Journal of Intellectual Property Law & Practice Advance Access published online on May 17, 2009
Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp071
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© The Author (2009). Published by Oxford University Press. All rights reserved.
Intellectual property and joint ventures: protection of intellectual property on exit
Legal context: Businesses are concerned about the risk of losing control over IP when conducting a JV or upon a JV's termination. It is best to address this risk from the outset. Issues relating to the division of ownership and exploitation of IP rights after expiry of a JV are inseparable from those relating to the division of other rights and assets of the JV, so it is important to focus on the corporate structure of the JV as well as the terms of any specific IP licence, assignment, or other agreement. IP owners can use the licensing terms and JV structure to reduce the risk of a loss of control of its IP both during and upon termination of a JV.
Key points: This article examines (i) the issues to be considered by an IP owner planning to enter into a JV, together with strategies to minimize the risk of losing control of IP, particularly on exit, (ii) from an IP owner's perspective, different JV structures and exit mechanisms, and (ii) key licensing structures and terms in the context of JVs. It emphasizes the importance of protecting other assets of a JV in addition to IP.
Practical significance: As the credit crunch and the economic downturn leads many businesses, keen to maximize revenues from existing sources, to give increased attention to IP portfolios, the JV is expected to become an increasingly popular model for achieving growth. Businesses, however, are increasingly concerned about losing control over IP when conducting a JV or upon a JV's termination.
Correspondence: * Allen & Overy. Email: nigel.parker{at}allenovery.com