Cooperation, Service and Cloud Agreements

Legal Aspects of Technology Management - NIT Northern Institute of Technology Management, Hamburg · part of my Technology Management MBA · study notes for revision.

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The afternoon of this session moves from documents that only stop people talking to documents that make people work together. A non-disclosure agreement says what you may not repeat. A framework cooperation agreement says what two parties will actually do for each other over years, who pays whom, who owns the ideas that come out of it, and how the whole arrangement is taken apart again if it stops working. The class gets a real sample agreement of this kind, sixteen pages of it, and spends the afternoon pulling it apart clause by clause.

The case behind it is deliberately human. A friend called Vanja keeps inventing objects of daily use - new sunscreen packaging, aeroplane seats, car suspension, motorbike suspension, lift brakes - and a company now wants to market those inventions. Vanja would like a share of the profits, is very clumsy in business, and would rather spend the time inventing than negotiating. Vanja asks you for help. That is exactly the position most technical founders and most corporate R and D people are in: the value is in the head, the distribution is somewhere else, and the only thing joining the two is a contract.

The sample the class works with is called a Framework Cooperation Agreement on the Distribution, Marketing and Further Development of Industrial Designs, made between a DESIGNER and an engineering company referred to throughout as the MARKETER. The last hour of the day then turns to cloud agreements, where the same checklist has to be run against a contract you did not draft and usually cannot change - and where, since the Data Act became applicable, a good part of the exit clause is written into the contract for you whether the provider likes it or not.

Tip

The one idea to carry through. A framework agreement is not one deal, it is a container for future deals. It fixes once and for all the things you never want to renegotiate - who may use which rights, who owns what comes out, how you report, how you are paid, how it ends - and then each new development drops into that container through a short declaration. The two clauses that decide whether the container is worth anything are the grant of rights and the termination and reversion clause, because between them they say what the other side may do while the contract runs and what it must stop doing when the contract is over.

1 · Why a framework agreement rather than a one-off contract

A purchase contract handles one object once: this machine, this price, delivered here. Vanja’s problem does not have that shape. There is a stream of inventions, some of which already exist and some of which do not exist yet, and each one may need marketing, further development, or distribution, or all three. Signing a separate full contract for each would mean renegotiating ownership, liability, confidentiality and payment every single time, with a partner who has more lawyers than you do.

The framework agreement solves this by separating the standing terms from the individual case. In the sample, the developments that already exist when the contract is signed are simply listed in Annex 1, which becomes part of the contract. Everything invented later is brought in through a much lighter mechanism, and that mechanism is worth learning by heart.

The framework agreement is signedstanding terms: rights, reporting, money, liability, secrecy, termination, governing law

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Annex 1 lists the developments that already existit is expressly made part of the contract

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A future development is offeredthe designer grants the rights by a separate declaration together with a development description

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The marketer accepts the offered marketing, further development or distributionat that moment the declaration becomes an integral part of the contract and all the framework terms apply to it

The framework and the individual work order. The heavy terms are agreed once; each later invention joins through a declaration plus a development description, and acceptance is what pulls it under the umbrella.

That is the answer to the first of the session’s questions. A framework cooperation agreement contains the regulations you do not want to argue about twice, and the individual statements of work underneath it contain only the description of the thing itself.

What regulations does a framework cooperation agreement contain?As a designer or inventor, why make a contract about distribution, marketing and further development at all?What is missing or could be improved in this agreement?What kinds of IP protection would you recommend to the inventor?What happens if you use an internet contract-template machine instead?

The template-machine question is the one to sit with. Everything below is the answer: a generated cooperation agreement will give you headings, but it cannot know that your designer is also an employee of the marketer, that the rights must be revocable, or that the results of joint further development have to be pushed to one named owner at the moment they are created.

2 · The clause map of the sample agreement

The session summarises the cooperation agreement as a list of eleven numbered sections plus an attachment list. Learning this list is most of the work, because it doubles as a checklist for any cooperation you are ever asked to review.

Clause	What it settles
1 · Preamble	Who the parties are, what each does, what is being covered and the objectives the parties want to achieve
2 · Subject matter and territory of the contract	Which developments are covered, how future ones come in, the contract area, and whether the arrangement is exclusive
3 · Duties of the MARKETER	The actual services the performing party owes
4 · Granting of rights to the MARKETER	Which rights of use are given, how far they reach, what may be sublicensed, and who owns what is created
5 · Promotion and reporting obligations of the MARKETER	Sales promotion, advertising approval, and the reports that let the other side see what is happening
6 · Minimum exploitation targets	How much use has to be achieved, and the fallback if the parties cannot agree
7 · Gratuity	The commission, how it is invoiced, and security if the payer looks shaky
8 · Liability	Where liability is unlimited, where it is capped, and the events nobody is liable for
9 · Non-Disclosure	Confidentiality inside the cooperation, including the penalty and how long it survives
10 · Duration and Termination of Contract	Notice periods, extraordinary termination, and the unwinding
11 · Concluding Provisions	Written form, assignment, severability, insurance, governing law and place of jurisdiction
Attachment List	Annex 1, the list of the designer’s current developments

3 · Preamble, subject matter and territory

The preamble is not decoration. It establishes who is who, and in this sample it also draws the single most important line in the whole document. The designer invents and develops objects and solutions for industrial needs in his spare time - the examples given are easily removable seats for passenger transport such as aircraft, wine glasses that can be sealed, apps, packaging, furnishings and equipment for yachts and sailing ships, and headphones. The marketer is described as an engineering service provider working in Urban Mobility, Industrial, Energy, Aerospace and Defence, Commercial Mobility, Healthcare and Disruptive Engineering, present in five European countries with fifty locations and more than four and a half thousand employees.

Then the sentence that matters: the designer has been an employee of the marketer in the Disruptive Engineering department since November 2018, and this contract refers only to developments the designer makes outside the place of work in free time. Without that sentence, nobody could tell which inventions belong to the employment relationship and which belong to this cooperation.

The preamble closes with the objectives the parties want to reach: worldwide sale of the contractual developments, and their further development to product or market readiness. Those objectives are load-bearing, because clause 10 later makes their failure a reason for extraordinary termination.

Clause 2 then fixes the scope in a way worth copying:

What the marketer gets the working room

• Takes over marketing, distribution and further development of existing and future developments until they are ready for product or market
• Is entitled and obliged to call itself an authorised dealer or distributor during the term
• Acts as a free and independent company, in its own name and for its own account, and may set its own activities and business hours
• Procures and maintains the operating and advertising materials it needs, while campaigns are developed and coordinated jointly
• May run its own sales organisation, branches and business partners

What the designer keeps the control

• Must always be named in trade as author, inventor or developer of the developments
• Sets, determines and amends the general sales policy, including the licence terms used with end customers and the type and scope of the functionalities
• May refuse any proposed business partner without giving reasons, and may require the marketer to involve partners the designer proposes
• May reduce the contract area at any time, or appoint further marketers, dealers or developers
• Keeps a direct business reservation: there is no exclusive marketing right, and no commission is owed on the designer’s own direct business

Scope and territory. The contract area is worldwide, but almost every grant is qualified by a control right kept on the designer’s side.

Two mechanics inside clause 2 are easy to miss and worth remembering. The marketer is not authorised to represent the designer in any legal transaction, so it cannot sign anything in the designer’s name. And before involving a business partner in marketing, further development or sale, the marketer must obtain the designer’s consent and give the partner’s name and registered office in text form, by e-mail, one month in advance, which can be handled through a business-partner list kept permanently up to date.

