Define: New Technology
New Technology is a defined term used in software, development, and licensing agreements to capture any invention, discovery, improvement, innovation, or enhancement created or made available after a stated effective date. It determines whether newer tools, methods, or upgrades fall inside or outside the contract's existing scope, ownership, and support obligations.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What New Technology Means in a Contract
In a commercial or software agreement, New Technology is a defined term that draws a line in time. Everything invented, discovered, improved, or enhanced before an agreed effective date is treated as existing technology, while anything meeting that description afterward is New Technology. This distinction matters because contracts often allocate different rights, fees, or obligations depending on which category a given piece of software or process falls into.
The term is deliberately broad. It typically covers inventions, discoveries, improvements, innovations, and enhancements to software, rather than being limited to a single category such as patents or code. This breadth allows the definition to capture unexpected developments, including incremental upgrades, new features, or entirely novel tools that neither party anticipated when the agreement was signed.
Because the definition hinges on timing rather than technical substance, parties negotiating a Software Development Agreement need to agree clearly on what the effective date actually is, since that single reference point governs how the entire clause operates.
How New Technology Is Defined or Measured
Most definitions of New Technology combine two elements: a description of the type of development (invention, discovery, improvement, innovation, or enhancement) and a temporal trigger (made available after a specified date). The measurement is not based on technical complexity or novelty in a patent sense, but simply on when the technology became available relative to the agreed cutoff.
Some agreements refine this further by specifying whose development counts. For example, the definition might be limited to enhancements made by the licensor, or it might extend to any third-party technology that either party incorporates into the deliverables. Others measure availability by reference to public release, internal deployment, or delivery to the counterparty, which can produce different outcomes if those events occur on different dates.
- Whether the technology must be created by a specific party or can originate from anywhere
- Whether.
Relevant Circumstances
- Introduction of a new software product.
- Enhancement or upgrade to an existing product line.
- Licensing of software improvements and innovations to a third party.