In the rapidly developing open-source world of the Internet, it is currently in vogue to for software companies to forge partnerships. These partnerships consist of one company, a software developer, contributing software code to another company’s software platform. This code is often in the form of an “add-on application” that allows users to install applications on top of their originally purchased software. Once installed, these applications run as if they were part of the platform’s original software, but in fact, they were designed by outside software companies. In these situations, software designers and platform operators alike must execute a contribution agreement.

Before signing a contribution agreement, the most important decision for the platform-operating client to make is whether or not they will require contributors to assign the intellectual property (”IP”) rights in their contribution to the platform operator. For example, the Internet giant Facebook requires that contributors assign the IP rights to Facebook, but with the provision that Facebook automatically licenses back the IP rights to the developer to use in any way the developer wants. In other situations, such as contribution agreements with Sun Microsystems, the contribution agreement effectuates an assignment of joint ownership of the software code to Sun, the platform operaton. In case the assignment is or becomes invalid, the contributors grant to Sun a perpetual, irrevocable, non-exclusive license.

Once the platform operator and software developer have agreed on the transfer, assignment, or license of intellectual property rights, the rest of the contribution agreement pretty much falls into place.

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