4 · How decisions actually get made

There is no steering committee in this sample and no project board. Governance is done instead through a chain of consent rights, approval rights and information duties, which is the more common pattern in a two-party cooperation.

Consentbusiness partners, changes to developments, own IP filings, assignment of the contract

Approvaladvertising content, media and measures, and the tonality of the campaign

Instructionsales policy, end-customer licence terms, further services the designer may demand

Informationhalf-yearly sales figures, annual reports, access to books and stored business data

Governance without a committee. Each decision type is allocated to one side in advance, which is what stops the cooperation from stalling.

Caution

The sample contains no clause creating a joint steering body, no escalation ladder and no deadlock procedure, so I have not written one into these notes. That is one honest answer to the session’s question about what is missing or could be improved: everything is resolved by one party holding a veto, which works while the relationship is good and offers nothing when it is not.

5 · Duties and contributions: the performing side of the deal

Clause 3 is where the cooperation becomes a service relationship. The marketer provides the marketing, distribution, any further development and all necessary services to end customers in its own name and for its own account, and is obliged to include the designer in all steps. The listed duties are:

• Further development according to the end customer’s specification, with the designer involved
• Preparation of the jointly agreed production and series readiness
• Carrying out any necessary installations at the end customer
• Preparation of any necessary technical documentation
• Applying for and obtaining any official permits or approvals required
• Attaching any necessary product and warning notices
• Carrying out any necessary training
• Always naming the designer as the owner of the respective industrial property rights, at the marketer’s cost, for trademarks, designs, patents and utility models, with the option of having its own licence entered in the register for the duration of the contract
• Maintenance and servicing of the designer’s developments or prototypes

How those services are performed towards end customers, authorities or third parties is left to the marketer’s own discretion. On top of that, the designer may at any time require further services for the end customer’s use of a development, and the marketer must then provide or offer them itself or through business partners against a separate remuneration agreement with the end customer, as far as this is possible and reasonable.

6 · Granting of rights: what is brought in, what is created, who ends up with it

This is the clause that most often decides whether a cooperation was a good idea. The session first gives the general licensing vocabulary, then the sample shows it applied.

Simple licence a right of use only

• The licensee gets a simple right of use
• The licensor keeps the right to exploit the subject matter itself and to grant further simple rights of use to others
• Licences can be limited in space, time and content, as in a grant of a limited, non-exclusive, personal, non-transferable and non-sublicensable licence to access and use software in one country during a stated service period

Exclusive licence and buy-out the right leaves you

• An exclusive licence agreement means the complete transfer of ownership, so the original right holder is regularly excluded from its own exploitation or use
• A licence agreement transfers a partial right of use or exploitation of an industrial property right - patent, utility model, design, character, semiconductor right, trademark - against licence fees
• A buy-out or asset deal transfers the complete rights of use and exploitation, and licences can form part of an asset purchase and sale agreement

The two ends of the licensing scale. The sample cooperation agreement deliberately sits at the left-hand end.

The grant in the sample is narrow on purpose. The designer grants the marketer a simple, worldwide right, revocable at any time and limited in time to the duration of the agreement, to market, further develop or distribute the developments itself or through an affiliated company or business partner, and to use, exploit, reproduce, sell, publicly present or make them publicly available for download on its own homepage. The marketer may pass on corresponding simple, spatially and temporally limited rights of use as sublicences to affiliated companies and business partners for the execution of this contract. No further rights of use or exploitation exist, and rental or leasing of the developments is expressly not covered and not permitted.

The rights granted are then itemised: reproduction, dissemination, public presentation and making publicly available for repeated retrieval; reproduction in any form and sequence including recording and repeated reproduction in sound or speech, in text, image, video and multimedia form; the right to further develop, process and transfer the developments into other visual, acoustic or linguistic forms with the designer involved in each individual case, for digital or printed advertising, print advertising, self-promotion, third-party advertising or video documentation; use in databases, virtual or augmented representations, video, computer and internet games, online and access rights, and reproduction on any technical end device; commercial exploitation through manufacture and sale of goods or marketing of related services; and use in all media, alone or combined with other works, in campaigns, public performances, events, theme parks, trade fairs or internet presentations.

Now the three sentences that do the real allocation work:

Pre-existing material stays where it was the background

Advertising materials exchanged between the parties - drawings, models, illustrations, texts, photographs, videos, sketches, registered or applied-for industrial property rights, musical works, graphics, layouts and other designs - remain the intellectual property of the respective party. The developments themselves may not be changed, redesigned, further developed or edited without the designer’s prior written consent, granted case by case.

Results of joint work are pushed to one owner the foreground

The rights to the result of any joint further development are acquired exclusively by the designer at the time of its creation. The same logic is applied to data: where new information and documents, in particular new types of data or databases, arise within the cooperation out of the disclosed developments, the designer acquires all rights of ownership in them upon their creation.

The partner may not build its own position the fence

The marketer is prohibited from applying for or registering its own industrial property rights for the contractual developments without the designer’s prior written consent in the individual case, and the same applies to transferring already registered property rights to third parties. Separately, the marketer holds a licence right to use and exploit property rights registered in the designer’s name, for the duration of the agreement only.

Background, foreground and the fence. The sample never uses those words, but the three clauses together are exactly that allocation.

One more piece belongs here: if a third party asserts rights against either party, an end customer or a business partner in relation to the developments, the parties must inform each other immediately, support each other in the defence, and exchange the information each of them has.

7 · Promotion, reporting, minimum targets and money

A cooperation where you cannot see what the other side is doing is a cooperation you cannot manage. Clause 5 obliges the marketer to promote sales in the contract area, to make the greatest possible contribution to high-quality sales, and to protect the interests, the reputation and the industrial property rights of the developments and of the designer with due commercial diligence rather than damage them. It must also arrange its other products and signs so that there is no risk of confusion with the contractual developments, and must report any unauthorised third-party use of the developments as soon as it learns of it. Advertising is at the marketer’s own expense but its content, media and planned measures need prior agreement and approval, and the tonality has to be coordinated so that the advertising stays uniform.

The reporting rhythm has two speeds:

When	What has to be reported
By the third day of each calendar half-year, in writing by e-mail	The sales achieved with the contractual developments in the previous calendar half-year
Annually, within the first calendar quarter, for the past fiscal year	Sales results by individual end customers, affiliated companies and business partners; a list of concluded and current contracts; a list of interested parties and inquiries; benchmarks covering general market development, the activities of the marketer and the competition, acceptance of the developments, end-customer demand and demand estimates; a list of end customers, affiliated companies and business partners by company and address, without contact persons, together with the name of the advisor; a balance sheet and profit and loss account confirmed by the tax consultant showing revenues and profits for the developments; and the development of market shares
On request, at any time	Access to the business books, accounts and electronically stored business data relating to the business with the contractual developments

Minimum exploitation targets are agreed mutually for the coming financial year at the latest three months before it begins, taking account of exploitation and sales, the market situation and local particularities. If the parties cannot agree, the previous year’s figures apply as the target with an increase of 2.5 per cent, measured on the prices obtained per invoice amount without costs such as insurance, acceptance, export, value added tax and customs duties. The marketer must endeavour to reach the agreed targets.

The money clause, called Gratuity in this sample, gives the designer a commission on every use: 70 per cent of the price obtained on a first sale or first use, and 50 per cent of the price obtained on a secondary exploitation such as the sale of products or licences based on a contractual development. Invoicing runs through a credit note issued by the marketer in euros plus statutory value added tax, which has the effect of an invoice and falls due for payment without deduction on receipt. If there are indications that the marketer cannot perform or cannot pay, the designer may grant the marketing, development and distribution rights only against advance payment or security. Prices and conditions towards end customers, affiliated companies and business partners are the marketer’s own to set.

