Intellectual Property Joint Ventures – Can Rivals Turn Into Valued Partners?

Compared with a typical research and development cycle the acquisition of IP often requires less resources (time and money). Depending on the IP status and asset maturity, the likelihood in a merger or acquisition increases that the developed products or services achieve commercial viability.

However we face limitations for mergers. Especially if two major market players think about collaboration opportunities, the selectable options might be restricted for example by anti-trust regulations. Hence, we need to search opportunities underneath full-scale mergers or acquisitions. More reasons/need for (sole) IP collaboration...

What are potential models for IP collaboration?

IP Licensing: Permission to use Intellectual Property transferred between two parties, the IP provider/owner and the recipient/licensee. For example technology licensing is an agreement where the owner of a technological Intellectual Property (the licensor) allows the other party (the licensee) to use, modify, or sell the technology, usually in exchange for compensation. More tightened, the licensor allows the licensee in a component business a product with embedded technology rights, i.e. to install and resell a core processor from the licensor in a computer produced by the licensee.

Contract R&D: One party sets the ambition, establishes the objective and pays. The other party conducts research to meet the objective. The roles and responsibilities are clearly set within the contract. We know them from all kind of supplier - customer relationships.

Joint Venture: Companies enter a JV and combine their IP assets as key contributions. An IP joint venture can involve patent and/or trademark sharing. It can be extended to an R&D JV. Limitations to a certain field of technology can occur. Such joint ventures are common.

Joint Ventures are the most collaborative models listed here, having four lifecycle stages:

Pre-contract, before the signature of the joint venture agreement Contract, signing a joint venture agreement Implementation, fulfilment of the JV contractual obligations Termination, end of the JV contractual obligations All stages incorporate distinct challenges. The JV parties must agree on the value of the contributed IP assets and balance contributions somehow in the contract. During the life of the partnership they have to work together. In this stage the JV partners assess regularly their respective responsibilities and royalties to adjust and maintain successful...

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