Introduction and Purpose:
Standard Operating Procedures (SOPs) are essential for a strong IP strategy. The following provides a general framework to enable deep tech companies to adequately minimise IP risks when entering into joint ventures or strategic partnerships. You are encouraged to adapt this SOP framework to the unique circumstances of your company.
Procedure:
Ensure all IP owned by the deep tech company prior to entering into the agreement is accounted for:
- Ensure there is a documented (e.g., in excel spreadsheet or equivalent) and updated list and description of all IP assets owned by the company, including patents, trademarks, copyrights, trade secrets, and any other proprietary technology or know-how.
- Ensure documentation includes updated details of each IP asset, such as registration numbers, filing dates, jurisdictions, and any relevant expiration or renewal dates.
- Ensure the company has filed all necessary patent applications and documented and secured all trade secrets prior to moving forward with the joint venture or strategic partnership.
- Store all documentation in a centralised and secure repository following the company’s file and document naming conventions and provide the relevant access permissions.
Initial research on potential partner:
- Conduct initial research and pre-screening to assess the reputation, credibility, and track record of potential joint venture or strategic partners. Check their website, online presence, customer reviews, testimonials, and industry reputation to gather preliminary information about their IP protection practices.
- Working with legal counsel, carefully review any publicly available privacy policies, data retention policies, IP protection and assignment policies, etc.
- Store all documentation in the repository following the company’s file and document naming conventions.
Initial research specifically on potential partner’s patent portfolio:
- Working with legal counsel / patent attorney, search for and analyse the partner's IP portfolio (patents, patent applications), ensuring there are no conflicts or overlaps with the company’s IP assets.
- If there are conflicts, consider discussing these with the potential joint venture or strategic partner to see if there are workable solutions (such as negotiating a cross-license agreement prior to entering the official joint venture or strategic partnership).
- Store all documentation in the repository following the company’s file and document naming conventions.
Comprehensive research on potential partner:
- Working with legal counsel, prepare a comprehensive questionnaire or request for information (RFI) to collect specific details about the potential joint venture or strategic partner’s protection policies, practices, and measures.
- Include questions regarding their approach to trade secret protection, data security, employee background checks, confidentiality agreements, compliance with IP laws, and incident response procedures.
- Explain that signing off on the working agreement will require an evaluation of the joint venture or strategic partner’s physical / cyber security.
- Review and evaluate the responses provided by the potential joint venture or strategic partner to the RFI.
- Assess the clarity, completeness, and consistency of their answers, and identify any red flags or areas of concern to address with the potential joint venture or strategic partner.
- Verify their business registration, litigation history, and any past allegations or disputes related to IP infringement or trade secret theft.
- Verify the qualifications, credentials, and reputation of key personnel involved in handling sensitive IP.
- Pay particular attention to financial stability, because it is important the potential partner is not an insolvency risk.
- Store all documentation in the repository following the company’s file and document naming conventions.
Evaluate potential partner’s physical security measures:
- If applicable, evaluate the physical security measures at the potential joint venture or strategic partner’s premises, especially if they have access to sensitive IP-related facilities or equipment.
- Assess their access control systems, visitor management processes, surveillance systems, and safeguards against unauthorised entry or data theft.
Evaluate potential partner’s cyber and data security measures:
- Assess the potential joint venture or strategic partner’s IT security measures and protocols.
- Review their network security, data backups, and employee access controls.
- Review their data encryption practices, vulnerability management processes, incident response procedures, and employee cybersecurity awareness programs.
- Find out if the potential partner has previously experienced a major data breach and the quality and timeliness of the response.
- Request documentation or certifications related to their compliance with relevant security standards.
Agree with the potential joint venture or strategic partner in writing and to be included in the contract:
- Clearly define the ownership and usage rights of each party's IP assets prior to entering into the joint venture or strategic partnership.
- Necessary confidentiality and non-compete clauses.
- An agreement on how filing for patent applications and / or documentation, protection, ownership and use of trade secrets will be managed for jointly created IP. Ensure any foreign filing license requirements are worked out and accounted for.
- An agreement on how the parties will decide the best IP type(s) to utilise for jointly created IP, deadlines for decisions on this, and who will be responsible for managing the relevant processes.
- An agreement on the mechanism to decide whether a particular piece of IP is jointly created or created by one of the parties.
- An agreement that allows each party to independently file IP that was developed solely by that party during the joint venture or partnership.
- An agreement that any IP independently created and owned by just one of the parties as a result of the joint venture or partnership will be automatically licensed on favourable terms for the other party to utilise. Agree on these terms.
- Specify any restrictions or limitations on the use, transfer, or licensing of IP assets by either party.
- An agreement on an auditing procedure to ensure each party remains compliant.
- An agreement on how jointly developed IP assets will be managed and survive the termination of the joint venture or strategic partnership
- An agreement on how potential IP disputes can be amicably resolved.
- An agreement on what happens to relevant IP if a party becomes insolvent, is acquired or merges with another entity, or pivots to a different business sector.
Disclaimer: this article is for education purposes only and should not be construed as legal or financial advice.
