COVER INTELLECTUAL PROPERTY RIGHTS, OWNERSHIP, AND PROTECTION
Software vendors have multiple customers that make use of the same software and the vendors will want to make sure that they can continue to market and distribute their products, including any derivative works, to as many customers as possible. For that reason the software is provided through a license and not a “sale.” These customers may even include your competitors. While it is fair for the vendor to assert and maintain patent, copyright, and trade secret rights in software that they have already developed and made available for use in your business it might be appropriate to at least consider what intellectual property rights, if any, you might be entitled to as result of any customizations performed by the vendor. For example, if the project includes unique programming or significant modifications to the vendor software that is based on your specifications or special business requirements you might want to at least discuss ownership and the right to use of the new code. At a minimum it should be made clear in the agreement with a software developer that any unique business processes or data that are used by the developer or included in the custom modification remain proprietary to the business owner and cannot be reused with other licensees. These discussions regarding newly developed intellectual property can lead to some interesting negotiations including the potential for royalties paid back to the business for any newly developed intellectual property. As the owner of the copyright in any preexisting software the vendor will have the exclusive right to make any derivative works.
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