SWITZERLAND Law and Practice Contributed by: Alexander Vogel, Marc Baumberger and Selina Bruderer, MLL Legal
ing party conflict with the interests of the JV company, the director must prioritise the JV company’s inter - ests. Failure to do so may result in personal liability for breach of fiduciary duty. In certain circumstances, it may be inappropriate for an individual closely tied to a JV participant to serve on the board – particularly if persistent or unresolvable conflicts of interest would prevent them from acting independently and in the best interest of the JV com - pany.
ing), IP is usually licensed to the JV under contractual arrangements, with each party retaining ownership. In cases where a party contributes IP that is itself sub - ject to a third-party licence, the terms of the primary licence must be reviewed to ensure that sublicens - ing to or use by the JV is permitted. Restrictions in upstream licence agreements can otherwise limit the When transferring IP to or from foreign entities, addi - tional considerations arise. These include compli - ance with local registration and formalities, potential tax implications (eg, withholding tax on royalties) and export control or data protection regulations. Furthermore, enforcement of IP rights across jurisdic - tions should be taken into account when determining the governing law and dispute resolution mechanism in the JV agreement. 8.2 Licensing v Assignment of IP Rights In contractual JVs, licensing of IP is generally preferred, while both licensing and assignment are common in corporate JV structures. Where a JV participant con - tinues to use or further develop the IP independently, it will typically seek to retain ownership in order to preserve control and avoid complications in the event of JV termination or dissolution (see 8.1 Ownership and Use of IP ). JV’s ability to exploit the IP. Cross-Border IP Transfers The choice between licensing and assignment ulti - mately depends on the role and strategic value of the IP within the JV. If the JV’s primary objective is the joint development or commercialisation of IP, an assign - ment to the JV may be more appropriate, particularly if a future sale or exit is anticipated. In such cases, ownership by the JV can enhance the attractiveness and valuation of the venture, whereas the absence of IP ownership may hinder a clean divestment. Accordingly, the structure should be carefully aligned with the intended use of the IP, the commercial goals of the JV and potential exit scenarios.
8. IP and ESG 8.1 Ownership and Use of IP Corporate JVs
In a corporate JV, IP may be transferred to the JV company, making it the legal owner of the relevant rights. If a contributing party wishes to continue using the IP for its own business purposes, it must typically enter into a separate licence agreement with the JV company. While an in-kind contribution of IP is possi - ble under Swiss law, this approach may present valu - ation and liability challenges, particularly in the event of insolvency or a shareholder exit. An inaccurate valuation at the time of contribution could expose the contributing party, the JV company or its sharehold - ers to potential creditor claims. To mitigate such risks, parties often prefer to license IP to the JV rather than transfer ownership. It is important to note that termination of the share - holders’ agreement does not affect the JV company’s ownership of its IP. In the event of liquidation, all JV assets, including IP, will be subject to liquidation. To address this, JV agreements often include fall-back provisions granting parties usage or purchase rights for IP in such scenarios or where further development is planned. Contractual JVs In contractual JVs (eg, simple partnerships), contrib - uted assets, including IP, are typically not transferred to a separate legal entity, but are held jointly by the parties. To avoid the legal and practical complexities associated with joint ownership of IP (eg, the need for mutual consent for any use, assignment or licens -
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