ITCollaborations

19 December 2002

Emmanuel Gougé

I.T. collaboration agreements frequently involve research institutions and companies that are willing to benefit from broad research outputs. However, they also extend to many different situations, including cooperation between companies seeking common development of new technologies.

The aim of such agreements is therefore to formalise the relationships between the project participants and to set out the rights and obligations of each one.

In order to establish an effective collaboration and avoid difficult and time-consuming negotiations, the project partners should express the general background of their collaboration and the purpose of their common work. Generally included in the preamble of a collaboration agreement, such information helps demonstrate each party’s intention.

Before starting the project, the parties should address and agree on the issues that will structure their relationship and set out the conditions under which they will exploit the work that arises from their cooperation. Some of these issues are described below.

Scope of the collaboration:

The parties should have a clear idea of the items they are expected to contribute to the project and should precisely define the field and scope of their collaboration.

The definition of the field is usually based on a technical description of the work to be done.

The definition should be twofold: on the one hand it should define all the elements which will fall within the scope of the agreement, and on the other hand it should also specify what remains outside the scope of the agreement. Such “negative” definition of the field is particularly important when the project partners wish to continue the research and/or development of side technologies that are outside the scope of the agreement. It should minimise the risk of possible conflict between the parties.

When defining the scope of the agreement, the parties should be careful not to propose more than they are technically able to deliver in expertise and resources, and should define any conditions under which they may subcontract portions of the work.

Background and foreground IP rights:

Before collaborating, the parties must define who is contributing what and who will receive what as a result of the work carried out during the collaboration.

Before entering into the formal collaboration, each party should prepare a list of patents, know-how, and more generally all intellectual property rights related to the field of the agreement and owned by the parties. This list of background IP rights will be attached as an exhibit to the agreement.

The parties may decide to contribute some background IP rights to the project. One possibility may be to grant the other party a non-exclusive licence for such background rights, to the extent that such rights are necessary for the use of the foreground rights. These rights will frequently be made freely available to the other partner for the duration and purposes of the collaboration project. In the case of background rights that are incorporated in products or processes emerging from the collaboration, partners will usually want to receive some form of consideration (usually through licensing arrangements).

The issue of ‘foreground’ rights, those which arise as a result of the project, is certainly one of the most sensitive. A simple and common solution is to award the developments and the corresponding foreground rights to the party that produced such development.

Where work cannot be attributed to one or the other party, the usual rule is that such developments are co-owned by the parties.

Co-ownership, however, frequently appears to be a potential source of conflict. The parties may therefore decide on a different allocation of the common work carried out during the course of the agreement.

One possibility, for example, is to allocate the results and developments to one or the other partner, depending on its specific field of business and/or its allocated specific territories.

In any event, the parties may decide that each partner may be granted a non-exclusive licence on the foreground rights owned by the other.

Management of the collaboration:

The collaboration will not function properly without clear management rules set out in the agreement.

Most importantly, there should be a clearly identified project leader, who will be responsible for overall project management.

Each party should also appoint a project manager, responsible for delivering that party’s contributions to the project.

Arrangement for effectively monitoring both parties’ progress against the project's milestones and objectives should also be defined. Regular progress reviews should significantly improve the probability of success of a collaboration project.

Protection of the generated IP:

The parties shall decide how they intend to protect the IP foreground rights that arise from the performance of the collaboration.

Most importantly, they should decide who will have the right to file patent applications, if there is any to be filed, for which countries, and which party will bear the costs of such application procedures.

The issue of maintenance of the granted IP rights should also be addressed: if one party decides not to continue to pay the maintenance fees, the other party should have the option to be assigned the said IP rights and to pursue their maintenance.

The parties should also co-ordinate possible litigation in relation to the protection of their IP rights against infringement by third parties, as well in relation to any infringement of third parties’ IP rights that the parties may be responsible for due to the execution of the common project: who will decide to start litigation and who will support the costs of such litigation? If damages are awarded as a result of the claim against third parties, who will receive such damages? Similarly, if damages must be paid as a result of an infringement of a third party’s IP rights, will the parties be responsible for payment in equal shares?