Joint developments can be good business and accounting decisions. Joint developments, or ventures, are strategic alliances between two or more individuals or entities to engage in a specific project or undertaking. Usually the individuals or entities enter the venture to gain individual benefits.

Some of the advantages that come from entering a joint venture or joint development are:

• Opportunity to gain new capacity and expertise
• Allow companies to enter related business or new geographic markets/ gain new technological knowledge
• Access to greater resources
• Sharing of the possible risks

One of the most important parts of a joint development is the agreement. Without an agreement properly outlining everyone’s roles and duties, things can get messy. Joint development agreements should contain the following:

1. Ground Rules
   1. Creation of milestones and a schedule for progress
   2. A term or expiration date for the joint development agreement
   3. Exclusivity
      1. Establishing limitations on whether one or both parties conduct research or development with any third parties
      2. Identify Group Leaders
         1. There should be certain people listed such as technical and business coordinators to manage and control the flow of information
         2. Payment of Expenses
            1. It should indicate what each party will be paying for the joint development
            2. Protection of Confidential Information
               1. It must assure that proper measures are taken to protect the confidential information of each party
               2. Level of Commitment
                  1. This should outlines the amount of resources each party will devote
                  2. Background Intellectual Property
                     1. If the new technology is being built around previously existing intellectual property of one of the companies, the company will need to decide if they are going to reserve their background rights from the agreement.
                     2. Ownership of New Intellectual Property
                        1. This is to determine who will own the new intellectual property created by the joint development.
                        2. Responsibility and Costs for Filing Applications
                           1. Patent applications are generally the first thing to happen in a joint development project. The details of this need to be outlined. Will the parties:

                                                               i.      File and prosecute their own patents applications?

                                                             ii.      File and prosecute jointly owned patent applications?

                                                            iii.      Share expenses for patent prosecution?

                                                           iv.      Have the right to review each other’s patent application before they are filed?

1. Dispute Resolution Mechanism
   1. This should deal with breaches and disagreements that come up

Creating an agreement that will work for both parties isn’t an easy task. InnovaCounsel attorneys have experience creating joint development agreements for their clients. They can create an agreement that works for everyone involved and will be mutually beneficial.