Context and Challenge

Our client was a prime contractor, responsible for delivering a DFID-funded project in Africa. Negotiations over the intellectual property rights clauses had gone on for months. Unable to break the deadlock, our client asked us for help. As our client was the prime contractor to their own client – DFID – we had to be mindful of the rights that DFID had under the head contract. Whatever obligations our client had agreed to in respect of the intellectual property rights clauses in the head contract the same obligations had to be mirrored in the subcontract.

Process and Insights

We analysed the contract that our client was negotiating with the subcontractor as well as the contract that our client had entered into with DFID. Our focus, of course, was on the intellectual property rights clauses. We also listened to our client to understand what work the subcontractor would be doing so that we could take a legal and commercial view on risk and the degree of importance that we needed to attach to the intellectual property rights clauses..

Solution

Having done the analysis, we concluded that the client had been taking an overly cautious approach in their negotiations. We advised the client that the intellectual property rights clauses that they had included in their standard subcontract agreement could be modified in line with the wishes of the subcontractor while still giving them the protection that the client needed. We amended the intellectual property rights clauses and sent them back to the client with a covering email to send to their subcontractor.

Results

It’s difficult for a project team to admit that when things go wrong it’s their fault rather than their client’s. We gave our client news that they didn’t want to hear but it was the right advice and our client acknowledged this.

Having accepted our advice our client softened their approach with FCDO, accepted that they were going to have to do a bit more work than they envisaged, got the project back on track and their invoices got paid.