A drafting wrinkle worth noticing

The remuneration clause first says the designer is not entitled to any further or additional remuneration or expenses, and then continues that he may at any time demand an appropriate adjustment of remuneration or appropriate participation in an exploitation. As printed, those two sentences pull against each other. It is a good illustration of the session’s question about what could be improved: a clause that can be read two ways is worth less than a clause that is simply strict, because the disagreement it produces lands in a dispute rather than in a negotiation.

8 · Liability and its limits

Liability is not switched off in this agreement, it is layered. In three situations the parties are liable to each other under the ordinary statutory provisions: personal injury, meaning injury to life, body and health; damage caused intentionally or through gross negligence; and liability under the Product Liability Act, alongside breaches of a material contractual obligation. The same full liability applies to fraudulently concealed defects and to the absence of a quality for which a party has given a guarantee. The agreement defines material contractual obligations as those that make performance of the contract possible in the first place and on whose performance the receiving party trusts and may rely.

Outside those cases, in slight negligence, the liability of the performing party is always limited to the typical foreseeable damage. Claims for damages, on whatever legal ground, become time-barred one year after the right to market, further develop or distribute was granted. The marketer must notify the designer immediately in writing of any damage, loss or defect. And neither party is liable for non-performance or delay caused by warlike or hostile acts, sabotage, natural disasters, power, telecommunications and internet failures it did not cause, or government restrictions including the refusal or cancellation of export or other permits, while both must try to minimise the effects and take appropriate countermeasures.

9 · Confidentiality inside a cooperation

Confidentiality and trade secrets have their own chapter in these notes, so here I only record what the cooperation agreement itself does with them, because a cooperation or cloud contract has to carry its own confidentiality clause rather than rely on a separate document.

The parties undertake mutually to treat all business and trade secrets and other information and documents of the other party as strictly confidential, whether or not they are marked as confidential, and to keep strictest silence towards third parties and towards authorities. The clause names what is covered: the contractual developments and all ideas for turning them into products, purchase, wholesale and final prices, internal price lists, offers, orders, specifications, customer and business partner data, financial data, and on the technical side records, data, findings, know-how, experience, technologies, software, printouts, data carriers, drawings, descriptions, specifications, protocols, samples, models, tools and functionalities under development.

The operating rules around it are the part to copy: information may be used only for performing this contract and never for competitive purposes; inside the company it may go only to management, to people professionally bound to secrecy such as lawyers, tax advisors and the data protection officer, and to employees involved in the negotiations or the activity who have been bound in writing to the same extent; affiliated companies and business partners may receive it only where they are performing services under the agreement and must be placed under the same obligations, including for the period after their own contracts end; if a party is legally obliged to disclose, it must inform the other immediately in text form and disclose only the part it must. Material has to be stored separately and identifiably, protected against theft and unauthorised access, copied only as far as the contract requires, and not stored or transmitted outside the usual place of business without prior written consent. Breaches must be reported at once and their consequences minimised. Confidential information remains the property of the disclosing party, which may demand it back at any time, and there is no right of retention. On termination, or as soon as the information is no longer needed, everything has to be returned with all copies and deleted from the parties’ own systems without being asked. The agreement fixes a contractual penalty of EUR 50,000.00 for each breach, offset against any further damages claimed, and the duty of confidentiality survives for ten years after the contract ends.

10 · Term, termination and the unwinding

The contract starts on signature by both parties and runs for an indefinite period. Either party may terminate it with two weeks’ notice to the end of the month, and any notice of termination has to be in text form by e-mail to be effective. The right to extraordinary termination is untouched, and an important reason for it exists in particular where the objectives agreed in the preamble cannot be achieved in whole or in part, where a party repeatedly or persistently fails to perform essential contractual obligations despite two reminders, or where insolvency proceedings or comparable proceedings are applied for, opened, or refused for lack of assets.

The unwinding is the part people forget to negotiate and then regret:

Notice arrivesboth parties may tell affiliated companies, end customers and business partners about the coming end

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Within ten calendar daysthe marketer hands over a list of all contracts not yet fully fulfilled, naming the counterparties and the individual contract details

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On terminationall marketing, development and distribution rights expire, the authorised-dealer designation stops, and the rights revert automatically to the designer together with all derived rights such as end-customer licences and sublicences

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Afterwardseveryone deriving rights through the marketer must stop using the developments, the registered rights and the digital and physical images; copies are handed over or permanently deleted; long-term licence contracts are terminated as soon as possible; and all materials go back free of charge, with no right of retention

Exit as a designed sequence. Notice, disclosure of the open contracts, automatic reversion of every right including the derived ones, then physical and digital cleanup.

11 · Concluding provisions, governing law and jurisdiction

The closing clause carries the plumbing that makes the rest enforceable. There are no oral side agreements; amendments and supplements need written form, and so does any waiver of the written-form requirement. The marketer may set off, or exercise a lien or right of retention, only with claims that are undisputed or legally established, and may not transfer or assign its rights and obligations to third parties without the designer’s prior written consent. A severability clause keeps the rest of the contract valid if one provision is invalid or leaves a gap, and obliges the parties to agree a valid provision matching the economic intention. The marketer maintains product liability, operating liability and liability insurance at its own expense, to the usual extent and on the usual conditions.

The last two provisions are the ones to check first in any cross-border cooperation. The contract and the agreements made under it are subject to the law of the Federal Republic of Germany, and the application of the UN Convention on Contracts for the International Sale of Goods is excluded. The place of performance for all services and the place of jurisdiction for all disputes arising from or in connection with the contract is Hamburg. Finally, the attachment list names Annex 1, the list of the designer’s current developments, which is what the whole framework hangs on.

12 · What a service agreement adds

The session’s title puts non-disclosure, cooperation and service agreements together, and the sample shows why: the moment one party performs for the other, a set of clauses appears that a pure licence or a pure sale does not need.

A described performance what is actually owed

• An itemised duty list rather than a vague promise to cooperate
• Named deliverables: documentation, installation, permits, warning notices, training, maintenance
• A route for extra services on demand against separate remuneration

A standard of care how well it must be done

• Due commercial diligence, and a duty to protect rather than damage the other side’s reputation and rights
• Freedom for the provider to organise the work, paired with approval rights on what reaches the market

Measurement and money how performance is checked and paid

• Half-yearly and annual reporting, plus access to books and stored business data
• Minimum targets with a fallback formula if the parties cannot agree
• Commission rates, the invoicing route, and security if solvency looks doubtful

Risk around the performance who carries what

• Layered liability with full liability for the serious cases and a cap on typical foreseeable damage otherwise
• A time bar on damages claims
• A force majeure list, and insurance standing behind the provider’s exposure

13 · Cloud agreements: the questions the session puts to you

The last hour of the day is on cloud agreements, and it is set as an exercise rather than a lecture. The task given to the group is precise, and it is really a method:

1. Read and analyse the cloud agreements themselves. Not a summary of them, the actual documents.

2. Ask which clauses are typical for a cloud agreement, and draft a table of contents from that.

3. Compare that contents list against the cooperation agreement contents from the first session - the eleven-clause map in section 2 above.

4. Ask two questions of the comparison. Do you miss clauses? And are the clauses in the agreements fair for both parties?

