Structuring Commercial Agreements for New Product and Service Deployment: Customer Collaboration Agreements and Pilot Programs

Description

As companies prioritize speed to market with new products and services, particularly new technologies or software offerings, commercial and technology counsel face increased requests from business clients to solicit customer feedback or test products in the market earlier than ever. Agreements for these customer engagements can take several forms and involve unique risks.

Customer collaboration agreements, often used for software applications, allow customers or other third parties to test software in the final development stages but before commercial release, and they provide businesses with the opportunity to gather and use the customer feedback. Customers can provide input into all aspects of the release, whether technically focused on functionality or related to the look and feel, ease of use, or other aspects of the software, service or product.

Further, pilot programs allow temporary use of a newly issued product or service to potential customers so they can experience the product's value proposition, with the intent of a subsequent commercial commitment. A structured pilot program with clear success parameters can be integral to establishing buzz in the marketplace around a new product.

However, several legal issues arise with these agreements, including scope of the license grant for this temporary use, how feedback may be gathered and used, ownership of any resulting intellectual property, and confidentiality. Similarly, however, lack of clarity around scope, failure to carefully define termination of the pilot and the parties' respective rights and responsibilities, and confidentiality concerns can derail a pilot's efficacy for the product owner.

Listen as our experienced panel of practitioners examines the potential opportunities of customer collaboration agreements and how to draft them to guard against the risks resulting from misalignment with the business' commercial objectives, lack of clarity in drafting, and challenges in enforcing terms of the agreements.