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This is an unofficial draft of Article 2B from April 15, 1998. For the current official version, see the University of Pennsylvania Law School (Official NCCUSL) site at http://www.law.upenn.edu/library/ulc/ulc.htm SECTION 2B-618. DEVELOPMENT CONTRACTS. (a) In this section: (1) " (2) " (b) If an agreement requires development of software, as between the developer and the client, the following rules apply: (1) Unless an authenticated record provides for a different result, the developer retains ownership of the informational property rights to the extent provided under applicable informational property law, but the client receives a nonexclusive license to utilize the software in any manner consistent with the agreement. (2) If an authenticated record or the provisions of applicable informational property rights law provide that ownership of informational property rights in the software passes to the client, but does not otherwise deal with the following issues, the following rules apply: (A) If the contract is not a work for hire, ownership of the completed software vests in the client under Section 2B-501, but revests in the developer if the developer cancels for breach of contract before the information is delivered to the client. (B) The developer retains any ownership reserved to it under applicable law and the right to use methods, components, or code developed before or independent of the contract, or developed during the duration of the contract but not required by the contract to be delivered to the client. (C) The client has a nonexclusive license to use the components or code delivered as part of the software to which it did not obtain ownership under applicable law. (c) Neither party has the right to use confidential information of the other party which was identified as confidential except as provided in the agreement. (d) Language in an authenticated record is sufficient to indicate an intent to place ownership in the designated party if it states "All right, title, and interest in the software will be owned by [named party]", or words of similar import. (b) On request of the client made in a record delivered to the developer, the developer shall notify the client if it used independent contractors or information provided by other third parties and shall provide the client with a statement that either confirms that all applicable informational property rights have been obtained or will be obtained, or that it makes no representation about those rights beyond any stated in the agreement. The statement must be made within 30 days after the request is received unless the time for performance of the development contract is less than 30 days, in which case the statement must be before completion of performance. Uniform Law Source: NoneCommittee Action: a. Motion to delete the clause in (b)(2)(D) following the word "but", rejected 2-5 (June, 1997). b. Motion to delete rule on ownership allocation, accepted 8-1 (September 1997) c. Motion to delete the section. Vote: 8 - 2 d. Motion to not include subsection (d). Vote: 10 - 0 e. Motion to include (e). Vote: 7 - 2 Reporter's Notes: The Section provides important protection for a licensee not found in current law. The section reacts to a problem created under federal intellectual property law, especially as to copyright ownership. Copyright law allows independent contractors to retain copyright control of their work unless they expressly transfer it. The licensee, even if unaware of the contractor's rights, is subject to them since intellectual property law does not contemplate good faith buyer protection. The section places an obligation on the developer of software to respond to a request of the licensee. This does not supplant warranties against infringement or warranties of title, but sets out a method to potentially avoid those problems. |