We are regularly asked to complete a request for proposal or sign a contract with our clients which asks for ownership of the intellectual property in our matrix, virtual and global training programs to pass to them. These are often standard clauses which I think were originally meant to apply to product purchases where there is a physical transfer of an asset of some kind.
However, with professional services this is much more of a problem. As most of these clauses are written, it would mean that once a training company delivers a single program for that client, that the client owns all of the intellectual property in the program.
This sounds fine from the client point of view but from the training company point of view this means that you don’t own it any more. That means that you could never sign such a contract again because you no longer own the intellectual property that you are being asked to sign over. Taken to its logical conclusion you can only ever have one client for a program.
The client would then be free to license this program to anyone else to deliver or use it in any way they wanted internally or externally.
When we point this out to clients 100% of them say “of course that’s not what we intend” and many of them say “well all of our other suppliers have happily signed it”. I can only assume that this means that they have not read the clause or have not understood the implications.
It is perfectly reasonable for clients to own intellectual property that they have specifically paid for the development of – for example tailored case studies or materials specific to their organisation. The best contracts provide for this and for pre-existing intellectual property to remain with the supplier.
It’s also reasonable for participants on programs to receive a license to use the tools and materials they received at the training in their jobs – it would be pretty strange to be trained in something and then not be able to use it! Most contracts include a provision for licensing this kind of intellectual property – however this causes another problem.
We only use our own intellectual property in our programs so we are able to license this to our clients – because we are the owners. Our clients often tell us that other suppliers are offering programs based around well-known models, to take one example “situational leadership”. This is a model owned by the Ken Blanchard organisation so if your program is run by them you have no problem; they own the IP and can license it to you freely.
If it is an organisation not licensed by Ken Blanchard then they have no right to sub-license the material and may actually have no right to use it. Unfortunately the training industry is full of people with a rather cavalier attitude to IP ownership.
If it is an organisation that has been licensed by Ken Blanchard then it’s worth checking your suppliers’ agreement to make sure that they have the right to sub-licence Blanchard’s material further. I would be surprised if they are legally able to do this.
This may seem like an esoteric point but it is important to you as a company to use materials legally and to have the right to use the IP you’ve been trained in then it is important to get this right. If it is a condition of your contracts and request for proposals it is worth checking the suppliers have the ability to deliver on these clauses – particularly when you know the IP is not their own.
During my corporate career I found that one of my trainers had taken on a program designed around someone else’s intellectual property without my knowledge. As an ethical company we contacted the IP owner when we found out and ended up making a £50,000 (25 years ago) payment to the author to resolve the problem.
If you are a training supplier responding to a request for proposal or signing a contract you should also make sure that you have the legal right to sign that contract.
If you work with us you can be sure that we have the right to license all of the intellectual property in our matrix management, virtual teams and global working programs. Can your other suppliers say the same?