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Technology-Based Joint Ventures

By Richard Raysman and Peter Brown
April 30, 2004

Technology-based joint ventures are subject to rapidly changing technical standards, fluctuating markets and an emphasis on intangible services. But with careful legal planning, the joint venture can be an extremely effective vehicle for bringing together technology companies wishing to tap each other's intellectual property assets, often allowing these parties to reach new markets or expand existing relationships.

In a joint venture, each of the joint venture parties (or, co-venturers) contributes something of value to a newly formed entity, one designed to oversee the new business endeavor. Such an arrangement allows multiple parties access to pooled capital, technical, management and intellectual property resources. Because of the intangible nature of IP assets, it is especially important that the methods for identifying, transferring and retaining IP rights be clearly spelled out in any agreement between co-venturers and the joint venture.

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