Overview
We provided our client with a software supply, licensing and support agreement.
Context and Challenge
Our client had developed software for use in the steel industry. The app was able to take blast furnace temperature measurements to supply data that would inform blast furnace controllers on optimal steel processing controls.
We had a few challenges to overcome. Firstly, our client was already supplying their software so we had to make sure that the IP was protected retrospectively. Secondly, our client was working with a very large steel producer based overseas where decisions taken on their side would take
Firstly, our client was working with a very large steel producer based overseas. The steel producer wanted our contract to align with certain of their requirements and we understood that decision making within the larger organisation could be slow. Our client wanted things wrapped up asap because they hadn’t been paid yet for the use of their software.
Secondly, our client was already supplying its software to the steel producer. It was important to protect our client’s IP retrospectively and as soon as possible.
Thirdly, while one always needs to consider how to limit and exclude liability when acting for a supplier, in this case, building in suitable protections and disclaimers was particularly important because if our client’s software gave out the wrong information which the steel maker relied on, the results could be catastrophic.
Process and Insight
We always try to produce contracts that are sensibly balanced to avoid lots of red lines coming back from the other party’s lawyers. In this case this was especially important. We spent time with the client running through the implications of adopting various positions within the contract and coming up with practical legal and commercial solutions to take.
We undertook careful analysis of the IP in the software noting what aspects were developed by our client and the extent to which any third party-owned or open-source software was included in the product.
We spent quite a lot of time understanding exactly how the software worked and the process for using it on the steel producer’s side. We also wanted to understand how things could go wrong and what the impact could be.
Solution
When we sent the draft contract to the other party, we sent it with a note setting out in detail why we had adopted the positions that we had taken, addressing many of the points that the steel producer had raised at the outset and allaying concerns. While this added to the upfront work, it meant that it was easier and therefore quicker for the other party to respond to us and for the parties to be aligned.
We produced a contract that covered the licensing of the existing software and the development and licensing of any additional functionality built on top of the core modules. The contract also addressed maintenance and support for the software with SLAs and service credits.
We provided bespoke and detailed drafting around IP ownership and licence rights.
Regarding limiting our client’s liability and other disclaimers, we drafted bespoke clauses detailing the limitations in our client’s software so that these were very clear to the steel producer. We came up with processes that the steel producer should follow to mitigate risk.
Results
Our client was able to wrap things up fairly quickly with the steel producer and the software has been successfully developed and rolled out to other plants and companies within the producer’s group.