5. Make suggestions for appropriate additions to the contract text and present them.

That comparison is the whole point, and it is worth doing in your head now. Run the cooperation-agreement checklist against a cloud contract and the differences jump out. The grant of rights in the cooperation agreement is revocable at any time and expires with the contract, with everything reverting automatically including sublicences - so ask what the equivalent looks like in a cloud contract, and in which direction the rights actually run. The confidentiality clause obliges return and deletion of everything on termination, with no right of retention - so ask what the cloud contract says about getting your material back. The cooperation agreement makes involving a business partner subject to consent one month in advance, with a right to refuse without reasons - so ask who the provider is allowed to bring in behind it. The cooperation agreement caps liability at typical foreseeable damage in slight negligence but keeps full liability for the serious cases - so ask where the cloud contract’s cap sits. And the cooperation agreement names one governing law and one place of jurisdiction - so ask which law and which forum the cloud contract picks, and whether you could realistically litigate there.

Caution

What I have deliberately not written down. The session deck sets cloud agreements as a group exercise and does not itself contain an answer key. There is nothing in the deck on availability figures or service-level definitions, on general security obligations for a running cloud service, or on data-protection processing terms, so I have invented none of those here; take them from the actual contract in front of you and from the data-protection chapters of this course. What the deck does point at, the Data Act, turns out to answer a large part of the lock-in and exit half of the question with binding rules, and those are set out in sections 15 and 16 below.

14 · A real cloud clause, read closely

The session hands one genuine clause to the second group, taken from a software-as-a-service agreement and headed as a licence by the customer. It is the single most concrete thing in the whole day on why a cloud contract has to be read rather than skimmed, because it is short, it looks harmless, and it does two quite different things.

Paraphrased, it says this. For as long as the subscription runs, the customer grants the provider and the companies in its group a worldwide, cost-free licence to host, copy, transmit, display and use the customer’s data, for the purpose of providing the services and of developing the services and the software underneath them. And once the subscription term has expired, the provider keeps a perpetual, irrevocable, transferable and sub-licensable right to use that customer data in aggregated and anonymous form, for statistical analysis and for developing the services and the underlying software.

Read that a second time, because the first sentence and the second sentence are not the same deal.

Grant one, during the term while you are paying

• Who gives it: the customer. It is your grant, not the provider’s, which is why it is easy to skip when you are reading a document you think is about what you are buying
• Who receives it: the provider and its affiliates, so the licence spreads across a corporate group you have not met and cannot see
• Reach: worldwide and cost-free, covering hosting, copying, transmitting, displaying and using the data
• Purpose: providing the services, and developing the services and the underlying software

Grant two, after expiry when you have stopped paying

• Trigger: expiry of the subscription term, so it starts exactly where your commercial relationship ends
• Duration and strength: perpetual and irrevocable
• Onward movement: transferable and sub-licensable
• Subject matter: your data in aggregated and anonymous form
• Purpose: statistical analysis and development of the services and the software

Two grants in one clause. The second one is not a continuation of the first; it is a separate right that begins when the contract ends.

Why providing and developing are not the same word. Providing the services is what you are paying for. The provider needs to host, copy, transmit and display your data simply to run the thing, and no sensible customer objects to that. Developing the services and the underlying software is something else entirely: it is the provider improving its own product, at no charge, using material you generated. The improvement is not delivered to you as a deliverable and it does not belong to you; it becomes an asset on the provider’s side that it can sell to everyone, including the competitors you share a market with. Two words joined by an “and” have quietly moved your operational data from being an input to a service into being an input to somebody else’s research and development programme. This is the same problem the cooperation agreement solves in section 6 above by separating what may be used to perform the contract from what may be used for the partner’s own purposes, and by pushing the results of joint work to a named owner at the moment of creation. The cloud clause simply does not draw that line.

Why the four adjectives in the second grant should stop you. Each one removes a different escape route, and together they are the mirror image of the cooperation agreement’s grant, which was simple, revocable at any time, limited to the term and automatically reverting on termination.

The word	What it does	Why it matters to you
Perpetual	The right has no end date	Ending the subscription ends the service, not the provider’s use of what your subscription produced
Irrevocable	You cannot take it back	Not even where you are terminating because the provider has breached the contract. The one lever a customer normally has is switched off in advance
Transferable	The right can be handed to someone else	It can travel with the business in a sale or an asset deal, so the eventual holder may be a company you would never have contracted with, including a direct competitor
Sub-licensable	The holder can grant it downwards	Your material can reach parties at the end of a chain you cannot see, cannot audit and have no contract with

What aggregated and anonymous does and does not protect. Those two words are doing an enormous amount of reassurance work for their size, and the clause defines neither. Aggregation is a spectrum, not a state: a statistic over ten thousand customers tells nobody anything, while a statistic over the three companies in a niche can be read straight back to the three of them. Nothing in the wording fixes a minimum cohort size, a method, an audit right, or any way for you to verify what was done. Whether a data set is genuinely anonymous, rather than merely stripped of the obvious identifiers and still capable of being linked back, is exactly the question the data-protection chapters of this course deal with, and it is a question about the data, not about the adjective used in the contract.

There is a second gap that anonymity does not close at all. Anonymisation is aimed at protecting people. It does nothing about commercial sensitivity. An aggregated statistic can still expose your production volumes, your seasonal pattern, your failure rates or your throughput per site, and none of that stops being commercially valuable because no individual can be identified in it. That is the point where this clause meets the trade-secret material in the companion chapter: information you have taken reasonable steps to protect internally can leave through a contract you signed, in a form nobody thought to classify.

What a customer would try to negotiate. The deck’s own Group 3 questions are the right frame here: are the clauses fair for both parties, and do you miss clauses?

Split the two purposes and price them separately: providing the service is included, developing the provider’s product is notCut the post-term grant entirely, or at minimum strike transferable and sub-licensable so the right cannot leave the company you choseMake it revocable, or time-limited, so that termination for the provider’s breach also ends the provider’s continuing useDefine aggregation with a stated minimum cohort and a method, rather than leaving it to the provider’s judgementCarve out commercially sensitive material and identified trade secrets, whatever form the output takesAdd what is missing: verification or audit of what was aggregated, and a deletion obligation that actually reaches derived data sets

Does the Data Act help here? Partly, and it is worth being precise about how far. The unfair-terms rules in section 15 below apply to a term about access to and use of data that one enterprise has unilaterally imposed on another, which is the normal position for a standard cloud agreement you were handed and could not change. Against that list, the term to test is the one presumed unfair where it lets the imposing party access and use the other party’s data in a way significantly detrimental to that party’s legitimate interests, in particular where the data are commercially sensitive or protected by trade secrets or intellectual property rights. Whether this clause crosses that line depends on the facts, on whether it really was unilaterally imposed, and on the carve-out for terms defining the main subject matter of the contract, so the honest answer is that the list gives you a strong argument to open with, not an automatic result. The switching rules in section 16 are a weaker fit: the erasure guarantee there is written as full erasure of exportable data and digital assets generated directly by the customer or relating to the customer directly, and the question you have to put to the provider is whether an aggregated, anonymised derivative is caught by that wording at all. If the answer is no, then the second grant is designed to survive your exit, and no amount of exit machinery elsewhere in the contract will reach it.

Tip

The habit this clause teaches. When a contract grants a right, read four things in order and never fewer: who grants it, to whom it runs including affiliates and sublicensees, for how long it lasts relative to the contract, and for which purposes. This clause fails on all four at once, and it does it inside three lines of ordinary-looking text near the back of a document.

