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Proper documentation of intellectual property agreement in Form 1023 for non-profit

Austin, TX |

I am in the middle of finalizing Form 1023 and associated attachments for my non-profit. One element of our non-profit will include the distribution of a mobile app to provide to our constituency (free and paid). We plan to outsource this work through a 3rd party contractor, but want to ensure that our non-profit owns all IP around the development. The purpose of the mobile application is to supplement our services from the web and to use as a means of fundraising through its distribution. I have included a "Policy on Intellectual Property Rights" in our 1023 that any work performed for our org resulting in the creation of IP assigns all rights, title, and interest in and to any such IP rights to our org. Are there any other considerations that I should include in our 1023 to call-out?

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Attorney answers 4


There is no way you can draft proper documentation for this application without retaining legal counsel. You need counsel with expertise in tax, non-profit, and intellectual property law. This web-site is not a good substitute for legal counsel. Every viable non-profit should work closely with legal counsel to lay the proper legal foundation for its tax exempt status. If you try to handle this on your own based on general advice received on web-sites such as this, you will undoubtedly make a fundamental error (or several of them) which will result in failure of your non-profit. Non-profits are allowed to own and use IP rights to generate revenues to support their operations, but this is a very complex matter that requires navigating through complex rules and regulations. You need experienced legal counsel to deal with this.



Thank you Maurice. I have proceeded to reach out to a local office here in Austin, TX.


I agree with my colleague here. It really sounds like you should be getting some formal legal help as any insights here are no substitute for your own counsel and you are entering some complicated territory.

Frankly, including such provisions on your 1023 will have no legal effect regards to your interactions with various providers that provide this content for you. You will need to ensure that all work provided and the IP concerns involved are addressed properly in specific independent contractor agreements including work-for-hire/assignment language.

I suggest you discuss your plans and objectives over with a lawyer in private and most of us here, including myself, offer a free phone consult.

Best regards,
Natoli-Lapin, LLC
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The law firm of Natoli-Lapin, LLC (Home of Lantern Legal Services) offers our flat-rate legal services in the areas of business law and intellectual property to entrepreneurs, small-to-medium size businesses, independent inventors and artists across the nation and abroad. 866-871-8655 DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.



Thank you Frank. I have proceeded to reach out to a local office here in Austin, TX.


Beyond agreeing with my colleagues on the specific issue that your 1023 form cannot of itself effect a transfer of copyright from a third party to your organization ... this idea seems symptomatic of a larger legal error.

Briefly, it is not sufficient to "call out" "considerations" in your IRS Form 1023.

Your "corporate policies" are in most cases absolutely ineffective to establish any kind of legal obligation on anyone (other than the non-profit itself, if referenced in its bylaws). To establish a binding legal obligation, you need to incorporate that obligation into a contract that is formed between the organization and the other part(ies), whether those are i.c.'s, employees, or customers/recipients of services. For example, your app should include some kind of an EULA as is standard for any web service (although each web service has its own tailored EULA).

It is definitely necessary for you to associate yourself with experienced non-profit and intellectual property counsel.

ATTORNEY ADVERTISING. You are not my client. I am not your attorney. The above comments are not confidential, not "legal advice", and not "legal opinion". I am licensed as a patent attorney and in the State of Connecticut. Retain and consult an appropriately licensed attorney to identify the laws and facts material to your concerns.



Thank you Alan. I have proceeded to reach out to a local office here in Austin, TX.


Because the application will be a fundraising tool you need to discuss to whom it will be distributed and how it will work. Long before you file you application for non-profit status you need to speak with an attorney in your state who specializes in non-profits law. There are state law considerations in play as well. And have an intellectual property attorney draft the agreement between your organization [even as yet unformed] and the person who is developing the application for you. Good luck.

The above response is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.



Thank you Daniel. I have proceeded to reach out to a local office here in Austin, TX.

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