Has your IP been created in collaboration with a third party?

4 mins

Before entering into a collaboration with a third party, it is worth considering the ownership of any resulting intellectual property (IP).

This problem is often approached by considering background and foreground IP. Background IP refers to the pre-existing IP that a party already has and brings to the collaborative project, while foreground IP is the IP generated during the collaboration.

It is important that the boundaries of your background IP are clearly defined and remain owned by you after completion of the project. Defining the background IP can be more complex than it sounds: one way of establishing this is by filing a patent application (or multiple applications) to encompass all of your ideas and act as a public statement of ownership. A patent application does not require a working prototype of an invention; therefore, it may be possible – to some extent – to also include any forward-reaching ideas of what you hope the collaborative project will look like.

Another way to establish your background IP is to record and circulate detailed minutes of all collaborative discussions. These records can then act as evidence of the nature and scope of your collaboration.

You may also wish to negotiate the terms of ownership of any foreground IP ahead of the collaboration by considering what each party hopes to gain. A common position is co-ownership of IP between the collaborators, and you should be wary of entering into any collaboration where all foreground IP will be owned exclusively by the third party. However, where possible, co-ownership of IP should be avoided if there is an opportunity to negotiate better terms. For example, if you are collaborating with a research centre or university, you may consider an agreement in which you own the foreground IP, however, in return the research centre is granted an indefinite licence to use the IP for research purposes. Similarly, you could consider restricting ownership of the foreground IP for use in different commercial fields, or regional territories.

Whilst it is possible to negotiate a transfer of rights agreement between you and the third party to clarify ownership of joint IP retrospectively, it can be time consuming and expensive to unpick all the issues. IP negotiations are typically more constructive ahead of a project – i.e. before time and resources have already been committed.

Mathys & Squire offers IP agreement drafting services for businesses ranging from early-stage startups to multinational organisations – for more information, please get in touch with a member of our team.

The above is not intended to provide legal advice.  If you wish to seek legal advice on any of these issues, please get in touch with a qualified attorney .

Written by: Andrew White & Jessie Harrison