15 · The Data Act: what it covers and the contract terms it polices

The Data Act appears in the session as part of the second group task, and it appears as an assignment rather than as taught content: read and analyse the Data Act, and answer what is it about and what kind of clauses should be made in agreements with respect to data. The task points at the European Commission’s European data strategy pages and its Data Act policy pages. Working from the legislation itself, this is Regulation (EU) 2023/2854, done at Strasbourg on 13 December 2023, which applies from 12 September 2025.

Its own statement of subject matter lists harmonised rules on: making product data and related service data available to the user of a connected product or related service; making data available by data holders to data recipients; making data available to public sector bodies, the Commission, the European Central Bank and Union bodies where there is an exceptional need in the public interest; facilitating switching between data processing services; safeguards against unlawful third-party access to non-personal data; and the development of interoperability standards. It covers personal and non-personal data, and it explicitly does not displace data-protection law: where it conflicts with Union or national law on personal data or privacy, that law prevails.

Three parts of it bear directly on the contracts in this chapter.

Connected products and related services the data-access chapter

Connected products and related services must be designed so that product and related service data, with the metadata needed to interpret them, are by default easily, securely and free of charge accessible to the user, in a comprehensive, structured, commonly used and machine-readable format. Before the contract is concluded, the user has to be told the type, format and estimated volume of data, whether it is generated continuously and in real time, whether it is stored on the device or on a remote server and for how long, and how the user can access, retrieve or erase it. Where data cannot be read straight off the product, the data holder has to make readily available data accessible without undue delay, of the same quality it has itself.

What the parties may then do with that data the clauses this forces into your agreements

A data holder may use readily available non-personal data only on the basis of a contract with the user, and may not use it to derive insights about the user’s economic situation, assets or production methods in a way that could undermine the user’s commercial position. It may not pass non-personal product data to third parties for anything other than performing its contract with the user, and where it does pass data on it must bind those third parties contractually not to share it further. The user, for its part, may not use the data to build a competing connected product, may not share it with a third party for that purpose, and may not use coercion or exploit gaps in the data holder’s protective infrastructure. The user also has a right to have the data shared with a third party of its choice.

Trade secrets inside shared data where this chapter meets the companion one

Trade secrets have to be preserved and may be disclosed only where the data holder and the user first take all necessary measures to keep them confidential, especially towards third parties. The trade secret holder must identify which data are protected, including in the metadata, and agree proportionate technical and organisational measures with the user, the Regulation naming model contractual terms, confidentiality agreements, strict access protocols, technical standards and codes of conduct. If no such measures are agreed or the user undermines them, the data holder may withhold or suspend sharing, in writing and with reasons. Separately, an obligation to make data available does not as such oblige anyone to disclose trade secrets.

The Data Act turns data handling into drafting work: who may access, on what terms, for which purposes, and with which protection for what is secret.

Where a data holder is obliged to make data available to a data recipient, it must agree the arrangements under fair, reasonable and non-discriminatory terms and in a transparent manner, must not discriminate between comparable categories of recipients including its own partner or linked enterprises, and must not make data available, including on an exclusive basis, unless the user asked for it. Any compensation agreed between businesses has to be non-discriminatory and reasonable, and may include a margin.

Then comes the chapter that answers the session’s second question about whether the clauses in a contract are fair for both parties. A contractual term about access to and use of data, or about liability and remedies for breach or termination of data-related obligations, which one enterprise has unilaterally imposed on another, is not binding if it is unfair. A term counts as unilaterally imposed where one side supplied it and the other could not influence its content despite trying to negotiate, and the side that supplied it carries the burden of proving otherwise and cannot itself argue the term is unfair. Unfairness means the term grossly deviates from good commercial practice in data access and use, contrary to good faith and fair dealing.

The term always counts as unfair if it	The term is presumed unfair if it
Excludes or limits the liability of the imposing party for intentional acts or gross negligence	Inappropriately limits remedies or liability for breach, or extends the liability of the party the term was imposed on
Excludes the other party’s remedies for non-performance, or the imposing party’s liability for breach	Lets the imposing party access and use the other party’s data in a way significantly detrimental to its legitimate interests, especially commercially sensitive data or data protected by trade secrets or IP rights
Gives the imposing party the exclusive right to decide whether the data supplied conform to the contract, or to interpret any contractual term	Stops the other party from using the data it provided or generated during the contract, or limits that use so far that it cannot exploit the value of the data adequately
	Stops the other party terminating within a reasonable period, or obtaining a copy of the data it provided or generated, during the contract or within a reasonable period afterwards
	Lets the imposing party terminate at unreasonably short notice given the realistic possibility of switching to a comparable service, except on serious grounds
	Lets the imposing party substantially change the price or another substantive condition about the nature, format, quality or quantity of the data, where the contract states no valid reason and gives no right to terminate

An unfair term that can be severed leaves the rest of the contract binding, the rules do not touch terms defining the main subject matter or the adequacy of the price against the data supplied, and the parties cannot contract out of this chapter. On timing, it applies to contracts concluded after 12 September 2025, and from 12 September 2027 to older contracts that run for an indefinite period or are due to expire at least ten years from 11 January 2024.

16 · Switching between data processing services: the answer to cloud lock-in

This is the part of the Data Act written for exactly the problem a cloud agreement creates. A data processing service is defined as a digital service giving a customer ubiquitous, on-demand network access to a shared pool of configurable, scalable and elastic computing resources that can be rapidly provisioned and released with minimal management effort. Switching is the process of moving from one such service to another of the same service type, or to on-premises ICT infrastructure the customer owns, rents or leases, including extracting, transforming and uploading the data.

Providers must enable customers to switch, and must not impose, and must remove, pre-commercial, commercial, technical, contractual and organisational obstacles that stop a customer terminating after the notice period and a completed switch, signing with a different provider of the same service type, porting its exportable data and digital assets elsewhere including after a free-tier offering, achieving functional equivalence in the new environment, or unbundling infrastructure services from the provider’s other services where that is technically feasible.

The vocabulary is worth fixing, because the contract clauses hang off it:

Exportable data: input and output data including metadata generated or cogenerated by the customer’s use of the service, excluding assets or data protected by IP rights or constituting a trade secret of the provider or a third partyDigital assets: elements in digital form, including applications, that the customer has the right to use independently of the contract it is leavingFunctional equivalence: re-establishing a minimum level of functionality in the new service so that it delivers a materially comparable outcome for the same input, for the shared features supplied under the contractSwitching charges: charges other than standard service fees and early termination penalties imposed for the switching actions, including data egress charges for pulling your data out across the network

The Regulation then does something unusual: it dictates the contents of the contract. The rights of the customer and the obligations of the provider on switching must be set out in a written contract, which the provider has to make available before signature in a form the customer can store and reproduce. That contract must contain at least the following.

A maximum notice period to start the switchit may not exceed two months, and the customer then tells the provider whether it is moving to another provider, moving to its own infrastructure, or simply erasing its exportable data and digital assets

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A transitional period of at most 30 calendar daysduring which the contract stays in force and the provider must give reasonable assistance, act with due care to maintain business continuity and keep providing the functions, flag known continuity risks, and keep security high throughout the transfer

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A retrieval period of at least 30 calendar daysrunning from the end of the transitional period, followed by a guaranteed full erasure of all exportable data and digital assets generated by or relating directly to the customer

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Termination, and the chargesthe contract counts as terminated on successful completion of the switch, or at the end of the notice period where the customer only wants erasure, and the customer must be notified

The switching timetable the contract has to contain. Two months to give notice, thirty days to move, thirty days to retrieve, then erasure.

