Collaboration Agreements

Collaboration Agreement Solicitors

From a legal viewpoint, the first step in advising clients on a business collaboration is the right structure. Sometimes, it’s better for the parties to just enter into a collaboration agreement between their existing companies. In other cases, it may be better to set up a new joint venture company with the parties being shareholders in the new business.

We often set up a collaboration company or joint venture vehicle for carrying out the specific purposes and trading activities of  a business collaboration.

Intellectual Property Collaboration

An increasingly common type of business collaboration is in the IP/IT sector.

If the intention is to sell the intellectual property or any specific assets created by the collaboration a separate company will often make this easier. Liabilities created within the collaboration company can be ring-fenced and protected from the creditors of a particular contributor.

How the shares within the company will be managed and dealt with is often set out in a shareholders agreement. This sits alongside the provisions of a collaboration agreement. The shareholders’ agreement governs the relationship between the collaborators, whereas the collaboration agreement governs their relationship with the works.

The risk of no collaboration agreement

The default position is that each co-owner is entitled to an equal share in the works created through the project and the intellectual property rights subsisting in them. This means that each co-owner may use them without the consent of, and without accounting to, the other co-owners. Not only is this often unfair, but it also harms your business.

Key clauses in collaboration agreements

Business collaborations may take the form of a joint venture or a more loose arrangement. If the collaboration involves significant investment of time and resource by either or both parties as opposed to a looser arrangement to  work together for mutual benefit, key issues are likely to include :

  • defining and detailing the contributions required of each business in terms of time to be spent, allocation of staff and financing.
  • decision making  and control – setting out the mechanism for strategy, marketing, pricing and so on.
  • non-competition – ensuring that neither of the collaborating parties act in a way which undermines or damages the success of the collaboration project.
  • termination and events of breach – important clauses in all agreements.
  • exit – is there an agreed target which would trigger the collaboration concluding? Can either party exit unilaterally? is there an intended plan, if the collaboration is a joint venture, to sell the joint venture business?

Each situation is different. The above are just a small number of examples. If you need a collaboration agreement drafted or reviews or need advice on the best structure for a business collaboration, our lawyers are experienced in this area.

Infringement, enforcement and disputes

Collaboration agreements are best thought of as commercial ‘pre-nuptial’ agreements – you hope you never have to take it out of the drawer, but just in case you do, it helps to minimise disputes and the fallout from them.

Where a dispute does arise, it is treated as a breach of contract. We aim to assess and resolve issues quickly and minimise commercial damage.

Our  solicitors approach is practical, experienced and cost-effective. Please do get in contact.

John Deane

John solves commercial problems for SMEs and their investors. It is said that he is unbelievably practical and seasoned in finding the right solution without too much fuss. He has an established reputation in the technology, art and media industries.

Let us take it from here

Call us on 020 7438 1060 or complete the form and one of our team will be in touch.