Counsel to Counsel - January 2008 - (Page 10) best practices DEVELOPING A TECHNOLOGY AGREEMENT: Getting Solid Information Up Front MARJORIE M. GOUX | THE CLOROX COMPANY Corporate Counsel Marjorie M. Goux provides worldwide licensing legal services to The Clorox Company based in Oakland, Calif. Marjorie recently participated in a Counsel to Counsel forum on intellectual property. She can be reached at marjorie.goux@clorox.com. implementation Corporations regularly partner with outside specialists or firms to develop technology for new products, materials and processes, and packaging. Unfortunately, sometimes legal counsel comes to the transaction late or the initial development work begins before legal agreements are ratified. This can compromise negotiations and possibly jeopardize the development process. steps situation Inside counsel must ensure early involvement and internal alignment on the proposed agreement, as well as alignment with the partner on all business terms and agreements, before any development work begins. in-house counsel • Have a technology agreement process in place that includes legal counsel throughout. • Educate business partners on the value of the process. • Execute a non-disclosure agreement before exchanging confidential information with an outside partner. • Establish a cross-functional team that aligns on business objectives for the innovation partnership and proposed terms of agreement. • Negotiate and close the agreement quickly, before development work begins. • Actively manage the agreement and relationship. challenge historical patenting and litigation behavior. Others look for potential overlaps with existing agreements or internal R&D activities. Finally, the team as a whole must meet again to refine alignment on a non-binding term sheet, internally known risks and fallback positions. Then negotiations with the partner can begin on the final agreement. Team members have assigned responsibilities for monitoring dates and legal obligations following the execution of the agreement. Establish a technology agreement process that requires research and development (R&D) and technology sourcing/partnering personnel to contact the legal department prior to initiating any project with an outside partner. If possible, have legal check-ins embedded in the product development project tracking system. Implement an internal training program that reinforces the technology agreement process. approach adopted Meet with R&D and partnering to discuss the project’s parameters and execute an appropriate non-disclosure agreement. Next, schedule a project-team meeting involving R&D, partnering, patent legal counsel, licensing counsel, and, sometimes, finance and procurement to internally align the scope of the proposed relationship and the agreement to be reached. The team identifies everything from project time lines to work product acceptance criteria. For example: What criteria will be used to determine success? What if the work product doesn’t meet the criteria? Are any regulatory or other governmental approvals required? Who will own resulting innovations and related IP? Who will prosecute and enforce any new patents? Will licenses change if the agreement is terminated early? Each team member takes away due diligence responsibilities. Some analyze the partner, including existing relationships, financials and A successful outcome will be demonstrated by: 1) an appropriate degree of ownership across the team and alignment with business objectives, 2) legal counsel involvement throughout, 3) a vibrant and productive partnership and 4) a technology exclusivity position that helps insulate the corporation from competition. measuring success future issues to consider Recent decisions and some proposed patent reforms reflect a trend that in effect reduces patent owner strongholds. It is more important than ever to establish strong patent portfolios and a solid working relationship with external partners beyond the agreement. 10 LexisNexis® Martindale-Hubbell®
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