Alongside the timetable, the contract must contain an obligation on the provider to support the customer’s exit strategy, including by providing all relevant information; an exhaustive specification of all categories of data and digital assets that can be ported, covering at a minimum all exportable data; an equally exhaustive specification of the categories internal to the provider’s own service that are exempted because of a risk of breaching the provider’s trade secrets, provided those exemptions do not impede or delay the switch; and the switching charges. If the thirty-day transitional period is technically unfeasible, the provider must say so within 14 working days of the switching request, justify the unfeasibility and offer an alternative period of no more than seven months, with continuity maintained throughout, and the customer separately has the right to extend the transitional period once, for a period it considers appropriate for its own purposes.

The money side has a hard deadline. From 12 January 2027 providers may impose no switching charges at all. Between 11 January 2024 and 12 January 2027 they may charge reduced switching charges that must not exceed the costs directly linked to the switch, and before signing they must tell the prospective customer clearly about standard service fees, early termination penalties and any reduced switching charges, and flag services where switching is highly complex, costly or impossible without significant interference in the data, digital assets or architecture.

Three further duties fill the gaps a cloud contract usually leaves open:

• Information. The provider must supply information on the available switching and porting procedures, methods and formats, together with known restrictions and technical limitations, and must point to an up-to-date online register it hosts, giving the data structures, data formats, standards and open interoperability specifications in which exportable data are available.
• Good faith. Everyone involved, including the destination provider, must cooperate in good faith to make the switch effective, transfer the data in time and keep the service running.
• Transparency on where the data sits. Providers must publish on their websites, and keep current, the jurisdiction to which the ICT infrastructure used for each of their services is subject, and a general description of the technical, organisational and contractual measures they have taken to prevent international governmental access to or transfer of non-personal data held in the Union where that would conflict with Union or Member State law. Those websites must be listed in the contracts for all their services.

On the technical side, infrastructure providers must take all reasonable measures in their power to help the customer reach functional equivalence after switching, by providing capabilities, information, documentation, technical support and where appropriate the necessary tools. Other providers must make open interfaces available free of charge to all customers and to destination providers, with enough information to build software that talks to the service for portability and interoperability, must comply with common specifications or harmonised interoperability standards once published, and where no such standards exist must, on request, export all exportable data in a structured, commonly used and machine-readable format. The limit is stated too: no provider is required to develop new technologies or services, to disclose or transfer digital assets protected by IP rights or constituting a trade secret, or to compromise security and integrity of the service.

Finally, the exceptions. The obligations on functional equivalence, on switching charges and on the technical measures do not apply to services whose main features have been custom-built for one individual customer, or all of whose components were developed for that customer, where they are not offered at broad commercial scale through the provider’s service catalogue; and the whole switching chapter does not apply to non-production versions provided for testing and evaluation for a limited time. In both cases the provider has to tell the prospective customer, before the contract is concluded, which of these obligations will not apply.

Reading this back onto the cooperation agreement

Notice how closely the switching rules track the sample cooperation agreement’s exit clause: an identified list of what has to be handed over, a fixed window, a duty to keep performing while the unwinding happens, and a guaranteed deletion at the end with no ability to sit on the other side’s material. The cooperation agreement reached that result by negotiation between two parties of roughly equal bargaining power. For cloud services, where the contract arrives as a take-it-or-leave-it document, the Regulation writes the same clauses in for you.

Worked example

Two companies agree a joint development under a framework cooperation agreement: Alpha Sensorik, which makes measurement hardware, and Beta Engineering, an engineering services firm. Together they will build a wear-monitoring unit for lift brakes. The framework is signed once; the lift-brake project comes in underneath it through a declaration and a development description, exactly as in section 1.

What each side brings in, and what appears during the project. Alpha brings a registered design for its sensor housing plus a patented sensor element. Beta brings a calibration software library it has been developing for years for other customers, and its test rig. During the project the two teams jointly produce a wear-prediction algorithm, a body of measurement data and the database holding it, an improved version of Beta’s calibration library, and a set of brochure photographs and drawings. Beta also wants to file a patent on the algorithm.

Item	Background or foreground	Ownership decision	Licence back and field of use	Reasoning
Alpha’s registered design and patented sensor element	Background	Stays with Alpha, unchanged	Beta gets a simple, worldwide, revocable licence limited in time to the term, to use, further develop and distribute it in the lift-brake unit only	Follows the sample’s grant: simple rather than exclusive, revocable at any time, limited to the duration. Alpha keeps the right to exploit it elsewhere and to appoint other partners
Beta’s calibration software library	Background	Stays with Beta	Alpha gets a simple licence to use it as embedded in the joint unit, with the right to sublicense only to named business partners for the execution of the contract	Beta’s library is its livelihood on other projects. A field-of-use limit to the lift-brake unit keeps Alpha out of Beta’s other markets
Beta’s test rig	Background, and never leaves Beta	Stays with Beta, with no licence at all	None. Access only, on Beta’s premises, during the project	A tool used to make the result is not part of the result. Say so, or it gets pulled into the joint-work clause by accident
The wear-prediction algorithm	Foreground, genuinely joint	Named to one owner at the moment of creation, say Alpha, following the sample’s rule that rights to the result of joint further development are acquired exclusively by one party on creation	Beta gets a perpetual, non-exclusive licence back to use the algorithm outside lift brakes, for example in escalator or crane monitoring	Joint ownership sounds fair and behaves badly: neither side can license without the other, so the asset freezes. One owner plus a licence back with a field split gives both sides something they can actually use
The measurement data and the database built from it	Foreground data	Allocated to one party on creation, mirroring the sample’s clause that new data and databases arising in the cooperation belong to one named party from the moment they arise	The other party gets a licence to use the data for validating and improving its own contribution, and the framework’s return-and-delete duty applies at the end	Data is the item people forget to allocate, and it is exactly the point the Data Act task raises. Allocate it in the same sentence as the rest of the foreground, not in an annex
Improvements Beta makes to its own library while working	Foreground on background	Stays with Beta as part of its library	Alpha gets the improvement automatically inside its existing licence, so the joint unit keeps working	Splitting an improvement away from the library it belongs to creates a component nobody can maintain
The brochure photographs, drawings and layouts each side supplies	Background, and often overlooked	Remain the intellectual property of the party that produced them, per the sample’s advertising-materials clause	Cross-licensed for the joint campaign only, and advertising content, media and measures need the other side’s prior approval	Marketing material is the most-copied and least-negotiated category in any cooperation
Beta’s proposed patent filing on the algorithm	Foreground, and the flashpoint	Not permitted unilaterally. Following the sample, neither party may apply for or register its own industrial property rights on the contractual developments, or transfer registered rights to third parties, without the other’s prior written consent in the individual case	Filing happens in the named owner’s name, at agreed cost sharing, with the other party named and given its licence back	Without this fence, the partner can convert a joint result into a private monopoly and then license it back to you
The end-customer sublicences Beta grants	Derived rights	Exist only as sublicences under the framework grant	They expire automatically when the framework ends and revert to the owner, and Beta must terminate long-term end-customer contracts as soon as possible after termination	The reversion clause is only worth something if it reaches the rights the partner passed on to third parties

The reasoning in one line. Background stays where it came from and is lent under a licence limited in space, time and content. Foreground is pushed to a single named owner at the instant it is created, and the other side is made whole with a licence back and a field-of-use split. Everything derived falls away when the contract does.

Apply it to your project

1. Decide first whether you need a container or a single deal. One object, one price, once, means a purchase contract. A stream of developments, or a relationship that will produce work you cannot describe yet, means a framework agreement with declarations underneath it.

