What is the difference between a joint venture and a partnership? How can you protect your intellectual property and patents if you decide to enter into a joint venture agreement? Here are some suggestions for small business owners who want to take this step.
Joint Venture Agreements Vs. Partnership Agreements
A partnership is a type of business arrangement where more than one party enters into an agreement to share a business together, including any profits or liabilities. A joint venture is similar in that two parties are coming together for a business arrangement; however, in a joint venture, the companies are separate entities.
For example, if two men decide to open a print shop together, they may set it up as a partnership. On the other hand, if one man owns a print shop and another runs a marketing company, they may enter into a joint venture agreement to complete a long-term marketing project that requires a great deal of printing. In the first case, the two men own the business together. They share profits, liability, and intellectual property by virtue of the partnership agreement.
In the second example, the two men each own their own business. The joint venture agreement dictates how they will work together on specific projects, how the profits from those projects will be shared, and what work is assigned to each company. But what if proprietary software is developed to complete the project or a new piece of equipment is built to complete the project more efficiently?
How a Joint Venture Agreement Affects Intellectual Property
It is vital to work out intellectual property matters before a joint venture is entered into. Otherwise, it can lead to long, drawn-out legal battles regarding ownership of intellectual property. Ownership of anything developed in tandem should be understood beforehand, and patents should be filed immediately as agreed upon.
One way to protect your business is to limit a company you enter into a joint venture with from gaining access to all of your trade secrets. A joint venture may lead to another party gaining access to source code for your software or other sensitive information. If this intellectual property is not patented, it could lead to loss of a competitive advantage.
An Intellectual Property Lawyer for Small Businesses
To learn more about how to protect your intellectual property when entering a joint venture agreement in California, contact the Pokala Law Firm. We’re a small business that protects small businesses. Call 844-695-1487 to get started today.