Whose Intellectual Property is it Anyway?

I have, from time to time, had specific discussions with some of our clients about Intellectual Property – particularly, the ownership of the IP used or created in the projects we work on.

I recently created a document to be shared with a clients’ legal adviser to put forward, what I believe, is a reasonable approach to the subject in our world.

Our World = Where QGate is the provider of CRM or BI solutions based on an existing product.

I am aware that the view of IP ownership may vary by industry and circumstance. This blog is offered as a suggested way forward. It is also the way QGate operates as a policy.

Our disclaimer, definitions and further notes can be found at the end of this blog.

QGate’s Standing Principles 

  • QGate is an enabler.  We are here to assist and enable organisations to implement systems which benefit them.
  • We do not and should not “own” the resulting system.
  • Our clients should be at liberty to make as much or as little use of QGate as a services and support provider as they require.
  • Our clients should also be at liberty to decide if they wish to continue with QGate’s services.
  • Our clients should not be restricted in any way by what QGate has created or developed as part of the engagement with QGate, except only in a very limited way.

We are aware of certain practices of some other providers where quite severe restrictions have been applied, which has meant their customers can only use the initial supplier to support, maintain or modify the system.

In other cases, the source code is not made available, requiring those customers to re-build from scratch should they move away from the original supplier.

QGate’s view is that client retention is maintained through providing good customer service and experience, not by applying or relying on restrictive practices.

We do consider that each of our clients receives benefit from the experience we have gained from all of our previous client engagements.

We believe that being able to re-use snippets of code, ideas, sub-modules, IP and more from previous projects is crucial in delivering an effective service going forward.

It is, therefore, important that we are not restricted from re-using similar developments or IP from our future engagements.

Retaining a Competitive Advantage

QGate automatically restricts a client from re-selling our IP as a component. However, there may be some circumstances where this may be appropriate and QGate, by specific written permission, will allow this.

Basically we do not wish to allow someone to compete against us using our own IP! Likewise, our clients should be protected against QGate selling the solution we built for them to a competitor.

We understand there may be cases of a client wishing to retain the IP of the overall solution to prevent this; it is possible that we would be willing to discuss the terms of such an arrangement.

QGate’s Approach to Intellectual Property and Licencing

QGate’s approach to IP and licencing under which QGate operates are summarised as:

  1. QGate as the author will own all IP, including Copyright, created as part of an engagement.
  2. Any pre-existing IP that a client brings to the project will remain the IP of the client even if QGate works with it to re-engineer it to be appropriate to the project.  In all such cases, it will be appropriate to define this as part of the engagement terms and conditions.
  3. Where 3rd party products are used, the IP of these products remains the property of those 3rd parties.  IP created using those 3rd party products would rest with QGate.
  4. QGate will provide a non-exclusive and perpetual licence to the client to allow the use of pre-existing QGate IP and any IP generated as part of the project.  This licence will include the ability for the client re-work, distribute internally and allow 3rd party access to the IP should the client wish to involve a different supplier.  It will be the responsibility of (and the terms and conditions will provide that) the client will ensure QGate’s IP is protected in these circumstances.
  5. The licence will not allow the re-distribution of the IP outside of the client or that part of the client’s organisation by whom QGate is engaged.  Separate written permission must be obtained to do this.
  6. Where a client is concerned about the overall solution created as result of a project, QGate will agree on the terms under which the IP of the overall solution will rest with the client, including that. QGate will agree not re-sell the overall solution to another party.

Foreground and Background IP – Solutions and Components

These terms have been used in situations where multiple parties combine to create a solution. They allow for ownership to be applied to pre-existing and/or newly created IP

There are a variety of definitions depending on the target industry but in the software development arena they can be defined as:

  • Background IP – relates to component design, logic, data schemas, user interfaces, code snippets or other elements used to build a solution. Some IP may already exist and therefore ownership will be retained by the existing owners.  (I note that in some industries it is not uncommon for the ultimate client to wish to gain ownership of pre-existing IP from the suppliers – this would come at a cost of course) Some Background IP may be created during a project.
  • Foreground IP – relates to the overall solution.

Consider a Dell PC.

It is made of a number of components supplied by various suppliers such as Intel, Kingston, Hitachi and by Dell themselves. These are effectively the Background IP.

The IP of the parts/components supplied by the likes of Intel will reside with those suppliers. However, Dell retains the overall Foreground IP of the completed PC.

QGate considers its delivered software solutions to be constructed, and the IP ownership managed, in a similar way.


The topics and terms put forward for discussion in this blog article are provided for guidance only and are not intended to constitute legal advice to the recipient or to be legally binding upon QGate Software Limited. However, to the extent that the principles and approaches discussed are implemented as part of our standard terms and conditions of business, in that context, they shall be contractually binding upon us and our clients.


Sample Definitions and Terms


Deliverables:  any Change Request, the Documentation, the Configured Software, know-how or other works created or supplied by the Supplier (whether alone or jointly) in the course of providing the Services.

Foreground IP: Is the IP related to the overall solution, i.e. the end to end application as designed and built for use by the client.

Background IP: Is the IP related to the component designs, logic, code, database schema and any other contributing elements used to build the solution.

NN – Intellectual Property Rights

Subject to Clause NN.1 and NN.2 all Intellectual Property Rights (IPR) in the Deliverables shall vest with QGate.

NN.1 If any exists and is detailed in the Client IP section of the agreement, the Client or its Licensors shall retain all right, title and interest in and to the client Background IPR.

NN.2 QGate will not re-market, re-sell or re-distribute the resulting solution constituting Foreground IP

NN.3 IPR related to 3rd Party products or components, including QGate authored products will vest with the 3rd Party in question.  IP created using the 3rd Party products or components will vest with QGate.

NN.4 In respect of QGate IPR used or created as an integral part of a Deliverable, QGate hereby grants to the Client a worldwide, fully paid-up, non-exclusive, irrevocable, perpetual, royalty-free licence to:

  1. Copy and modify such QGate IP
  2. Publish, distribute and make available such QGate IP as an integral part of the relevant Deliverable
  3. Enhance, decompile, reverse engineer and translate such QGate IP
  4. Sub-license third parties to do any of the foregoing, in connection with the Customer’s use or dealings in the relevant Deliverable.

In relation to future IP (including copyright), such licence shall take effect as a present licence of future rights.

NN.5 Such licence does not include the sharing or distribution of IP outside of the client organisation under any circumstance unless prior written permission is obtained from QGate.

The recommended terms and topics put forward for discussion in this policy document are provided for guidance only and are not intended to constitute legal advice to the recipient or to be legally binding upon QGate Software Limited.

However, to the extent that the principles and approaches discussed are implemented as part of our standard terms and conditions of business they shall be contractually binding upon us and our clients.

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