A Joint Venture Agreement defines the governance, contributions, and profit sharing between co-venturing entities. This playbook examines dispute resolution, management control, and exit provisions.
Why This Matters: Ambiguous IP terms can lead to infringement disputes, licensing conflicts, and jeopardized product development.
Negotiation strategy
If you're the JV Partner A:
Ensure that all pre-existing IP remains the property of the Company. Negotiate for joint ownership of any newly developed IP to leverage future innovations.
If you're the JV Partner B:
Secure a non-exclusive license to use the Company's pre-existing IP for the duration of the contract. Aim for sole ownership of any IP developed independently.
Essential elements
1
Ownership of IP
Defines who owns the IP.
2
Licensing Terms
Outlines IP usage rights.
3
Background IP Protection
Safeguards existing IP assets.
Action framework
ACCEPT
Propose edits if IP ownership terms are unclear or do not align with strategic goals.
EDIT
Reject clauses that fail to protect background IP or improperly assign ownership.
ADD
Add clauses to clarify joint ownership and licensing terms.
PRO TIP
Always ensure IP clauses are tailored to the specific transaction to avoid future disputes.
Example clauses
FAVORABLE
Clear Joint Ownership Clause
"All intellectual property rights in any pre-existing materials or technology that a party brings to the joint venture shall remain the property of that party. Any new intellectual property developed jointly by the parties during the course of the joint venture shall be owned jointly by the parties, unless otherwise agreed in writing."
NEUTRAL
Standard Licensing Agreement
"Each party hereby grants to the other party a non-exclusive, royalty-free license to use its pre-existing intellectual property solely for the purposes of the joint venture. This license shall not extend to any third parties unless expressly agreed in writing by the licensor."
UNFAVORABLE
Ambiguous Ownership Terms
"The ownership of any intellectual property developed during the project shall be determined at a later date."
Fallbacks
High-Risk Projects
In high-risk projects, ensure that IP ownership and licensing terms are clearly defined to mitigate potential disputes and financial losses.
Cross-Border Transactions
Consider jurisdictional differences in IP laws and ensure compliance with international standards to protect IP rights across borders.
Technology Collaborations
In technology collaborations, prioritize joint ownership and clear licensing terms to foster innovation and shared benefits.
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