Protecting Intellectual Property in Joint Ventures and Other Collaborations

Joint ventures and collaborations often foster scientific breakthroughs. However, companies must take steps to protect their patents and trade secrets.

Joint ventures and other collaborations are increasingly important tools for companies seeking to gain and maintain a competitive advantage, especially in industries where scientific innovation is a key driver of value. While collaboration offers tremendous advantages, it also creates potential intellectual property (IP) risks. This article addresses how companies looking to maximize the value of their joint ventures and other collaborations can avoid these IP risks.

Companies collaborate for many reasons, including to spread costs and risks, access new technologies, or enter new industries or geographies. Many collaborations in the chemical industry allow partners to share research and innovations. Sometimes, collaborations allow one company to license and use a partner’s existing technology. In other collaborations, the partners are jointly researching a new technology and leveraging both of their scientific expertise to achieve a common research goal.

Collaborations take a variety of forms, including formal joint ventures, joint development agreements (JDAs), or collaborative research and development agreements (CRADAs), as well as less formal collaborations. But in all forms, a collaboration’s success often hinges on how effectively companies share information and ideas.

As a result of this information sharing, nearly all collaborations involve some level of risk to a company’s background IP, including both patents and trade secrets. Collaborations often require sharing confidential knowledge and trade secrets, which a company ordinarily would not allow third parties to access. This is a particular concern in joint ventures or collaborations between industry competitors. Companies that fail to structure their collaboration agreements to sufficiently protect their trade secrets risk losing them. Collaborations also pose risks to a company’s existing patents if the governing agreements do not adequately specify who has rights to practice the patents during and after the term of the agreement.

Companies can minimize these risks by anticipating potential issues and drafting their collaboration agreements strategically to avoid the most common risks. Careful planning up front can avoid loss of IP rights and costly litigation.