How to prevent IP ownership issues when a strategic alliance, joint venture or collaboration fails
Technology-focused collaborations form the foundation of corporate planning strategies today. Such collaborations may be in the form of strategic alliances, joint ventures, open innovation, or other legal structures. Regardless of how participants characterize and legally structure such collaborations, the most common motivation for forming such alliances is to pool technology and R&D resources. When it comes to technology and R&D, it should follow that IP ownership (“intellectual property”) issues should be at the forefront of the collaboration planning stage. However, my experience shows that IP ownership is rarely given due consideration by parties in agreements that are supposed to fully set out the rights and responsibilities of the parties.
I can say with authority that intellectual property issues are often not given adequate consideration in collaboration agreements because my experience in this area stems primarily from helping clients after their collaborations have failed. My clients typically sought my help after their collaborations failed and sought to exit the relationship with at least some valuable intellectual property rights intact. In each of these situations, it was clear that if my client had come to me for advice while executing the general business and financial parameters of the collaboration agreement, they might not have needed me to fix things on the back end. . In a nutshell, if I had been put at the forefront of clearing up the IP ownership issues that arose from the collaboration, I would have been able to prevent questions about IP rights from even being a question.
My perspective on the preventable nature of IP ownership problems was confirmed when I recently attended a gathering of professionals who focus primarily on strategic alliances and other types of collaborative ventures. In this little over an hour meeting, I counted at least 5 instances where someone commented something like “when the relationship goes sour, IP problems cause problems”. From the sighs that accompanied the mention of IP ownership issues, I got the distinct sense from these seasoned professionals that IP was not only a big deal, but also a common occurrence in their collaborations.
Savvy business professionals should realize that when a major problem occurs frequently, there is likely a failure in an associated business process. This is the case with IP ownership issues – most of the issues I’ve addressed on the back end of a failed collaboration were entirely predictable and the resulting issues could have been reduced or eliminated with proper planning. But if common IP ownership issues aren’t hard to predict and prevent for an IP and patent business strategist like me, why do these issues still occur so frequently in the collaboration space?
The answer is quite easy from my point of view: patent experts are not normally considered to have essential commercial knowledge, and as such, people like me are not considered necessary participants in a collaboration agreement. This is true even when the main reason the parties come together in the first place is to pool existing technology and create R&D synergies that will result in accelerated innovation to the benefit of both participants.
It is true that we patent experts have made it easy to stay out of the business business by traditionally focusing our practices on obtaining patents and litigating them for clients. We have left commercial matters to business professionals and transactional lawyers because, as a highly specialized profession, we feel more comfortable in the area of our own expertise. Additionally, we have generally not reached out to educate others about our somewhat “arcane” area of legal expertise. Our knowledge has remained closely within the confines of patent practice and we have been problem solvers as a result. instead of preventing problems before they occur.
Business and legal experts today reside in functional silos that effectively impede communication and education. Unless these silos are eliminated, it is inevitable that business professionals will continue to destroy corporate value by not sufficiently including IP ownership in their collaboration agreements. Patent experts can continue to create value for ourselves by devoting efforts to preserve our clients’ intellectual property rights when collaboration fails.
Albert Einstein said that the definition of insanity is “doing the same thing over and expecting a different result.” To this end, it is insane that business professionals dealing with the collaboration space continue to struggle with IP ownership issues over and over again because there is no doubt that complications and disappointments will inevitably arise. While not all of these issues can be prevented through upfront analysis, I can virtually guarantee that the cost and effort of resolving IP ownership after a collaboration failure will be significantly less when a business-focused patent professional like I join the stage of collaboration planning and preparation of agreements.