Victorian government pushes IP policies for contractors

Victoria will become the first Australian state to allow contractors to retain ownership of intellectual property (IP), replacing uncapped liability with an evaluated approach.

Victorian Minister for Information and Communication Technology, Marsha Thomson also outlined plans for a levelling of insurance requirements for ICT contracts to better show the actual level of risk.

The proposed changes will ensure significant industry growth and is a step towards ensuring Australians are good producers of ICT, according to the Australian Information Industry Association (AIIA) CEO Rob Durie.

He said intellectual property is frequently one of the most contentious issues in negotiating contracts and the change to allow retention of IP by the contractor is expected to result in cheaper costs and more innovative offerings.

"International research of developed economies has revealed that even greater productivity is possible if IP is generated in the economy and can be commercialized," Durie said.

"The decision on IP, risk-based liability and insurance requirements should become the standard for all governments in Australia.

"Each of these actions has been championed by the AIIA and represents significant advances in ICT procurement practices, which would make Victoria particularly attractive to ICT suppliers."

Durie added that the federal Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, should now deliver on the election promise to both cap liability and allow more flexible arrangements for the commercialization of IP.

He said it has been more than 12 months since Coonan made the commitment "and we are still waiting to see runs on the board".

According to Marsha Thomson, the Victorian government will now amend whole of government ICT policy with four key areas and will implement these policies in the next few months.

1. To establish a 'default position' by which ownership of intellectual property in ICT developed under contract lies in the contractor rather than in the government.
2. Ensure that appointment of liability in ICT contracting reflects actual project risk and minimizes the need for ICT contractors to bear unlimited liability.
3. Ensure that types and levels of insurance required in ICT contracts are appropriate having regard to actual project risks.
4. Ensure that tender documentation specifies the expected contract provisions for dealing with these issues (following appropriate risk analysis), or flags that these will be negotiated with shortlisted suppliers.

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