3.5.2.2  Licensed Intellectual Property

The State's preference is that it owns all Intellectual Property Rights in connection with the Project but acknowledges that this is not possible or appropriate with respect to certain categories of Intellectual Property Rights, particularly with respect to Background IP (being Intellectual Property Rights in connection with the Project but developed by or on behalf of Project Co or a Project Co Associate for purposes other than the Project). Such categories of Intellectual Property Rights will constitute Licensed Intellectual Property and will be the subject of a broad licence from Project Co to the State rather than being owned by the State. The Intellectual Property Schedule allows the Respondents to bid back the Intellectual Property Rights which will be Licensed Intellectual Property in the following categories, provided that the Respondent provides justification why the relevant Intellectual Property Rights should be licensed to the State rather than owned by the State:

•  Non Project Specific IP - other than Background IP, this should be limited to certain commercially sensitive Developed Intellectual Property which is core to a Project Co Associate's business;

•  Project Co Data - this should be limited to data which is not required for the operation of the Project Assets and there is a legitimate need for Project Co or a Project Co Associate to own such data; or

•  Escrow Material - this should be limited to highly commercially sensitive Intellectual Property Rights and must not be required for the day-to-day operation of the Project Assets, for example source code for certain proprietary software. If the State agrees that certain Intellectual Property Rights are Escrow Material, this Escrow Material will be licensed to the State only if an Escrow Release Event occurs.