Intellectual property held on trust in contract

Question

I am about to begin a contract job with a customer who asked me to provide the contract. I used the Qdos generic consultancy contract template (I let the customer know this is what I was doing) and changed some bits to make it relevant. But today they came back to me with a question about the IP and a particular clause:

Insofar as they do not vest automatically by operation of law or under this Agreement, the Consultancy holds legal title in these rights and inventions on trust for the Client.

What does this mean? I'm not looking for legal advice about the contract wording as I'm sure that would be out of scope for this site but I would like to understand why the IP may not automatically be transferred to the client or what sort of situations this clause would protect against.

The full Qdos template is here.

Answer 1

There are two parts to Intellectual Property. There is the stuff that the client is worried about: the sum total of an invention. Then, there is the stuff that you would really like to keep control of: all the bits and pieces and libraries that you build during this process and want to be able to use for another client without rewriting them again. As a freelancer, your value goes up as you have more and more code libraries to pull from. If you can't reuse code, you have to do a rewrite

This clause might be to cover this but it might simply be a way to identify that you don't transfer until you get fully paid.

You might want to amend the agreement to spell out that you are fully willing to transfer the IP of any invention to them and under what conditions, but would really like to have permission to use bits and pieces elsewhere.