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Joint Venture Assets and Intellectual Property Contribution


A quick reference guide on Contribution of Joint Venture Assets by respective parties and Intellectual Property issues to watch out for in relation to a Joint Venture.

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Document Description

The document titled 'Joint Venture Assets and Intellectual Property Contribution' is a comprehensive guide that provides information and guidance on the transfer of assets and intellectual property in a joint venture. The document begins by explaining the different forms of joint ventures, including joint venture companies, partnerships, and contractual joint ventures. It highlights the importance of understanding the form of the joint venture as it affects the transfer of assets and IP rights.


The document then delves into the contribution of assets to a joint venture company. It emphasizes the need to map the contributions and determine the valuation of assets to ensure fair allocation of equity. It discusses various considerations such as intellectual property, employees, enforcement, warranties, tax/stamp duty, timing of contribution, formal transfers, and formalities of execution.


Next, the document focuses on the contribution of intellectual property to a joint venture. It addresses key issues related to ownership of existing know-how or inventions, ownership of joint venture results, protection of joint venture results and intellectual property rights, obligations to maintain and defend patents and know-how, freedom to use joint venture know-how, restrictions on exploitation, and technology transfer.


The document provides detailed guidance on each aspect of intellectual property contribution, including general considerations, technology transfer, trademark licenses, and technology licenses. It explains the importance of defining intellectual property rights to be assigned to and owned by the joint venture, the consideration for contributed technology, grant-back rights, maintenance of registered rights, shared intellectual property, arising intellectual property, future intellectual property of the parties, warranties/indemnities, and termination.


Finally, the document covers trademark licenses and technology licenses. It discusses exclusivity, royalties, scope, control/directions on use, form and style, acknowledgement, infringements, conduct of claims, and termination.


Overall, this document serves as a comprehensive guide for individuals and businesses involved in joint ventures, providing detailed information and guidance on the transfer of assets and intellectual property.

How to use this document?

1. Identify the form of the joint venture: Determine whether the joint venture will be a joint venture company, partnership, or contractual joint venture. Consider the implications of each form on the transfer of assets and IP rights.

2. Map the contributions and valuation: Fairly allocate equity by mapping the contribution of assets by each joint venture partner. Determine the valuation of assets based on a cost-based formula or market value, agreed between the parties or fixed by an independent valuer.

3. Consider intellectual property: Identify any intellectual property rights being transferred or made available as part of the asset/business transfer. Clarify the rights and obligations of the parties in relation to intellectual property rights.

4. Address employee considerations: Recognize that a transfer of a business or change of control will affect employees. Understand the rights and obligations for the employer in such situations.

5. Understand enforcement capabilities: Determine whether the joint venture will have the ability to bring legal action against the transferor party or if the transferor party can block such action.

6. Establish warranties: Define the nature of warranties to be given by the seller, considering the subject matter of the transfer and the negotiating positions of the parties. Set realistic time limits for claims and liability limits.

7. Plan for tax and stamp duty: Consider tax planning to establish the most cost-efficient method for transferring assets to the joint venture. Assess the cost of establishing the joint venture.

8. Consider timing of contribution: Carefully consider the timing of asset transfers, taking into account conditions precedent, regulatory approvals, and third-party consents. Determine provisions for delayed completion of assets if necessary.

9. Address formal transfers and execution formalities: Identify any ancillary contracts required for the asset transfer arrangements, such as formal transfers of land or assignments of intellectual property rights. Check the formalities of execution, including the need for notarization.

10. Define intellectual property contributions: Clearly define the intellectual property rights to be assigned to and owned by the joint venture. Consider a field of use definition and compensation for contributed technology.

11. Establish grant-back rights: Determine whether there will be grant-back rights for the joint venture party to use the joint venture intellectual property in its independent activities, subject to non-compete provisions.

12. Address maintenance obligations: Establish any obligations on the joint venture to maintain registered rights and offer to reassign them to the relevant joint venture party if the joint venture ceases to maintain such rights.

13. Clarify shared intellectual property: Determine the need for a license to the joint venture by each party in respect of any shared intellectual property. Clarify responsibilities for prosecution, maintenance, protection, and cost-sharing.

14. Address arising intellectual property: Clarify the rights and obligations of the parties and the joint venture in relation to intellectual property arising in the course of the joint venture's operations. Determine whether each joint venture party will be granted a license to use the arising intellectual property.

15. Consider future intellectual property: Address the generation of future intellectual property by the parties and establish obligations to keep each other and the joint venture informed. Determine the terms of any license to the joint venture for future intellectual property.

16. Understand warranties and indemnities: Clarify the scope of any warranty or representation to be given by a joint venture party regarding the validity and performance of transferred intellectual property. Take such rights on an 'as is' basis.

17. Plan for termination: Address the position on termination of the joint venture and establish principles for voluntary sale, termination due to circumstances, and mutual termination/break up. Consider the rights and obligations related to intellectual property in each scenario.

18. Address trademark licenses: Determine the exclusivity of the license, royalties, scope, control/directions on use, form and style requirements, acknowledgement, infringements, and conduct of claims. Establish a clear right to terminate the license in specified events.

19. Consider technology licenses: Describe the technical and engineering information and know-how to be provided. Specify exclusivity, developments, right to use, fees, and obligations related to non-compete provisions.

20. Review and revise: Regularly review and revise the document to ensure it remains up to date and reflects any changes in the joint venture or relevant laws and regulations.

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