Winning public tenders can open substantial opportunities for businesses. However, participating in these processes often involves navigating intricate intellectual property issues, particularly when delivering innovative solutions or creative services. This article provides a comprehensive guide to securing your intellectual property rights in public tenders, ensuring you retain control over your creations while meeting procurement requirements.

 Understanding the intersection of IP and public procurement

Why intellectual property clauses are important in public contracts ? Public contracts frequently involve the creation of intellectual works such as software, designs, or research. However, without well-drafted clauses, you risk losing rights to your creations. The inclusion of clear IP provisions ensures:

  • Defined ownership: Establishes whether rights remain with the contractor or transfer to the public entity.
  • Scope of use: Determines how the procuring entity may use the delivered results.
  • Fair compensation: Reflects the value of IP rights in contract pricing.

IP in public procurement is governed by national laws and sector-specific agreements. In France, the Intellectual property Code and the public procurement code define default rules for IP ownership and transfer in public contracts. Internationally, EU directives provide harmonized principles for public procurement.

Key IP issues in public tenders

Ownership of results

The ownership of intellectual property created under public contracts varies depending on the type of deliverables and the procurement model:

  • Licenses vs. ownership transfer: Default rules under French law (CCAG-PI, CCAG-TIC) often provide the public entity with a license, while exclusive transfer requires explicit contractual provisions.
  • Existing works: Contractors typically retain rights to pre-existing works incorporated into deliverables, but must grant the public entity a license for operational needs.

Use of Pre-existing IP

Clearly identify pre-existing IP or know-how and establish its legal treatment:

  • Declare all pre-existing elements upfront.
  • Use non-exclusive licenses to prevent the loss of proprietary rights.

Confidentiality and protection of know-how

Protecting trade secrets and know-how is critical:

  • Non-disclosure agreements: Ensure these are in place before tender submission.
  • Restricted access clauses: Limit the use and dissemination of sensitive information shared during the tender process.

Compatibility with open data requirements

Public authorities often require results to be shared under open access frameworks. Define the boundaries for such usage, ensuring it aligns with your business model.

 Drafting effective IP clauses in tender proposals

Several steps for writing these clauses:

  1. Clearly define deliverables

The contract should specify the IP status of each deliverable:

  • Distinguish between bespoke developments and standardized solutions.
  • State whether deliverables include software, designs, or reports.
  1. Specify the scope of rights granted

Define the following:

  • Territorial scope: E.g., national, European, or global usage rights.
  • Duration: Temporary or perpetual rights.
  • Purpose: Limit rights to specific uses (e.g., internal use).
  1. Address modifications and derivative works

Explicitly regulate:

  • The procuring entity’s ability to modify or adapt the work.
  • Conditions for creating derivative works or sublicensing.
  1. Include compensation for IP

Ensure your tender pricing reflects the value of IP rights being transferred or licensed:

  • Itemize costs related to IP creation and licensing.
  • Incorporate royalties for extended or expanded use.

Navigating complex scenarios

Collaborative innovation

When collaborating with public entities, co-created IP may arise. To safeguard your rights:

  • Establish co-ownership agreements, detailing how rights are shared and exploited.
  • Define rules for filing patents or registering designs.

Litigation and disputes

If disputes arise:

  • Refer to arbitration clauses or administrative jurisdiction defined in the contract.
  • Use preambles and detailed IP clauses as evidence of intent.

Handling open-source deliverables

When contributing open-source solutions:

  • Verify licensing terms align with procurement requirements.
  • Prevent conflicts between proprietary and open-source components.

Conclusion 

First of all, consult legal and IP professionals, as Dreyfus Law Firm, during tender preparation to:

  • Draft robust IP clauses.
  • Identify potential risks.

Then, review your portfolio to:

  • Identify IP that may be affected by the contract.
  • Ensure readiness for compliance and negotiations.

Then, benchmark standard practices in your sector for IP management in public procurement.

Finally, many procurement frameworks allow for dialogue phases—use this to clarify and protect your IP interests.

Securing intellectual property rights in public tenders requires a proactive approach, balancing the demands of public authorities with your strategic interests. By defining clear contractual provisions, understanding applicable laws, and protecting your pre-existing assets, you can safeguard your IP and build lasting value from public contracts.

Dreyfus Law Firm has been assisting clients in securing and maximizing the value of their intellectual assets. With deep expertise in intellectual property and tailored services, we ensure optimal management of your rights in public tenders and procurement.

Dreyfus Law Firm collaborates with a global network of IP attorneys to protect your innovations while maximizing their potential.

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 FAQ

1 – How to protect your intellectual property in a contract?

To protect your intellectual property in a contract, it is essential to include specific clauses detailing the rights and obligations of the parties. Key aspects to consider include:

  • Clearly defining the intellectual property covered (trademarks, patents, copyrights, trade secrets, software, etc.).
  • Determining ownership of rights: specifying who owns the creations and innovations developed under the contract.
  • Regulating the use of rights: setting out the terms for assignment, licensing, or usage of the intellectual property.
  • Ensuring confidentiality: including a non-disclosure clause to prevent the leakage of sensitive information.
  • Providing enforcement mechanisms in case of infringement (penalties, damages, termination, etc.).

A well-drafted contract helps anticipate disputes and secure the company’s intangible assets.

2 – What is an intellectual property clause?

An intellectual property clause is a contractual provision that defines the rights and obligations of the parties concerning protected creations, inventions, or trade secrets. It may cover:

  • Ownership of rights: clarifying who holds the intellectual property created or used under the contract.
  • Usage conditions: outlining the terms for assignment, licensing, or exploitation of the rights.
  • Protection obligations: ensuring confidentiality and preventing any infringement of intellectual property rights.
  • Remedies in case of disputes: specifying penalties for infringement, breach of commitments, or unauthorized disclosure.

This clause is crucial in service agreements, collaboration contracts, employment contracts, and distribution agreements to avoid legal uncertainties.

3 – What is trade secret in intellectual property?

A trade secret in intellectual property refers to a set of confidential information, methods, or technical processes that have economic value. This can include:

  • Manufacturing formulas or industrial processes.
  • Specific commercial or marketing strategies.
  • Proprietary databases.
  • Software or algorithms that are not patented.

Trade secrets are indirectly protected through business confidentiality and non-disclosure agreements (NDAs) but do not enjoy exclusive rights like patents or trademarks.

4 – How to protect your trade secrets?

Trade secrets can be protected through several mechanisms, including:

  • Confidentiality agreements: signing NDAs with employees, partners, and service providers.
  • Information access restrictions: limiting access to trade secrets to authorized personnel only.
  • Establishing proof of ownership: documenting and dating key processes (e.g., through notarized records or deposits with specialized organizations).
  • Employment or collaboration contracts: including confidentiality and non-compete clauses to prevent knowledge leakage.
  • Technical security measures: securing databases, software, and sensitive documents with encryption and restricted access.

These precautions ensure the exclusivity of trade secrets and prevent unauthorized use by third parties.