International Collaborations Are Not Without Risk to IP Value

By Mike Moberly, Executive Editor, BVR IP ValuePublishing

With increasing frequency, collaboration and cooperation are the themes being played out in global business transaction environments, particularly since the former "conglomerate model" is rapidly fading.  Collaboration and cooperation facilitate the increasingly intertwined and interdependent nature of international business.

In fact, many business transaction specialists argue cooperation and collaboration (between companies and countries) are no longer options nor choices, rather they are necessities to successfully forging business relationships and inking potentially profitable business agreements.

It’s certainly not a stretch to state that attitudes/cultures of cooperation and collaboration are essential preludes to business development and reaching win-win agreements.  While that’s the new reality from which there’s no turning back, absent some catastrophic misstep, it remains a prudent business practice to consider how extensive cooperation and collaboration affects the protection (safeguarding) of either party's intellectual property, i.e., patents, trademarks, copyrights, trade secrets and other forms of proprietary (adds competitive advantage) information and intangible assets.

Collectively, this may well speak volumes about how country and/or trading group (e.g., EU, etc.) intellectual property protection regimes will be framed in the years to come, notwithstanding the role of WTO (World Trade Organization) in its capacity as a mediator and/or adjudicator to IP-related disputes and challenges which will, it’s not difficult to assume, be ratcheted up in their (WTO’s) agenda.

To be sure, the processes and procedures (intangibles) put in place to make international business collaborations possible and profitable are also being formulated to make the collaborating firms more competitive, and that’s a good thing. 

A rather large question remains, at least it should, throughout all the well-intentioned collaboration: will companies be able to effectively safeguard their hard-earned and often valuable intellectual property (and other intangible assets) through existing IP regimes?

The basis for this question, of course, evolves from the business reality that IP and intangibles are now, and have been for some time, routine fixtures (in play) in most business transactions.  That’s because 65+% of most companies' value, sources of revenue, and building blocks for growth and expansion today either lie in or evolve directly from intangible assets.  IP protection (and safeguards), then, become particularly relevant in instances when a collaborating business partner is headquartered in a country in which their law essentially requires relinquishing the outside business partner’s IP in business transactions executed in that country as requisite for doing the deal.

So, while business cooperation and collaboration are generally positive, and there’s little, if any, horizontal thought this trend will relapse, business transaction strategists must be considering how deals can be framed to (a) retain the coveted win-win outcomes, (b) provide the foundation for future business relationships, while (c) sustaining some semblance of control and ownership over a company’s IP and proprietary competitive advantages/intangible assets without consistently factoring into each deal the probability and/or the cost of protracted litigation related to the possibility of infringement or misappropriation.