2. Write the preamble as a boundary, not as flattery. Say what each party does, what is covered and, critically, what is not covered. The sample’s line separating the designer’s spare-time inventions from his employment with the same company is the model.

3. List what already exists in an annex and make the annex part of the contract. Then define the mechanism for future items: a declaration plus a description, which becomes an integral part of the contract when the other side accepts.

4. Allocate every decision type before you need it. Which choices need consent, which need approval, which one party simply instructs, and which only have to be reported. If you would rather have a steering body and an escalation route than a chain of vetoes, write them in, because the sample has none.

5. Split the IP three ways in writing. Background stays with its owner and is licensed narrowly; foreground goes to one named owner at the moment of creation with a licence back; and neither side may register its own rights over the shared subject matter without the other’s written consent in the individual case. Do the same sentence for data and databases.

6. Say how you will see what is happening. Fix the reporting rhythm, the contents of each report, and a right of access to books and stored data. A cooperation you cannot audit is one you cannot enforce.

7. Make the confidentiality clause carry its own weight. It has to bind regardless of marking, cover the people and affiliates who will actually see the material, oblige return and deletion, exclude any right of retention, and state how long it survives.

8. Design the exit before you sign the entry. Notice period and form, the reasons for extraordinary termination, the list of open contracts, automatic reversion of all rights including derived ones, and the physical and digital cleanup.

9. For a cloud contract, run the same eleven-clause map down the page. Mark every heading the provider’s document does not have, then ask the session’s two questions on each: is a clause missing, and is what is there fair to both sides. Take the gaps to the negotiation as proposed additions.

10. Check the switching clauses before you check anything else. Is there a written statement of your switching rights? Is the notice period two months or less, is the transitional period thirty days, is there a retrieval period of at least thirty days followed by guaranteed erasure? Is there an exhaustive list of what can be ported and of what the provider is carving out as its own trade secrets? Are switching charges stated, and are they going to zero? Is there a duty to support your exit strategy? A missing item there is the whole lock-in problem in one line.

11. Ask where the infrastructure sits and who could reach it. The provider has to publish the jurisdiction its ICT infrastructure for each service is subject to, and what it does to prevent international governmental access to non-personal data held in the Union, with that website named in the contract. Read it before you sign, not after.

12. Test the data clauses against the unfair-terms list. If the term was handed to you and you could not change it despite trying, then terms excluding liability for intent or gross negligence, letting the provider judge conformity or interpret the contract, blocking you from using or copying your own data, or letting the provider change price or data quality at will are the ones to challenge - and you cannot be asked to contract out of that protection.

Key terms

Term	What it means in plain words
Framework cooperation agreement	A standing contract that fixes the terms once, so that individual pieces of work can be added later without renegotiating everything
Declaration with development description	The short document that brings a new development under the framework; it becomes part of the contract when the other side accepts it
Direct business reservation	The owner’s right to serve its own existing or newly acquired customers directly, with no commission owed to the partner, because there is no exclusive marketing right
Simple licence	A right of use only; the licensor keeps its own exploitation and may grant the same right to others
Exclusive licence	The complete transfer of ownership, which regularly shuts the original holder out of its own use and exploitation
Background material	What each party already had, which stays that party’s property and is only lent under the agreement
Foreground result	What the cooperation creates, which the sample assigns exclusively to one named party at the moment of creation
Minimum exploitation target	The agreed level of use for the coming year, with a fallback of the previous year’s figures plus 2.5 per cent if no agreement is reached
Gratuity clause	The remuneration clause; here a commission of 70 per cent on first use and 50 per cent on secondary exploitation, invoiced by credit note
Extraordinary termination	Termination for an important reason, such as unachievable objectives, repeated breach after two reminders, or insolvency proceedings
Reversion of rights	The automatic return of all granted rights, including derived end-customer licences and sublicences, when the contract ends
Place of jurisdiction	The agreed forum for disputes; in this sample Hamburg, alongside German law and the exclusion of the CISG
Data processing service	The Data Act’s term for a cloud service: on-demand network access to a shared pool of configurable, scalable and elastic computing resources, rapidly provisioned and released with minimal management effort
Switching	Moving from one data processing service to another of the same service type, or to your own on-premises infrastructure, including extracting, transforming and uploading the data
Exportable data	Input and output data with metadata generated by your use of the service, excluding assets protected by the provider’s or a third party’s IP rights or trade secrets
Functional equivalence	Getting a minimum level of functionality back in the new service, so the same input produces a materially comparable outcome for the features you had
Switching charges	Charges other than standard fees and early termination penalties imposed for the switching actions, including data egress charges, which fall away entirely from 12 January 2027
Unfair contractual term	A data term unilaterally imposed by one enterprise on another that grossly deviates from good commercial practice contrary to good faith and fair dealing; it is simply not binding

Test yourself

1. What does a framework cooperation agreement do that a series of separate contracts does not, and by what mechanism does a future development get pulled under it?
2. Name the eleven numbered clauses of the sample cooperation agreement in order.
3. How does the sample allocate pre-existing material, the results of joint further development, and new data or databases? Name the three rules.
4. The partner wants to register its own patent on a jointly developed result. What does the sample say, and why is that clause there?
5. Describe the liability structure of the agreement, and then describe what happens step by step when the contract is terminated.
6. What exactly does the session ask you to do with cloud agreements, and how does the cooperation-agreement clause map help you do it?
7. Set out the switching timetable the Data Act requires a cloud contract to contain, and say what happens to switching charges over time.
8. When is a data-related contractual term between two enterprises not binding, and name three terms that always count as unfair.
9. The session’s customer-data licence clause contains two separate grants. Set them both out, explain why developing is wider than providing, and say what aggregated and anonymous does not protect.

