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Ownership of Formulation Intellectual Property (IP)
We formulate various products for other brands. And for this service, we charge a fee.But who owns the IP of the formulation?Should this IP be considered to be included in the fee we charge for the formulation?Or should it be charged as a separate item to the client? In this case, would they be considered owners of the IP?Thanks. -
3 Replies
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Most Contract Manufacturers, if they develop the formula for a nominal fee, provide the client with a right to use the formula, but the IP is retained by the Contract Manufacturer. In many cases, the client is provided an IP buy-out option if they manufacture a large volume of units.
If you want the client to retain the IP, then charge a higher fee for development of the formula and specifically state who owns the IP in the contract.
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Thanks, @MarkBroussard this makes a lot of sense.Of course, the key is what to charge for the IP. Are there any generally accepted fee rates for formulations? -
That would vary by product, form/function, difficulty in developing the formula, etc. It really comes down to what you think your time and expertise are worth and negotiating same with the client.
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