| Abstract: | Legal context: The IP issues involved in forming, operating, and (inevitably)terminating a joint venture or collaboration are much more numerousthan would typically apply to a straightforward investment inan organic growth, or on a merger or acquisition. The pitfallsare also more insidious. Key points: The author approaches the topic within the commercial context,discussing the commercial rationale behind joint ventures andcollaborations and the life cycle of a joint venture or collaboration. The article explores the four key stages of a joint ventureor collaboration: (1) pre-contract stage: confidentiality andtrade secrets; due diligence; structural considerations; (2)formation stage: assignment and licensing of existing rights;the terms of transfer; valuation of IP contributions; (3) durationstage: future contribution of existing and future backgroundrights; ownership and exploitation of foreground rights; maintenanceand protection of rights; and (4) termination stage: providingfor both unexpected and expected events. The article also provides advice as to avoiding the pitfallsof joint ownership: understanding the differences between jurisdictions;potential problems; and avoiding the banana skins. Practical significance: Joint ventures and collaborations are widely used across a rangeof industry sectors, but particularly high-tech sectors, suchas pharma/bio, information technology, and communications, inwhich IP rights are particularly important. Parties consistently cite the loss of background IP rights asa major risk in joint venture collaborations, and dealing withIP that is generated in the course of a joint venture or collaborationcan also present particular problems, particularly if it isto be used or owned jointly by more than one party. |
