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NEC3 PSC: X9 - transfer of intellectual property rights

+1 vote
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Are you able to assist with clarity/intent of X9 please?

X9 in the PSC centres on obtaining/transferring IPR in design prepared by subconsultants.

My query is when a contractor is engaged as the consultant (contractors design) with the employer,but engages sub-consultants to undertake the design.

X9 states:

"The Employer owns the Consultant’s rights over material prepared for this contract by the Consultant except as stated otherwise in the Scope. The Consultant obtains other rights for the Employer as stated in the Scope and obtains from a Subconsultant equivalent rights for the Employer over the material prepared by the Subconsultant. The Consultant provides to the Employer the documents which transfer these rights to the Employer."

If the Consultant is the contractor who engages a design team, the contractor is not themselves preparing any material for this contract, then surely the first line does not apply?

The text after that seems to be framed entirely by reference to the Scope i.e. any other rights (including those to be obtained from subconsultants) are to be obtained as stated in the Scope.

If the contractors design team are unwilling to transfer rights to the contractor and do not sign up to this, but the client is reluctant to not select X9 as it is a framework requirement, how can this be addressed though the scope?

Has this been addressed or altered in NEC4.

Any pointers welcomed.
asked Jan 22 in Secondary X, W and Y options by Neil Jeffs (390 points)  

1 Answer

+1 vote
If the contract is a PSC between an Employer and a Consultant, then the Consultant is the Consultant irrespective of whether that organisation's main business is 'contracting' and irrespective of whether it sub-contracts all of the work cover by the Scope.

In the second sentence quoted above, "The Consultant .... obtains from a Subconsultant equivalent rights for the Employer over the material prepared by the Subconsultant."  So the Consultant (who may be a 'contractor') is required to ensure that any subconsultancy contract includes a provision that the IP is transferred to the Employer in the main contract.

Clause 24 of the PSC requires acceptance by the Employer of any subcontract and a reason for not accepting is that the terms will not allow the Consultant to Provide the Services, which I would suggest includes the transfer of rights.
answered Jan 23 by dave meller (1,930 points)  
In addition to Dave's answer I'd also argue that failing to obtain the rights from the Subconsultant is a substantial failure to comply with his obligations which gives the Employer the right to terminate in accordance with clause 90.4.