4 Factors to Consider When Working With Third Parties to Develop IP

4 Factors to Consider When Working With Third Parties to Develop IP

Increased global connectivity in modern times can create great opportunities for companies to come together and develop groundbreaking Intellectual Property (IP). A joint venture may also a chance to expand your IP boundaries and help your brand establish a global presence. There are, however, potential risks associated with group projects and joint ventures in relation to IP protection. Parties involved in a group venture or other type of business relationship may be required to provide access to confidential information, and there is always a risk that the confidential information may be misused for another party's benefit. Here are some factors to consider when working with third parties to develop IP.

Ownership of the New IP

When working with third parties, clearly setting out expectations related to ownership, confidentiality responsibilities, accessibility to confidential information, and future use of the new IP is invaluable. These expectations should be clearly set out in an agreement with all parties signing off. Considerations to making determinations of expectations can include identifying each party's financial, material and resource contribution. These considerations may not be evaluated as equally important. When all parties clearly understand their roles and their rewards, it is much less likely that an ownership issue will occur in the future.

IP Limitations for Third Parties

It is often beneficial to clearly identify the specific uses that other parties are entitled to, whether over a new IP or existing IP. Limitations can include identifying specific types of use (research only, creation of protoype, etc.), fields of use (oil & gas vs. mining), geographical restrictions (specific countries or other jurisdictions), and confidentiality requirements. Other types of limitations may also be clearly defined in an agreement setting out IP rights.

Accessibility of Background IP for IP Development

If you are using and sharing your existing IP with third parties, you will have to clearly set out the accessibility limits for background IP to third parties. Use of background IP may be subject to a license fee or other costs. Ideally, these should be clearly defined before access to background IP is granted to third parties so that misunderstandings are less likely to occur. Limitations to timeframe and scope of use may also be defined in any agreement setting out accessibility to existing technologies.

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