An MOU establishes the foundational understanding between parties prior to definitive agreements. This playbook reviews negotiation of commitments, timelines, and governance structures.
Why This Matters: Inadequate IP and confidentiality provisions can result in loss of competitive advantage and legal disputes. Clear terms protect valuable intangible assets and ensure compliance with security standards.
Negotiation strategy
If you're the Party A:
Ensure that confidentiality obligations are comprehensive and enforceable. Negotiate for clear IP ownership terms to retain control over proprietary developments.
If you're the Party B:
Seek to limit confidentiality obligations to reasonable terms and ensure that any IP developed is fairly assigned or licensed to allow for future use.
Essential elements
1
Confidentiality Obligations
Protects disclosed proprietary information.
2
IP Ownership
Defines ownership of developed IP.
3
Licensing Terms
Outlines IP usage rights.
Action framework
ACCEPT
Propose edits if the confidentiality terms are too broad or if IP ownership is not clearly defined.
EDIT
Reject clauses that do not adequately protect proprietary information or that assign IP ownership unfairly.
ADD
Add clauses if there are gaps in confidentiality or IP protection, especially in joint development scenarios.
PRO TIP
Always ensure that IP clauses are aligned with the strategic goals of your organization to prevent future disputes.
Example clauses
FAVORABLE
Robust Confidentiality Clause
"Each party agrees to keep confidential all proprietary information disclosed by the other party during the term of this agreement."
NEUTRAL
Standard IP Licensing
"The parties agree that any intellectual property owned by one party and used by the other party shall be licensed on a non-exclusive, royalty-free basis."
UNFAVORABLE
Weak IP Ownership Terms
"All intellectual property developed under this agreement shall be jointly owned without further documentation."
Fallbacks
High-Risk Projects
In high-risk projects, ensure that confidentiality and IP clauses are stringent to mitigate potential losses from breaches or disputes.
Cross-Border Transactions
Consider jurisdictional differences in IP laws and confidentiality standards when drafting clauses for international agreements.
Technology Collaborations
In tech collaborations, clearly define IP ownership and licensing to prevent disputes over jointly developed technologies.
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WEEK 1
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WEEK 2
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WEEK 3
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WEEK 4
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