I am reading an agreement that our Company is signing with a University regarding a research project. The agreement has one clause which states:
Clause-x: Any IP generated in this Project will be jointly owned by UNIVERSITY and COMPANY.
Another clause says:
Clause-y: COMPANY will be offered first the right to avail of the exclusive right to commercially exploit the IP generated. If COMPANY wishes to avail of the said offer then both parties will enter into a separate agreement detailing the terms.
Clause-z: If COMPANY is not willing to avail of the offer then UNIVERSITY will be free to offer non-exclusive rights on the IP to third parties, based on consent from COMPANY, which shall not be unreasonably withheld.
The part that confuses me is this bit. Does this mean:
- Company is always allowed to exploit the IP for itself (after all, it is the joint owner in this IP!) but the "separate agreement" mentioned is only if the company desires exclusivity. i.e. The ability to block University from licensing the IP to others by paying a fee. In other words, as co-owner of the IP, the right to exploit the technology for itself always existed with the Company & is not what is being offered (for sale) here via Clause-y. What is being offered by University to Company (for payment) is for the University to forfeit its licensing rights as a co-owner OR
- Even for self-exploitation of the IP the company will need to sign a "separate agreement" with the University (and presumably pay it money / royalty)?
What's the right interpretation of this? I tent to think it is #1 but I'd love opinions.
PS. At some points the lawyers will come in & decide but since I saw the agreement I was curious to interpret it.