Assigning progressive IP rights and Source code from outsourced IT firms

Working with Outsourced IT companies to assign Source Code and IT rights

Should progressive IP rights / Code be assigned as each invoice is paid? Yes

When is the best time? As invoices are paid in real-time.

This gives the Client the Source code and IP / copyright ownership as each work block is paid for.

It is unrealistic and possibly detrimental for the Client to wait until the whole project has been completed, as this leaves them vulnerable to misconduct from the IT firm.

Assigning progressive IP rights as each invoice is paid can be a beneficial approach for both clients and service providers. This method ensures that the Client gradually obtains IP rights as they pay for the services, while the provider retains some control over their work until they receive full payment.

Here are some advantages of using progressive IP rights assignment in a contract or SLA

• Encourages timely payments: Clients may be more inclined to pay promptly to secure their rights over the developed work products by tying IP rights to invoice payments.
• Mitigates risks for both parties: This approach ensures that clients receive value for their payments while protecting providers from potential non-payment or delayed payment issues.
• Incentivizes project completion: Progressive IP assignment can motivate both parties to work towards successful completion. The Client gains full IP rights only after all invoices are paid, and the provider can ensure payment for their services.
• Facilitates better collaboration: Progressive IP assignment can foster a sense of partnership between the Client and provider, as both parties work together towards the completion of the project and transfer of IP rights.

To implement progressive IP rights assignment, you can include specific clauses in the contract or SLA that outline the process. For instance, the agreement can state that the Client obtains IP rights for particular milestones, deliverables, or services upon payment of the corresponding invoice. Additionally, it's essential to clearly define the scope of work, deliverables, and payment schedules to ensure transparency and prevent disputes.

While progressive IP rights assignment can offer several benefits, weighing the potential risks and challenges, such as the possibility of disputes over unpaid invoices or partial work products, is crucial.

Ultimately, the decision to use progressive IP rights assignment will depend on both parties' specific needs, objectives, and risk tolerance.

We think that it is a must/ a baseline essential.