Structuring Joint Development Agreements

What is a Joint Development Agreement?

When drafted correctly, a Joint Development Agreement (JDA) serves as an important tool to cover collaborative innovation projects among technology partners. Whether a startup is teaming up with a blue-chip company or two R&D institutional entities are pooling their expertise, a well-structured JDA sets expectations early, in writing, and reduces the risk of later disputes.

Below are some practical considerations for structuring JDAs to properly allocate rights, distinguish background versus foreground intellectual property, and establish clear commercialization pathways.

If you or your company would like to discuss drafting JDAs, please contact A.J. Zottola or Ben Myers.

Clarify the Purpose and Scope of the Collaboration

Begin with a precise definition of the project scope—what's being developed, the intended objectives, and key milestones. Parties typically define this project scope as the "Collaboration" or "Project." Clear project scope language reduces ambiguity over the parties' respective contributions and ownership of developments from the project.

Background IP vs Foreground IP

To avoid disputes on ownership and license rights relating to the joint development project, both Background IP and Foreground IP should be defined.

Background IP generally consists of preexisting proprietary technology, know-how, code, patents, data, and other intellectual property that a party brings into the collaboration. The agreement should expressly confirm that each party retains ownership of its Background IP and should also carefully structure permitted uses/licenses during and (if permissible) after the project.

Foreground IP refers to new intellectual property created during the joint development project. The agreement should clearly define what constitutes Foreground IP and allocate ownership deliberately (e.g., whether sole ownership or joint ownership, and any applicable license-back rights) rather than relying on default legal rules under the IP regimes. In addition, the parties should also allocate responsibility for patent prosecution, maintenance, enforcement, defense, and associated cost sharing for any Foreground IP.

Any license provisions (e.g., under Background IP or Foreground IP) should address exclusivity, limitations, royalty structures, sublicensing rights, and whether the licenses survive termination.

Commercialization Pathways

JDAs often serve as a stepping-stone to future commercial arrangements between the parties to the collaboration, such as manufacturing, supply, or distribution agreements. In structuring the licenses noted above, consider including rights of first negotiation or refusal, milestone-triggered commercial rights, or carefully tailored exclusivity provisions for Foreground IP. Revenue-sharing models, cost allocation, and commercialization obligations should also be addressed to ensure a clear pathway from development to market.

Confidentiality, Documentation Practices, and Dispute Resolution

Robust confidentiality provisions should be included to protect shared Background IP and jointly developed results/Foreground IP from loss of IP rights due to public disclosure. And clear documentation protocols (including invention disclosures and contribution records) can be critical in establishing ownership and resolving disputes. In this regard, the parties should establish a general dispute resolution process to handle any disputes that may arise during the term of the JDA, including disputes involving IP ownership. But in doing so, ensure that any dispute resolution process expressly excludes a party seeking equitable/injunctive relief.

Key Takeaways for Structuring Joint Development Agreements

Define any Background IP and Foreground IP with specificity. Furthermore, ensure that any licenses under Background IP are tied to the scope of the joint development project. And clarify post-termination rights on commercialization and any continuing licenses. Finally, include dispute resolution mechanisms that are appropriate for the collaboration.

To receive more Tech Contract Quick Bytes, be sure to subscribe. Click here to learn more about Venable's IP Tech Transactions services. Looking for tech contract support? Our Contract Concierge provides clients with access to a dedicated team of Venable's experienced tech, IP, and privacy attorneys to assist with contract demands, drafting, and negotiation.