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Understanding Co-Development Agreements

Co-Development agreements, also known as joint development agreements (JDAs), can be vital to development, research, or commercial introduction of products and services. Two or more companies can often accomplish what would be impossible – financially, technologically, or otherwise – for a single company to manage. However, co-development agreements are often drawn between companies that would otherwise be competitors. As such, careful negotiation, including planning for the ultimate dissolution of the agreement and ownership of intellectual property, is needed.

Negotiating a Co-Development Agreement

Co-development agreements establish which company owns which aspect of the intellectual property in question. With ownership comes responsibility for patent prosecution and mounting defenses against allegations of IP infringement. On the other hand, ownership also grants control over the ultimate disposition of the intellectual property, including licensing and other potentially lucrative arrangements.

Understand the Meaning of Joint Development

Many joint development agreements fall into a default joint ownership agreements. This can be problematic; specifically, any joint owner can license or commercialize the work product of the agreement without obtaining consent of other co-owners, and without sharing revenue with them. The only way to avert this undesirable situation is through negotiation of specific agreements of ownership or assignment at the outset of the agreement.

Consider Downstream Value and Use

It is also important to realize that negotiating JDAs is essentially a one-time opportunity. Problems concerning the agreement relating to each party’s rights to the intellectual property involved can arise long after the agreement has been executed, and even after the agreement has been terminated. However, odds are slim to none that the partners of a JDA will be willing to renegotiate the agreement after the fact, especially in the face of disputes involving existing or new intellectual property. Therefore, an essential element of successful JDA negotiation is to ensure a clear understanding of ownership and rights regarding downstream value and use, as well as negotiating or limiting immediate IP ownership and rights.

Evaluate Risk

Many JDA agreements involve trade secrets or other confidential information. It is essential to negotiate and execute iron-clad nondisclosure and confidentiality agreements before disclosing such sensitive data. Vetting potential JDA partners is also a must. Check out the general reputation, its products, and its personnel to gauge trustworthiness. That isn’t demonstrating suspicion – it’s simple due diligence.

Co-development agreements can be complex and difficult to negotiate. Peacock Law P.C. can negotiate a Co-development agreement that will ensure that you can generate value from your great ideas.

For more information about co-development agreements, visit our contact form, or give us a call today.