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“I Get by with a Little Help from My Friends” Legal Issues Related to Corporate Collaboration, Alliances, Sponsorships, Joint Ventures, and Licensing Mark.

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Presentation on theme: "“I Get by with a Little Help from My Friends” Legal Issues Related to Corporate Collaboration, Alliances, Sponsorships, Joint Ventures, and Licensing Mark."— Presentation transcript:

1 “I Get by with a Little Help from My Friends” Legal Issues Related to Corporate Collaboration, Alliances, Sponsorships, Joint Ventures, and Licensing Mark Scheinblum, Jacki Hartt, Tom McThenia, and Rebecca Forest

2 Scenario schematic Yoko Wife and heir of John Liverpool Tech Owner of John’s patent John Paul Co. Licensee of John’s patent from Liverpool Tech Owner of patent application on improvement on John’s composition (Linda) Owner of trade secret method of making and using (Heather) Co-owner of software? George, Inc. Distribution network Marketing experience Brand Ringo, LLC Service company S. Best Co. Former partner of Paul Co-owner of software?

3 Scenario schematic (patents) Yoko Wife and heir of John Liverpool Tech Owner of John’s patent John Paul Co. Licensee of John’s patent from Liverpool Tech Owner of patent application on improvement on John’s composition (Linda) Owner of trade secret method of making and using (Heather) Co-owner of software?

4 Inventions John’s invention patented –Claims composition A + B Linda’s invention patented –Claims composition A + B + C; or –Claims composition A + C Heather’s invention not patented Paul/Best software invention not patented

5 Ownership of Inventions Absent an agreement or obligation to the contrary, inventor owns patented invention –John had employment agreement and assigned to Liverpool Tech –Linda had no employment agreement and refused to assign or to sign inventor declaration

6 Employment Agreement Employment agreement should spell out that rights in all inventions belong to employer Employment agreement should also spell royalty terms or other award to be given to inventor

7 What If Inventor Refuses to Sign Patent Application Papers? Procedure in Patent Office to petition to proceed without inventor signature Must prove that inventor had obligation to assign and that inventor refused to do so

8 When Does Inventor Have Obligation to Assign? When invention is within scope of employment and company has IP policy If invention not within scope of employment, can be tricky Should have had IP policy, IP agreement, or employment agreement!

9 Ownership of Joint Inventions Absent an agreement to the contrary, if joint invention, all inventors own full, undivided interest and can act independently to exploit invention

10 Improvements to Patented Invention Do they patentably define over original invention? Would practice of improved invention infringe original patent?

11 Trade Secret Protection Trade secrets –Protect valuable confidential information and “know-how” that gives a business a competitive advantage –Requires “reasonable secrecy” Can be lost by inadvertence, negligence, intentional disclosure, independent discovery, including reverse engineering

12 Trade Secrets “Reasonable secrecy” measures used to protect trade secrets include employee nondisclosure and/or non-compete agreements, physical security of buildings, equipment and computer systems, “proprietary” stamped on products and documentation containing trade secrets How could Paul Co. have a third party use trade secret method of manufacture?

13 Scenario schematic (software and patent license ) Yoko Wife and heir of John Liverpool Tech Owner of John’s patent John Paul Co. Licensee of John’s patent from Liverpool Tech Owner of patent application on improvement on John’s composition (Linda) Owner of trade secret method of making and using (Heather) Co-owner of software? S. Best Co. Former partner of Paul Co-owner of software?

14 Protecting Software Copyright protection –Arises automatically when an original work of authorship is fixed in tangible medium of expression (17 U.S.C.) –Idea vs. expression – low creativity –Derivative works

15 Protecting Software Copyright protection/assignment for software developed by third parties –Was there a written “work for hire” or assignment with S. Best Co.? –Object and copyright separate (object and source code copyright ownership can be distinct from license use rights)

16 Software Ownership/Licensing Was software developed for Paul Co. to own code or have license from S. Best Co.? ASP (software as a service) Protecting your software (patent, trade secret, copyright)

17 What Is the Scope of Paul Co.’s Patent License from Liverpool Tech? Does Paul Co. have the right to make improvements to LT’s patented invention? Who owns the improvements? Does Paul Co. have the right to exercise the license within a JV? Is Paul Co.’s manufacturing method or improved formulation allowed under the license or infringe the patent? Does LT have any claim to royalties from JV activities?

18 Scenario schematic (corporate) Paul Co. Licensee of John’s patent from Liverpool Tech Owner of patent application on improvement on John’s composition Owner of trade secret method of making and using Co-owner of software? George, Inc. Distribution network Marketing experience Brand Ringo, LLC Service company

19 Issues To Consider In Entering In Alliances/Joint Ventures Purpose and scope of joint venture Initial and future contributions by partners Funding needs Regulatory Issues Management – rights and obligations, general and in day-to-day operations

20 Issues To Consider In Entering In Alliances/Joint Ventures Tax issues Distributions of revenues Ownership of, and/or rights to, joint venture assets Termination of joint venture Resolution of disputes

21 Funding For Future Needs How do you address the funding needs of the JV? What if additional capital is required?

22 Management What rights does non-managing partner have with respect to JV manager’s decision making? Audit and inspection rights

23 Management What matters require approval of both partners? –Major contracts –Incurring debt –Approval of budgets –Hiring and firing of personnel –Change in scope of business/new product lines –Obtaining additional funding –Admitting new partners

24 Other Operational Issues What milestones apply to JV? If the JV is unable to satisfy those milestones, what is the consequence? –Loss of exclusivity –Change in management –Termination of marketing agreement –Other

25 Product Issues Who sets pricing? Who is responsible for quality control (of product, on one hand, and of marketing materials and process, on the other)? How is liability addressed among the parties with respect to defective installation, defective product, etc.?

26 Termination Can either party transfer their interest to a third party? –Terms for transfer/sale Right of first refusal to buy out other partner Put and call rights

27 Termination If the JV is terminated, how is it unwound? –How are the assets of the JV distributed in termination? –Non-competition –Rights to customers –Non circumvention

28 Structuring an Alliance Alliance agreements –Supply/distribution agreements –Technology/product license agreements –Research and development agreements –Separate new entity joint venture agreements Equity investments by one entity in another Debt investments Combination agreements (mergers, etc.)

29 “The End” –Abbey Road

30 Contact information Mark Scheinblum, Attorney – ; Dr. Jacki Hartt, Patent agent – ; Tom McThenia, Attorney – ; Rebecca Forest, Attorney – ; Mailing address: –Lowndes, Drosdick, Doster, Kantor & Reed, P.A., 215 North Eola Drive, Orlando, FL 32801


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