Often in contracts, clauses relating to using and sharing information are split into ‘legal chapter headings’ ie topics that make sense to the contract writer but don’t necessarily reflect the needs of the contract user.
When I create contracts I prefer a user-focused heading like ‘using and sharing documents and data’. This covers:
- copyright ie what rights each party has over the content of/ideas in documents shared or created during the project
- confidential information shared during their relationship
- marketing or publicity about their relationship or the project
- data collection, processing and storage.
One misunderstanding that we have about sharing information is the ubiquitous non-disclosure agreement. They may be used alongside a contract, with/without a confidentiality clause. An NDA is best used before you have a contractual relationship… and if one has been signed beforehand, you probably don’t need a confidentiality clause in the contract as the NDA will cover the project period as well.
Contract minimalism?
In my series of books on writing construction contracts in just 500 words only one dealt with copyright and confidentiality: consultant appointments.
None of the rest of them dealt with these topics. My reasoning was:
- there is an implied (under English case law) copyright licence for documents created during a project provided the related fees have been paid; where no designs are being created specifically for a project this is probably sufficient.
- confidential information is information which is business-sensitive ie the release of which would harm your contractual partner. There are very few occasions when a recipient would not know that information shared should be kept confidential; and there is an implied duty to keep such information private in any event (under English case law).
- data management is dealt with under the EU General Data Protection Regulations, UK Data Protection Acts as well as national data legislation. As this is a requirement for any business handling data, a contractual term to that effect does not affect their behaviour or tell them something new. Where significant data elements or specific categories of protected information are being shared, a more in-depth clause should be used. A generic one-liner wouldn’t really help the parties.
- whether one party wants to use information for marketing can be dealt with outside the terms of the contract… and is probably only relevant once it has been a success! So a contractual term is perhaps a little premature in any event.
When it comes to copyright, you need to consider who should retain or obtain rights over the ideas in the documents or records (however recorded); and any restrictions on licences granted. An exclusive licence can be a simpler alternative to vesting copyright in the property owner – as they would then have to licence the project team to use those documents during the design, build, operate and maintain stages.
If you are designing small works or subcontract works, then read Chapter 12 from How to Write Simple and Effective Consultant Appointments in Just 500 Words and adapt the copyright clause from the consultant appointment sample. You can also get short and longer form confidentiality clauses from Chapter 13 of the same book.
What should you do?
Before you work out the clauses you want, consider the documents and data you will be sharing during the project and how you would want them to be used. Don’t ignore existing documents that are shared or data created during the project.
