This article points out that when parties enter a distribution agreement, it is prudent to take extra precautions to protect intellectual property. It is vital to understand that while a distribution agreement may be explicit about the retention or ownership of intellectual property embedded in the distributed product, it should also specify the length of any licenses to exploit intellectual property granted under the distribution agreement.
Furthermore, when granting distribution rights, owners of intellectual property should consider requiring distributor’s end users to sign an end user’s terms of service agreement to protect against any claims the end user may assert against any associated intellectual property.
Takeaway:
- Protect the supplier’s IP from distributor’s end users and customers as well as from the distributor.