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The types of joint ventures and the types of the joint venture agreements can very enormously. Depending on the purpose of the joint venture, it may addresses inventions, development, evaluation or production of new products. Whatever the focus, a joint venture agreement raises a number of interesting intellectual property issues, especially as far use of existing technology and the creation and use of new technology are concerned. Use of existing intellectual property A joint venture will, generally, use parent’s companies' existing intellectual property, be it patents, know-how, trademarks or other intellectual property rights, under a licence agreement. The owner/grantor of such intellectual property will often be unwilling to assign outright its rights to the joint venture for fear that the venture may fail. Also the owner of the intellectual property may only be licensing an element of its intellectual property or for a certain field of use to the joint venture. The consideration for the licence will reflect the nature of the joint venture. Royalty on sales of products will be available in a production joint venture, or for the production aspect of a full-function joint venture. In a R&D joint venture, an initial payment may also be appropriate. It is also important to consider who will own any intellectual property rights arising in technology created by the joint venture company itself, as such technology will almost inevitably arise. Should these vest in one or both of the parent companies, although co-ownership of intellectual property rights is not recommended? Or should the parent companies merely have, if anything, no more than the right to a licence-back from the joint venture company? If the parents are to own the newly-created intellectual property, then mechanisms to identify it and to transfer title to it back to either or both of them will be necessary, as will licences-back to the joint venture. It is therefore important to address each of the following issues in any agreement dealing with a situation in which there may be created new intellectual property: - Who is to do the work? The R&D will be performed by individuals whose particular relationship with the employing or contracting collaborator needs consideration. Therefore, appropriate services or employment agreements must be put in place in relation to commissioned research, when contractors use independent consultants to address the onwership of the intellectual property rights created. In fact, it is essential that an invention does not belong to some other third party to the collaboration who, in the absence of a subsequent written agreement transferring title to any such invention (and the right to apply for protection) to the commissioning collaborator, could assert any resulting patent or other intellectual property right against any of the collaborators in their exploitation. Similarly, each collaborator should ensure that, under the contractual arrangements with its own staff and contractors, it is not exposed under any such warranty and such staff or contractors may not prevent its exploitation of any arising intellectual property rights. - Ownership of results. The agreement will typically provide that rights in and to inventions and all other technical knowledge resulting from developments made in the course of the project will (together with the right to seek protection for these) belong to the inventing party. Although this does little more than confirm the status quo and does not vary what would naturally arise, it does serve to make it clear that, except as otherwise expressly provided, the other collaborators have no say as to filing and prosecution policy. The contract should not provide for any inventions to be "jointly owned" by the collaborators. - Filing and prosecution policy. What is considered to be patentable (or worth patenting) is subjective and therefore cannot be provided for in the agreement with sufficient certainty to protect the interests of the other collaborators. Therefore, if the interests of the inventing collaborator do not justify filing for patent protection for an invention of interest to another, provision should be made allowing that other party to insist on such protection (perhaps at that other party's expense) if patent protection is not sought by the inventing party within a given period. Similar issues arise as to the territorial filing policy for any particular invention. The exploitation needs of another collaborator may call for filing more widely than is usual for the inventing party. Again there should be provision for any non-inventing party, at its option and expense, to call for an inventing party to file, prosecute and maintain an application. - Confidentiality. Unless the collaborators are obliged to keep results and any disclosed pre-existing technology of the other confidential, the value of such technology will be reduced. Disclosure otherwise than in confidence before making any patent application will prejudice the right to grant of a patent. Therefore, clear reciprocal obligations of confidence should be included. - Exploitation of the new technology. The R&DE imposes certain constraints on the freedom of the collaborators to exploit the technology resulting from the collaboration where they do so other than by each party being free to exploit the results and any pre-existing technology necessary for the exploitation independently. Therefore, it is likely to be necessary to notify collaborative agreements, as well as other co-operative joint ventures, between substantial parties. This article is for general purposes and guidance only and do not constitute legal or professional advice. Copyright 2010 Anassutzi & Co Limited http://www.anassutzi.com/. All rights reserved. Information may be shared or reproduced only if accompanied by the author’s name and bio.
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