Product development contract

This contract provides a high level of intellectual property security for the client. It is a supply contract for the development of any product that goes one step further by binding the developer to terms of non-disclosure and transfer of all IP rights to the client.
Suitable for use in: England & Wales and Scotland
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About this document

This is a comprehensive product development agreement for use in any business, particularly where data (relating to the business or to the end product) is sensitive. The development could relate to anything at all, whether tangible such as a mechanical part, or intangible such as a new legal document template or a formula for a detergent.

A large risk to protection of IP rights is not that the contractor breaks the agreement but rather that an associated person - an employee or a subcontractor - does so.

The agreement is drawn for signature by every person connected with the contract developer on any particular project. If you are the client, you should make sure this agreement is signed by every person who could steal or misuse the intellectual property. That way, you are not left with a claim against a business that no longer exists while its former employee earns from selling your IP.

The law relating to ownership of intellectual property in newly created rights varies from country to country, so it is particularly important to use this agreement as part of any arrangement for supply from outside the UK.

Within the UK, work done as an employee would usually be regarded as the property of the employer. Conversely, created work made by an employee in the USA usually belongs to the employee.

This agreement covers all variations and situations by absolute clarity of the proposition that the employer or client owns all the IP rights he has paid for. This is enforced by a long-stop provision for the legal transfer of whatever rights could slip through the net.

It is worded so as to include both past and future work. Insofar as any contractor is concerned, ownership of new IP is a matter for the contract terms.

The agreement moves seamlessly through sections covering confidentiality, particular projects, work for hire and past and future IP ownership.


The major subjects covered in this agreement are:

  • Definitions and interpretation
  • Warranties
  • Contract work
  • New intellectual property
  • Payment
  • Security provisions
  • Use of sub-contractors
  • Confidential information
  • Indemnities by contractors
  • Indemnification process
  • Insurance
  • Termination provisions
  • Other matters relating to enforcement and other legal issues

There are also over 1,900 words of drafting notes that explain each section and help you edit the document for your precise circumstances.


This document was written by a solicitor for Net Lawman. It complies with current English law.

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