Answers

1. It fixes the standing terms - rights, duties, reporting, targets, money, liability, confidentiality, termination, governing law - once, so that a stream of developments can be handled without renegotiating them each time. Existing developments are listed in Annex 1, which is made part of the contract. A future development is brought in by a separate declaration together with a development description; when the marketer accepts the offered marketing, further development or distribution, that declaration becomes an integral part of the contract and all the framework terms apply to it.
2. Preamble; subject matter and territory of the contract; duties of the MARKETER; granting of rights to the MARKETER; promotion and reporting obligations of the MARKETER; minimum exploitation targets; gratuity; liability; non-disclosure; duration and termination of contract; concluding provisions. Plus the attachment list, Annex 1.
3. Advertising materials and similar items exchanged between the parties remain the intellectual property of the respective party. The rights to the result of any joint further development are acquired exclusively by the designer at the time of its creation, and the developments may not be changed or further developed at all without prior written consent in the individual case. Where new data or databases arise in the cooperation out of the disclosed developments, the designer acquires all rights of ownership in them upon their creation, and the return-and-delete duty at the end expressly covers stored data and databases.
4. The marketer is prohibited from applying for or registering its own industrial property rights for the contractual developments without the designer’s prior written consent granted for the individual case, and the same applies to transferring already registered rights to third parties. Without it, the partner could turn shared work into a private right and license it back to the originator, or sell it on.
5. Liability is layered: full statutory liability for injury to life, body and health, for intent and gross negligence, under the Product Liability Act, for breach of a material contractual obligation, for fraudulently concealed defects and for guaranteed qualities; in slight negligence it is limited to the typical foreseeable damage; damages claims are time-barred one year after the rights were granted; and a force majeure list excludes liability for war, sabotage, natural disasters, uncaused power, telecoms and internet failures, and government restrictions. On termination: notice in text form with two weeks to month end, or extraordinary termination for an important reason; both sides may inform customers and partners; within ten calendar days the marketer supplies the list of contracts not yet fully performed; all marketing, development and distribution rights expire and revert automatically, together with derived rights such as end-customer licences and sublicences; everyone deriving rights through the marketer must stop using the developments and the registered rights; copies are handed over or permanently deleted; long-term contracts are terminated as soon as possible; and all materials are returned free of charge with no right of retention.
6. Read and analyse actual cloud agreements, work out which clauses are typical for one, draft a table of contents, compare it to the cooperation agreement contents from the first session, ask whether clauses are missing and whether what is there is fair to both parties, then propose additions. The eleven-clause map is the comparison list: run it down the provider’s document and every heading it lacks is a candidate gap.
7. The switching rights and obligations must be in a written contract made available before signature in a storable form. It must set a maximum notice period of no more than two months to start the switch, then a transitional period of at most 30 calendar days during which the contract stays in force and the provider gives reasonable assistance, maintains business continuity, flags known continuity risks and keeps security high; then a retrieval period of at least 30 calendar days, after which all the customer’s exportable data and digital assets are fully erased. It must also list exhaustively what can be ported and what is exempted as the provider’s trade secrets, oblige the provider to support the exit strategy, and state the switching charges. If thirty days is technically unfeasible the provider must say so within 14 working days, justify it and offer an alternative period of at most seven months, and the customer may extend the transitional period once. On charges: reduced charges not exceeding the directly linked costs are allowed from 11 January 2024 to 12 January 2027, and from 12 January 2027 no switching charges may be imposed at all.
8. A term about access to and use of data, or about liability and remedies for breach or termination of data obligations, that one enterprise unilaterally imposed on another is not binding if it is unfair, meaning it grossly deviates from good commercial practice contrary to good faith and fair dealing. A term is unilaterally imposed where one side supplied it and the other could not influence it despite trying, and that side bears the burden of proving otherwise. Always unfair: excluding or limiting the imposing party’s liability for intent or gross negligence; excluding the other side’s remedies for non-performance or the imposing party’s liability for breach; giving the imposing party the exclusive right to decide whether the data conform to the contract or to interpret any term. The parties cannot contract out of these rules.
9. Grant one, during the subscription term: the customer grants the provider and its affiliates a worldwide, cost-free licence to host, copy, transmit, display and use customer data, for the purpose of providing the services and developing the services and the underlying software. Grant two, on expiry of the term: the provider keeps a perpetual, irrevocable, transferable and sub-licensable right to use that data in aggregated and anonymous form, for statistical analysis and development. Providing is what you paid for; developing is the provider improving its own product for free using your material, and the improvement stays with the provider to sell to anyone, competitors included. Aggregated and anonymous is undefined in the clause, with no minimum cohort, no method, no audit and no verification; small cohorts can be read back to their members; and anonymisation aims at protecting people, so it does nothing about commercial sensitivity such as your volumes, seasonality, failure rates or throughput.

Revision summary

Tip

The one-minute recap

• A framework cooperation agreement is a container for future deals. Existing items sit in Annex 1; future ones enter by a declaration plus a development description that becomes part of the contract on acceptance.
• Its eleven clauses: preamble, subject matter and territory, duties of the marketer, granting of rights, promotion and reporting, minimum exploitation targets, gratuity, liability, non-disclosure, duration and termination, concluding provisions, plus the attachment list.
• The preamble draws the boundary - in the sample, spare-time inventions of a person who is also an employee of the other party - and sets objectives whose failure later justifies extraordinary termination.
• Governance is by allocated decision rights, not by a committee: consent for business partners and IP filings, approval for advertising, instruction on sales policy, information through reports. The sample has no steering body or deadlock rule.
• The grant is deliberately weak: simple, worldwide, revocable at any time, limited to the term, with sublicences only to affiliates and business partners for performing the contract, and rental and leasing excluded.
• Three IP rules to memorise: exchanged materials remain each party’s property; results of joint further development belong exclusively to one named party at creation; new data and databases are allocated the same way, and neither side may register its own rights without written consent in the individual case.
• Reporting runs half-yearly on sales and annually on results, contracts, inquiries, benchmarks, customer lists, tax-consultant-confirmed accounts and market shares, plus access to books on request. Minimum targets default to last year’s figures plus 2.5 per cent. Commission is 70 per cent on first use and 50 per cent on secondary exploitation.
• Liability is full for the serious cases, capped at typical foreseeable damage in slight negligence, time-barred after one year, with a force majeure list.
• Confidentiality binds whether or not material is marked, extends to affiliates and partners on the same terms, ends in return and deletion with no right of retention, carries a EUR 50,000.00 penalty per breach and survives ten years.
• Exit is designed: two weeks’ notice to month end in text form, extraordinary termination for unachievable objectives, repeated breach or insolvency, a ten-day list of open contracts, automatic reversion of all rights including sublicences, then cleanup. Governing law is German, the CISG is excluded, and the place of performance and jurisdiction is Hamburg.
• A service agreement adds the described performance, the standard of care, measurement and payment, and the risk allocation around performing.
• Cloud agreements are set as an exercise: read the real contracts, list the typical clauses, compare against the cooperation-agreement map, ask what is missing and whether it is fair to both sides, and propose additions.
• The customer-data licence clause from the session is the worked warning. During the term the customer grants the provider and its affiliates a worldwide, cost-free licence to host, copy, transmit, display and use its data for providing and developing the services. After expiry the provider keeps a perpetual, irrevocable, transferable and sub-licensable right to use that data in aggregated and anonymous form. Developing is far wider than providing; the four adjectives are the exact opposite of the cooperation agreement’s revocable, term-limited, automatically reverting grant; and aggregated and anonymous is undefined, protects people rather than commercial sensitivity, and may sit outside the exit machinery altogether. Read every grant for who, to whom, how long, for what purposes.
• The Data Act, Regulation (EU) 2023/2854, applies from 12 September 2025. It covers access to connected product data, business-to-business data sharing on fair, reasonable and non-discriminatory terms, data for public bodies in an exceptional need, switching between data processing services, safeguards against unlawful third-party access to non-personal data, and interoperability standards. A data holder may use readily available non-personal data only on the basis of a contract with the user, and trade secrets in shared data have to be identified and protected by agreed technical and organisational measures.
• Unfair terms. A data-related term unilaterally imposed by one enterprise on another is not binding if it is unfair, and the supplier of the term carries the burden of proof. Always unfair: excluding liability for intent or gross negligence, excluding the other side’s remedies, or keeping the exclusive right to judge conformity or interpret the contract. Presumed unfair: blocking your use of your own data, blocking a copy of it, blocking termination within a reasonable period, or unilaterally changing price or data quality with no valid reason and no exit.
• Switching is the answer to lock-in. The contract must be written and available before signature, with a notice period of at most two months, a transitional period of at most 30 calendar days with continuity, assistance and security maintained, a retrieval period of at least 30 calendar days, then full erasure; an exhaustive list of portable and exempted data; support for your exit strategy; and stated charges. Alternative period at most seven months if thirty days is technically unfeasible, notified within 14 working days. No switching charges at all from 12 January 2027. Providers must publish the jurisdiction of their ICT infrastructure, offer open interfaces free of charge, and export in a structured, commonly used, machine-readable format - but need not develop new technology or hand over their own IP or trade secrets.

Next: The IP System → - the rights, the treaties and the organisations behind them.