The Business Counselor Blog™

Assignment of Joint Venture Interests

While the parties to a joint venture generally intend that their relationship will survive until the end of the projected term of the project for which the joint venture was formed, it is recommended that plans be made in advance for the possibility that a joint venture interest will be assigned and transferred during the joint venture term either to the other joint venturer or to a third party following compliance with transfer procedures that should be detailed in the shareholders’ agreement and/or the bylaws of the joint venture.  This month's report provides references to practice tools that can be used to faciliate the assignment of joint venture interests.

Using Outside Vendors to Broaden the Product Line

Companies engaged in distribution activities may manufacture their own products and/or enter into agreements with third parties to distribute the products of those parties.  These contracts with third parties are generally referred to as vendor agreements, althought they may also be called distributorship agreements for obvious reasons.  In any case, these arrangements with outside vendors are a good way for companies to broaden their product line, a theme discussed in greater detail in this week's report.

Foreign Regulation of Inbound Technology Transfer Agreements

Cross-border technology licensing agreements have become an important, often essential, element of the overall business strategy of any firm that seeks to expand its operations globally. In general, a cross-border technology license provides the framework under which an owner of intellectual property rights (or specialized knowledge or expertise that meets the applicable definition of a trade secret) can transfer certain legal rights relating thereto to a business partner in a foreign country while still retaining title and control of such technology. As is the case with purely domestic licenses the owner of the technology—the licensor—will seek to retain control over the licensed subject matter through careful definition of the scope of the licensing include permits uses, territorial restrictions and limits on the terms of the license. Compensation from the licensee, generally in the form of royalties, is also an important component of any cross-border technology license agreement. Additional provisions will be included depending on the type of licensed subject matter with distinctions being drawn between licenses of registered or statutory intellectual property rights (i.e., patents or trademarks) and licenses of "know-how" in connection with a process—such as manufacturing--which may include training and other services from the licensor in order to ensure that the licensee understands and absorbs the proprietary information. Governments around the world has sought to impose restrictions on inbound technology transfers agreements for a variety of reasons. This week we provide you with a report that includes an overview of technology transfer regulations and specific summaries of applicable laws in China, India and Mexico.