1. Intellectual Property Considerations in Joint Development Agreements Presented by H. Eric Fisher, Ph.D. Eckert Seamans Cherin & Mellott, LLC Continuing Legal Education Seminar August 11, 2005

2. 2 - Safest Case - Elements of Successful J D Programs Parties agree upon stated objective. Parties own complementary proprietary technologies and are willing to share it. The parties do not compete in markets to which the technologies are applicable.

3. 3 Intellectual Property Considerations Control of Proprietary Information Use and Ownership of JD IP Use of Foreground and Background IP Researcher Compensation

4. 4 Proprietary Clauses Provide some protection as to: Who the information can be further disclosed to; What can be disclosed; and What the information can be used for.

5. 5 Proprietary Clauses Do not protect against consequences of educating the recipient. Inevitable Disclosure Doctrine – transferable knowledge Time-limited Injunctive relief

6. 6 Possible Risks of Educating the Recipient Recipient’s employees leaving for a new position with a competing company. Recipient developing improvements to your technology outside of the joint development program; possibly for a competitor.

7. 7 Ancillary Contractual Protection for Proprietary Information – Direct Use Recipient agrees to limit the type of future work they assign to their employees exposed to proprietary information, for a limited period of time. Recipient agrees to have a written confidentiality agreement with its employees naming you as a third party beneficiary.

8. 8 Ancillary Contractual Protection for Proprietary Information- Consequential Use Anti-picket Fence Provision: A grant back to improvements possibly limited to a field of use; no obligation to disclose improvements. Time and space limited non-compete provision. “NO BOND” injunction provision. Agreement on the Jurisdiction and law that applies.

9. 9 Provisions Pertinent to Program Results - Background and Foreground Information Rights to use commingled background and foreground information. Rights under background patents to practice foreground results of the program. Ownership and rights to foreground technology and any patents, copyrights and trademarks arising out of the program.

10. 10 Ramifications Of Not Fully Defining IP Rights Without specifying in writing : Both JD Partners have rights under jointly conceived foreground patents; Each freely permitted to license in the U.S. No right to share in U.S. royalties No right to license abroad without partners consent. Patenting Control/Costs Burden Unknown

11. 11 Ramifications Of Not Fully Defining IP Rights Without specifying in writing : Client lacks rights under foreground copyrights authored or trademarks created solely by JD partner; Partners have joint rights to jointly created copyrighted works and trademarks licensing out requires JD partner agreement.

12. 12 Researcher Remuneration Pertinent to J D Projects Current and Future Statutory Compensation Requirements Express statement that any remuneration due an employee of a party, arising out of inventions or otherwise, is the sole responsibility of the employer.

13. 13 Ramifications Of Not Fully Defining IP Rights - Review Without specifying in writing Client lacks Certainty Regarding: Applicable rules - rules vary across jurisdiction; Use of background patents owned by partner - may block use of development results; Rights to partners improvement patents; Client shares jointly conceived patent rights;

14. 14 Ramifications Of Not Fully Defining IP Rights - Review Without specifying in writing: Client may lack protection for proprietary foreground or background information unless it can be shown that an oral contract exists, which is often difficult.

15. 15 Conclusion Joint Development Programs can well be worth the risk; careful drafting of agreements controls and minimizes the risk and should be in place before commencing the program.