenda for 90% of the time; the suppliers were given the opportunity to show off the features that they chose only during the final session.

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