This document outlines nine key considerations for companies conducting beta tests of software prototypes. It addresses protecting intellectual property through contractual agreements, limiting the scope of evaluations, maintaining confidentiality, restricting access to prototypes, balancing internal and commercial needs regarding publications, limiting liability, avoiding risks outside a company's control, and managing risks to trade secrets. The overall message is that companies should carefully structure beta tests through agreements to manage risks and protect their intellectual property, proprietary information, and trade secrets.

1. NINE KEY CONSIDERATIONS
Prepared By: Ony Okoro

2.  A beta test is the final stage of testing a software
prototype before it is ready for launch.

4.  Disclosure of your trade secrets.
 Third party rights to your prototype.
 Damage to a third party as a result of the beta test.
MANAGE YOUR COMPANY’S RISK AND PROTECT
YOUR COMPANY’S INTELLECTUAL

6.  Will evaluators have rights to improvements?
 Who will own the data resulting from the evaluation?
 How can you prevent evaluators from reverse
engineering or modifying your prototype?
PROTECT YOUR COMPANY’S INTELLECTUAL PROPERTY
CONTRACTUALLY

8.  What constitutes proper use of the prototype?
 Will the evaluator have rights to use the prototype
for commercial purposes?
LIMITING THE SCOPE OF THE EVALUATION MAY OFFER
GREATER PROTECTION FOR YOUR COMPANY

10.  What role should evaluators have in the market?
◦ Direct Customers
◦ Indirect Customers
◦ Competitors
◦ Academics
EVALUATORS SHOULD BE DIVERSE
CONSIDER AVOIDING COMPETITORS

12.  How long will confidentiality obligations last?
 Under what circumstances will confidentiality
obligations no longer apply?
 How limited should access to the prototype be?
STRONG CONFIDENTIALITY AGREEMENTS OFFER GREATER
PROTECTION FOR YOUR COMPANY’S TRADE SECRETS

14.  Will the evaluation take place at a single site or at
multiple sites?
 Will affiliates of the evaluator have access to the
prototype?
 Will consultants/contractors/agents have access
to the prototype?
LIMITED ACCESS TO THE PROTOTYPE OFFERS GREATER
PROTECTION FOR YOUR COMPANY’S TRADE SECRETS

16.  Will evaluators have any rights to include data in
publications?
◦ If so, what type of data can be included?
◦ How will the publications be reviewed?
 Will evaluators have any rights to mention their
involvement in the beta test?
 Will evaluators have any rights to publicly comment
about the prototype?
BALANCE BETWEEN THE INTERNAL NEEDS OF THE EVALUATOR AND
YOUR COMPANY’S COMMERCIAL NEEDS IS IMPORTANT

18.  Will the prototype be provided “AS IS”?
 Is it appropriate to limit your company’s liability?
◦ If so, what is the scope of the limitation?
LIMITED LIABILITY ENABLES YOUR COMPANY TO MANAGE RISK AND
OFFERS GREATER PROTECTION FOR YOUR COMPANY

20.  Will the evaluator have any obligation to protect
your company from their use of the prototype?
 Will you be able to act quickly if your trade secrets
are disclosed?
 How will disputes be handled?
◦ Negotiation/Mediation/Arbitration/Litigation
 Who should bear the costs of breaches, errors and
mistakes?
CONSIDER AVOIDING RISK FOR ACTIVITIES OVER WHICH
YOUR COMPANY HAS NO AUTHORITY OR CONTROL

21.  For more information contact:
 Ony Okoro at okoro.ony@apex-legal.com