The feedback license appears in many tech contracts. It usually gives the vendor a broad, perpetual license to any “feedback” from the customer’s staff: any suggestion about the vendor’s products and services. Sometimes the clause goes further, assigning ownership of feedback to the vendor. (Click here for a full-length example.) The problem is, no one can actually own an idea or suggestion. There’s no such thing as a patent or copyright on an idea. And if no one would own feedback, what does the clause license or assign? What does the feedback clause actually do?
What does it mean?
There are three possible interpretations:
- No Impact: The feedback clause has no impact whatsoever. That’s possible, but it seems likely a court would try to find some meaning.
- No Trade Secrets: The clause means feedback is not the customer’s trade secret. So if the customer would’ve had trade secret rights in a suggestion about the vendor’s product, those rights don’t apply. But that’s far-fetched because it’s hard to imagine a customer trade secret covering a suggestion about the vendor’s product.
- Real IP License: The clause grants rights to IP somehow related to the feedback. So if the customer invents something related to its staff-member’s suggestion about the vendor’s product, and it patents that invention, the vendor owns the patent or has a license. Or if the customer writes software related to the feedback, the vendor owns the copyright or has a license. But that’s also far-fetched because it’s hard to imagine the customer meant to transfer a copyright or patent through such a short, casual clause, with no royalties, accounting, etc. It’s also hard to guess at the connection necessary between the feedback and the patent or copyright. Feedback is an idea, which again can’t be patented or protected by copyright. So the patent or copyright would have to cover some other asset created by the customer, possibly loosely related to the idea.
None of these interpretations is fully convincing, but that’s all we’ve got.
If you’re the vendor, you might hope interpretation #3 applies (giving you some kind of IP license). And you might feel satisfied with #2 (no trade secrets) and cross your fingers that it’s not #1 (no impact at all). And maybe you don’t worry about it much if you’re well-informed about IP, since the apparent purpose of the clause – securing rights to the customer’s idea – isn’t necessary anyway. You can risk a meaningless clause. And if it’s not meaningless, you got something from the customer, though you might not know what.
The customer’s big feedback problem
If you’re the customer, however, the feedback clause could really hurt you. What if it’s interpretation #3? You’ve granted a license to a patent or copyright or possibly multiple patents and copyrights, though you have no idea which ones or whether you’ve given rights to present or future IP. Or, Heaven forbid, you’ve given the vendor ownership of company IP, in a feedback assignment – and again, you have no idea which IP. You’ve cast a shadow over your company’s future IP development, and you don’t know how bad it is, because you don’t know what feedback your staff might give.
For customers, the solution is, don’t give a feedback license or a feedback assignment.
You might be able to convince the vendor, since the feedback clause request probably rests on a misunderstanding. Most vendors who want the clause think the customer would own IP in any feedback it provides. It won’t. There is no IP, since no one can own an idea.
The Feedback Disclaimer
It might also help to offer an alternate clause: one that should satisfy the vendor’s lingering doubts about “ownership” of feedback, if any, without casting a shadow over the customer’s IP. I call it a Feedback Disclaimer:
Provider has not agreed to and does not agree to treat as confidential any Feedback (as defined below) Customer provides to Provider, and nothing in this Agreement or in the parties’ dealings arising out of or related to this Agreement will restrict Provider’s right to use, profit from, disclose, publish, keep secret, or otherwise exploit Feedback, without compensating or crediting Customer. Notwithstanding Section __ (Confidential Information), Feedback will not be considered Customer’s Confidential Information or its trade secret. (“Feedback” refers to any suggestion or idea for improving or otherwise modifying any of Provider’s products or services. Feedback does not include any suggestion or idea to the extent that it solely addresses Customer’s products or services.)1See the same language in our clause library.
That’s it. That clause confirms that the agreement doesn’t limit the vendor’s rights to feedback. Not even the confidentiality clause limits the vendor’s rights. The clause also confirms that the customer knows the vendor will use feedback and has that right. And of course, it puts aside any trade secret concerns. But it doesn’t transfer IP in unknown assets that might not exist yet.
Vendors should consider the feedback disclaimer a potential improvement. It gives you clearer terms than a feedback license or assignment. And you don’t risk a meaningless clause.
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This post updates a series we published in 2011 and 2013. See, The Anti-NDA for Idea Submissions.
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