SWEDEN Law and Practice Contributed by: Johannes Wårdman and Erik Frykenholt, CMS Wistrand
8. IP and ESG 8.1 Ownership and Use of IP
be the owner of the IP rights, it may be more suitable to assign the rights to the JV. 8.3 ESG Considerations in JVs ESG factors are no longer just about reputation or investor branding. They are increasingly embedded in binding legislation, affecting how companies report, conduct due diligence, manage supply chains, and even how they structure partnerships such as JVs. Beyond compliance, ESG now drives access to capi - tal, market positioning and risk management. A failure to align with evolving ESG standards can lead to liti - gation, loss of financing, or regulatory scrutiny – risks that are particularly pronounced in cross-border or shared-ownership structures. • Corporate Sustainability Reporting Directive (CSRD, 2022/2464): This requires large companies and listed SMEs to report in detail on ESG matters, using the new European Sustainability Reporting Standards (ESRS). It applies from 2024, expand - ing the scope and depth of sustainability reporting obligations. • Corporate Sustainability Due Diligence Directive (CSDDD, 2024/1760): This obliges large com - panies to identify, prevent and mitigate adverse environmental and human rights impacts across their entire value chains. Significantly, liability can extend to business partners, suppliers and JV structures. • EU Taxonomy Regulation (2020/852): This estab - lishes uniform criteria for what qualifies as an environmentally sustainable economic activity. Companies in scope of CSRD must report on the taxonomy alignment of their revenue, CapEx and OpEx. • Sustainable Finance Disclosure Regulation (SFDR, 2019/2088): This imposes ESG disclosure require - ments on financial institutions such as asset managers, banks and pension funds – indirectly influencing investee companies and JV structures that seek capital. • EU Regulation on Deforestation-Free Products (2023/1115): From December 2024, companies placing certain commodities (eg, timber, coffee, soy, cocoa) on the EU market must ensure they are not linked to deforestation. This may apply to
When setting up a JV there are a few general issues to consider regarding the use of IP rights. Firstly, IP rights required for the JV to conduct its intended business should be clarified. The parties should then specify which IP rights they are bringing to the JV and agree upon the ownership of such pre-existing IP rights. IP rights should then be assigned or licensed to the JV entity for the duration of the collaboration. Finally, to ensure that the JV can be terminated effectively and to minimise the risk of disputes, a clear exit strategy regarding IP rights should be established. Furthermore, the parties should agree on what will happen to any new IP developed as a result of the JV. This should include who will own the IP and who has a right to use it. The JV agreement and the shareholders’ agreement should include provisions to protect confidential infor - mation and trade secrets exchanged between the par - ties. These provisions shall also define the individuals or entities entitled to access such information, and the circumstances in which it may be used within the JV. Upon termination of the JV, the partners should also consider what happens to the IP rights of the JV. The pre-existing IP rights could be reverted to their original owners and IP rights resulting from the JV could be transferred to either or all partners. IP rights could also be transferred or assigned to third parties but should be subject to the approval of the other JV partners. It is also important that licensing of IP rights should be subject to the continuity of the JV and that the licence will be terminated if the JV is terminated. 8.2 Licensing v Assignment of IP Rights The choice between licencing or assigning IP rights to the JV should be determined by the objectives and strategic interests of the owner of the IP rights. If the owner wants to retain control over the IP rights and continue to develop and take profit from the IP rights, it is more beneficial to license the IP rights to the JV. If, however, the owner needs to raise capital or if it is a condition from the JV participants that the JV shall
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