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When you engage in a joint venture, you connect with another business to cooperate for some beneficial end goal. This process can involve pooling your collective assets and business knowledge, sharing both the ideas and the profits. Intellectual property (IP) is likely part of the assets you may share and a product of the ideas you come up with together. However, if you are not careful, this IP may cause issues relating to ownership and who has the relevant IP rights. Therefore, it is important that you set up protections and contractual measures to protect both your IP and any that the joint venture creates. For some guidance, this article will explain how you can protect your IP as part of a joint venture.

What Is a Joint Venture?

A joint venture is a kind of strategic cooperation between two or more businesses to achieve an end goal together. Usually, this is for a set period to complete a specific project or task, but this can vary. Both parties will invest their assets and funds into this project, which they will both benefit from. You may form a joint venture to:

  • expand production to another region or country;
  • establish your presence within the market;
  • share new technology and progress to develop your industry; or
  • develop new products from sharing knowledge.

Whatever your end goal, an important aspect of your joint venture that you need to consider is business structuring. How you decide to structure your joint venture will influence any future IP disputes, as your structure can affect ownership concerns.

For example, if you decide to register and incorporate your joint venture as a company, it can own its own assets, usually including any IP you create. If you do not register your joint venture as a company, you will need to specify in your joint venture agreement who owns what.

Every joint venture needs a joint venture agreement, which sets out the rights and obligations of all members of the enterprise. To protect your IP, it is important that you cover important IP concerns in this agreement. Otherwise, you run the risk of IP ownership and infringement disputes later.

Protecting IP You Already Own

Before going into a joint venture, you likely will already have IP that your business owns and benefits from. This can include:

  • trade marks;
  • patents;
  • designs;
  • plant variety rights;
  • trade secrets; and
  • copyright.

For instance, you may have a registered or unregistered trade mark in your business name and logo.

If you do not have adequate protection for your IP before going into the joint venture, you should do so where possible. Ensure that any relevant IP is registered, and do this with plenty of time. You should not relinquish any major ownership rights for a joint venture, but you may grant the other party a licence to use your IP to achieve your collective goal.

If you have unregistered patents or designs that you want to use for the joint venture, be very careful about doing so. It is difficult to prove IP infringement without a registered right in that IP, so you may lose your valuable innovations if you share them without protection.

Protect any confidential information with a non-disclosure agreement, with sufficient consequences for a breach.

Who Owns the IP You Create?

The end goal of your joint venture may be to create something, such as a product or piece of work. If you are creating a joint venture to complete such a goal, you should clearly set out in your joint venture agreement who owns the IP rights of that end work. This ownership will vary depending on the kind of IP you create.

Be sure to carefully distinguish between your business’  individual IP and the IP the joint venture creates in your joint venture agreement.

For registered IP rights, you can register multiple owners over a specific type of IP. Notably, if you have incorporated a company for your joint venture, that company may hold IP rights as an asset. Duly consider the benefits of having multiple owners and how this may affect the commercial value of the IP you create.

For an unregistered IP right like copyright, you will need to prove the contribution of all parties to a collaborative work. Their contribution must be:

  • original;
  • substantial;
  • collaborative; and
  • indistinct from other contributions.

IP After the Joint Venture

In your joint venture agreement, it is important that you set out the ongoing IP rights of all parties once the venture has finished. Joint works may need the consent of all owners for licensing, so it is important to establish these owners clearly. Your agreement should cover:

  • whether you own the IP assets in equal or unequal shares;
  • how you will handling licensing;
  • how the parties can use the IP assets you create;
  • IP commercialisation;
  • IP registration and other protections; and
  • recognition of each creator, and any subsequent rewards.

Key Takeaways

Engaging in a joint venture can be a profitable and strategic move. However, you may share your IP assets as part of your resources, so you need to make sure you protect any IP you create. If you would like more information or help with your joint venture’s IP, contact LegalVision’s IP lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is a joint venture?

A joint venture is when two or more businesses strategically work together to complete a project or task. You can register a joint venture as a company, or operate using the respective assets and knowledge of both businesses.

Do I still own my IP in a joint venture?

You still own your already existing IP when you start a joint venture with another business. However, if you create new IP together, ownership can get more complicated.

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