In the wake of the COVID19 pandemic many businesses will be reassessing their business practices, looking to reach new audiences and increase profitability in innovative ways. Commercial collaborations are a great way for businesses to come together on a joint project and share resources and areas of expertise. The combined effort will also have the added benefit of appealing to an increased client base and potentially generating new revenue streams. However, sharing information and resources may also present risks and it is important that businesses consider these carefully before embarking on a collaboration.
So what are the key points to consider before embarking on a commercial collaboration?
- Confidentiality. Enter a non-disclosure agreement before sharing any confidential information with the collaboration partner. Failure to do so may result in the other party using the information in a commercially competitive way;
- Shared values? Perform due diligence on your potential collaboration partner. Are they reputable in their chosen sector? Do their products and services meet the standards required for the joint project? Failure to ensure that the collaborating partner is reputable may result in a dilution of the value associated with your own brand;
- How long? Consider the period that will be required to develop the combined products or services. The parties will need to ensure that they agree a suitable time period for developing the products/services and launching this in the relevant market;
- Financial terms. Who will bear the costs of developing the combined products/services? How will the parties be remunerated for their respective contributions to the collaboration? One party may receive a lump sum or royalty payment in exchange for their contribution to the joint project;
- Protect existing IP rights. Ensure that your intellectual property rights (trade marks, design rights and possible patents) are protected, where possible, prior to commencing the collaboration. It is vital that the parties preserve their interest in any pre-existing intellectual property rights as this will be important to the ongoing operation of their business outside of the collaboration;
- Ownership of new IP rights. Consider the treatment of any jointly created intellectual property rights. The parties will need to discuss and agree on the ownership and licensing of any jointly created intellectual property rights. This agreed position will also need to comply with competition law requirements;
- Data sharing. Discuss and agree a strategy for the sale and distribution of the combined products/services. If this strategy involves sharing customer lists, the parties will need to ensure that this transfer of personal data complies with the requirements set out in the General Data Protection Regulation (“GDPR”).
Once the above points have been considered and the commercial terms have been agreed, the parties should then look to formalise these arrangement in a written collaboration agreement. A written collaboration agreement will set out the agreed terms and will help to avoid any disputes arising at a later date. Given the recent COVID19 outbreak, it is also prudent to ensure that the collaboration agreement deals with events occurring outside the parties’ control and how this will impact on the parties’ obligations.
Murrell Associates is experienced in advising on collaboration agreement and has recently advised Women + Waves on its collaboration with H&M. Rachel Murphy said:
“This is our first international brand collaboration and it was an easy decision to choose to work with Murrell due to previous commercial law experience with the company, which had gone very well. Rebecca was with us every step of the way and we couldn’t compliment her enough for the fantastic support through the process. We were dealing with both UK and Swedish law throughout the contract, Rebecca and her team made sure that it was as stress free as possible, we will definitely work with Murrell again in the future.”
Get in touch
If you would like to discuss any of the issues raised in this article, or would like assistance with a collaboration, Rebecca Anforth (Senior Associate), would be delighted to hear from you. You can reach Rebecca on 01872 226999 or you can email her firstname.lastname@example.org.
Murrell Associates LLP 09 September 2020
The information provided in this article is a summary for general information purposes only and does not constitute legal or other professional advice and cannot be relied upon as such. Any law quoted in this article is correct as at the above date. Appropriate legal and financial advice should be sought for specific circumstances before any action is taken.