
Partner up: A guide to IP clauses in co-development agreements
From determining who will own newly developed IP, to confidentiality and regulatory issues, Ana Neves of Inventa discusses what to consider when establishing partnerships.
Innovation is the engine that keeps products in high demand, processes up to date with recent technological trends and, in the end, companies relevant in their markets.
However, maintaining the innovation flow within an organisation is challenging as it requires a good amount of resources, human and otherwise. It is often by resorting to the establishment of partnerships that companies and public institutions can overcome the obstacles preventing them from developing new products and technologies.
Partnerships and co-development agreements are an easy and cost-effective way to access resources, expertise, and IP assets without having to heavily invest in new hires or facilities.
This article explores some of the key IP aspects of co-development agreements, focusing on the distinct challenges and opportunities that arise from different types of partnerships.
General IP concerns
When entering a co-development agreement, navigating IP considerations is paramount to safeguarding contributions and delineating rights. These agreements often involve institutions across various jurisdictions, making it critical to understand the IP laws specific to the territory where each institution is based.
In the early stages of drafting a co-development agreement, it is vital to establish clear ownership rights. This involves determining who will own newly developed IP and how existing IP will be integrated into the collaboration.
Institutions must decide whether the ownership will be singular, shared, or divided based on specific contributions and negotiated terms. Also, it must be established early on how existing IP from each institution will be utilised within the partnership.
Is each partner allowed to use freely existing IP? And how about after the end of the partnership? For example, if the IP owned by one of the partners is related to a chemical process, is the other partner allowed to use the process after the end of the partnership? If yes, are there any stipulations such as royalties on the products obtained?
Furthermore, specifying the nature and limits of the asset to be shared—be it tangible materials, proprietary technologies, or intellectual knowledge—is crucial to setting boundaries and expectations. For example, if materials are being shared, what are the permitted uses of these materials and what happens if after the agreed use there is some leftover material?
Another essential consideration is confidentiality. The flow of sensitive information, including trade secrets and proprietary technologies, requires confidentiality agreements or clauses within the partnership agreement. Confidentiality agreements or clauses are designed to protect confidential information from unauthorised disclosure or use by partners or third parties.
So, before any information is shared, it needs to be established who within the institution is the recipient of the information and what is the intended purpose of accessing it. Also, specific rules regarding disclosure of any information generated needs to be in place before any work starts.
Furthermore, setting forth procedures for IP protection is crucial to ensure that all parties’ interests are adequately secured. Defining the expected results of the partnership and how it will be protected—patent filing(s), trademark registration(s), industrial design registration(s) or trade secrets—is key for a fruitful partnership.
Partnerships amongst public institutions
Public institutions such as universities, research laboratories, and governmental bodies are an immense source of resource and cutting-edge expertise to drive innovation. However, collaborations between public institutions carry specific challenges arising from the regulatory and policies inherent to public entities.
Faculties and research laboratories within universities are often regulated by specific university IP policies. Therefore, one critical aspect to consider when establishing an agreement with a public institution is to assure that the chain of command within the institution is followed and the correct party is mentioned in the agreement.
This can mean reaching out to the rectory of the university or the board of directors of the research institution. If there is a technology transfer office within the institution they should be involved to articulate contacts between the different parties within the institution.
On the other hand, IP policies within public institutions often have requirements regarding the dissemination of research findings. It needs to be established beforehand which details of the research, if any, can be disclosed and which details should be preserved to maintain the patentability of the results of the cooperation.
This is particularly critical for research involving funding from a specific public framework (for example, the European Innovation Council).
Another important consideration in public partnerships is the involvement of PhD and master’s students, who frequently contribute significantly to research projects. Institutions must ensure that their contributions are adequately recognised and protected.
Professors and researchers are bound by the institution’s IP policy as employees.
Students, on the other hand, are not employees and don’t necessarily fall under the scope of the IP regulation in force. This not only relates to potential IP rights but also encompasses the academic acknowledgment of their work. Ensuring that students are rightfully mentioned as inventors or contributors in patents, publications, and other scholarly outputs is essential in maintaining academic integrity and encouraging future participation in research endeavours.
Furthermore, the right to be recognised as an inventor is often guaranteed by the IP law in force in the territory of concern. Drafting agreements that explicitly address these rights can prevent disputes later in the future.
Partnerships between public and private institutions
Although many considerations regarding partnerships between public institutions are the same as for public-private partnerships, there are particular aspects that need to be addressed.
One of the primary considerations in such agreements is aligning the differing goals and expectations of each party. Public institutions often prioritise research and public dissemination of knowledge, while private companies are typically driven by commercialisation goals.
These conflicting priorities should be considered when drafting an agreement between private and public entities, establishing a clearance procedure before any result is disclosed. It is often advisable to have one contact person from each side that is responsible for the flow of information and that together decide on the timing of patent filings and publication.
Additionally, public entities may have policies prioritising open access to research findings, while private partners may seek exclusive rights to commercially exploit the results.
An effective IP framework must balance these perspectives, perhaps through shared ownership, licensing agreements, or delineated rights that ensure fair recognition and compensation for contributions made by each partner.
Furthermore, collaborations of this nature often bring together teams with varied operational procedures and regulatory environments. Public institutions, such as universities, operate under a set of academic requirements, including compliance with research ethics and public accountability standards.
Conversely, private companies are bound by internal operating procedures and market standards and regulations which are often misaligned with public sector policies.
Establishing a governance structure that addresses these differences while finding commonalities wherein the partnership can be established is essential for guaranteeing the achievement of results while also respecting each partner’s regulatory obligations.
Partnerships among private institutions
Partnerships among private institutions is probably the easiest of the partnerships in terms of knowledge dissemination as both parties have commercial purposes. However, there are other aspects that need to be considered. First, a clear timeline needs to be established to manage expectations regarding project conclusion and market launch. This involves defining the scope of the partnership, deliverables, and performance metrics for project execution.
Obviously, the agreement must outline ownership of any foreground IP (jointly developed IP), but another critical aspect of partnerships among private institutions is the existence of any background IP that may be brought into the partnership and used.
It needs to be defined how the background IP will be used and if it will be present in the product to be commercialised or if it is proprietary knowledge that is to be kept as a trade secret.
Some partnerships also enable the development of sideground IP, which are developments made by each party independently during the partnership. In this event, is the other party allowed to access it? Under what terms?
And how about postground IP (developments made independently after the partnership but based on the work developed during the cooperation)? Is the other party allowed to use it? What are the terms for licensing, royalties, and potential commercialisation routes?
Moreover, the dynamics of collaboration require careful management of corporate cultures and operational styles. Private companies often have distinct corporate cultures, which can impact how teams collaborate and communicate.
Establishing a governance structure that accommodates these differences is critical for sustaining a productive partnership. Regular check-ins, joint oversight committees, and conflict resolution mechanisms can help maintain alignment and harmony among partnering entities.
Lastly, as these collaborations often involve operating in different markets, establishing non-competition provisions while fostering innovation demands transparency and ethical considerations are key.
As industries evolve, co-development agreements will continue to play an important role in advancing technology and innovation. By embracing these agreements with foresight and diligence, institutions can turn collaborative efforts into meaningful technological advancements that produce an impact across both industry and society.
Ana Neves is a patent consultant at Inventa, and can be contacted at aneves@inventa.com.
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