Companies may work together, using their best talent and leverage of their assets to create new products or methods that they jointly own. Joint Intellectual Property (“IP”) development can lead to advances otherwise unattainable by individual companies, but can be used exclusively by the two companies through cross-licensing agreements. However, making sure that an individual company’s interests are protected means carefully planning, negotiating, and drafting all agreements.
What is Joint IP Development?
When one party, individual, or company develops new information, that party can be the sole patent or IP owner of whatever was developed. Accordingly, when two or more parties create something new, they can patent or protect that new invention together. This way, they both own the patent or rights to the IP.
What are the pros and cons of joint IP development?
On one hand, the parties have the advantage of pooling each other’s resources in order to create new information that would benefit them both. The creation may not have been possible without this relationship. It can also help forge and solidify future relationships, as well as create a foundation for further innovative developments that neither company could accomplish by themselves.
On the other hand, if companies have competing interests, or if there’s a breakdown in the relationship, it can be difficult to share the patent or IP. Considering that joint IP development is a group effort to make something that is supposed to be owned exclusively by one party, it’s reasonable to anticipate problems. After all, which party gets which share? Do they both own it wholly? Do they own it 50/50 or in portions according to their contribution? Perhaps they own it according to their own use? Can both license the IP to another third-party?
What is cross-licensing?
One way companies can protect their own interests in joint IP is through cross-licensing. Suppose that company X and Y fully and wholly license the IP to each other with no consideration. This means that both companies have full use of the IP without owing each other anything. This way, the companies benefit from the IP according to not how much they put into development, but how well the company can put the invention to good use.
Protect your company’s own interests.
It seems easy to create a cross-license agreement, but each company has its own interests. Cross-licensing can most easily address any current or future problems with sharing IP. An intellectual property attorney can help you create a licensing agreement that optimizes your company’s ability to benefit from your jointly developed intellectual property. If you need assistance working through such options, we invite you to contact our New York and South Carolina intellectual property lawyers at 888-666-0062 to learn your rights and how to best protect yourself moving forward in your joint venture.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.
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