Customized Goods and Managing Risk With Terms of Use Agreements

Increasingly, businesses are attempting to tap into customers by providing an option to customize the products and services they ordered.  Depending on the industry and type of business a customer could be an individual, a private corporate entity, a non for profit or a governmental agency.

Providing customers with more control and options over modifying the goods or services they order also helps establish better relationships with customers.  In a sense, the customer almost becomes a valued partner, employer or consultant for the business.  The following are some example of customizing goods for consumers: Mircosoft and Windows 7 operating system, Dell providing computer options for customers, operations software suppliers, etc…

Many smaller companies and clients also recognize the advantages of making the customer a part of their production cycle.   However, often there is no assignment of intellectual property rights associated with receipt of the customers input.  Often the customer provides input over the website or an order placement site that could manage the risk of potential intellectual property claims with a good Terms of Use Agreement.

Currently, Terms of Use Agreements are often used by website owners to manage privacy and confidentiality of consumer information and provide end user licenses.  However, Terms of Use Agreements may also be used to transfer intellectual property rights from the customer providing input to the business or website owner.  Consequently, the Terms of Use Agreements can help manage and mitigate the risk of infringement claims from a customer that provided input on a successful product.

In essence, the Terms of Use Agreement can be modified into a hybrid Submissions Agreement used in many industries. Of course, if you have any concerns or questions, then please feel free to contact us.

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