GERMANY Law and Practice Contributed by: Leif Gösta Gerling, Matthias Krämer, Anna Reuber and Jiabao Gerling-Li, LPA
8. IP and ESG 8.1 Ownership and Use of IP Key IP Issues
the JV and upon termination thereof. Such provisions may govern whether: • licences to use pre-existing IP will survive the termination; • foreground IP reverts to one or more of the JV par - ties; and • JV parties will have a perpetual cross-licence. JV agreements may also outline whether any joint ownership needs to be dissolved upon termination and how this should be handled. The IP is usually allocated to the JV parties based on their respective field of business. Foreground IP will typically only be used for the ben - efit of the JV. However, the JV parties might gain a licence to use the foreground IP for other fields of use on arm’s length terms. Restrictions on how IP generated or used in the JV can be deployed in other, potentially competing ven - tures after termination may be necessary. These provi - sions often cover: • restrictions on using IP to prevent the JV parties from directly competing with each other; or • limitations on deploying knowledge or technology developed during the JV. Specific Considerations for Cross-Border IP Transfers Cross-border issues arise in relation to German employee invention law requirements in particular. When employees of several JV parties are involved in the creation of foreground IP and foreign national law requires a first filing in a foreign country, this conflicts with German law requirements. The JV parties should address such issues in the JV agreement. 8.2 Licensing v Assignment of IP Rights The choice between the licensing and assignment of IP rights should be determined by strategic considera - tions, including the JV’s objectives and the JV parties’ activities outside the JV, as well as the specific nature of the IP rights involved, rather than following a uni - versal one-size-fits-all approach.
Under German law, there are no specific statutory pro - visions governing the treatment of IP rights in JVs. JV parties must identify their pre-existing IP that might be relevant for the JV and clearly delineate which IP assets each party contributes into the JV, including specifying ownership and usage rights. Foreground IP created during the operation of the JV may be owned jointly by all JV parties or assigned to a particular JV party. The JV agreement should define who holds the ownership in the IP rights, and outline the terms of use and commercialisation. German law on employee inventions provides spe - cific challenges. Inventions made by employees are subject to this legislation, and the employer must file a patent covering Germany, unless agreed otherwise between the employee and the employer. This might cause issues when employees of several JV parties are involved in the creation of foreground IP, particu - larly where foreign national law requires a first filing in a foreign country. Key IP Issues in Contractual Collaborations Fundamentally, JVs involve questions regarding grant - ing access to the JV parties’ background IP and the allocation of foreground IP developed during the col - laboration. In addition, JVs often involve the sharing of sensi - tive information, necessitating stringent confidentiality provisions. These must continue to operate after the termination of the JV, in order to protect proprietary know-how, trade secrets and confidential business strategies. Upon termination, the JV parties may need to ensure that all confidential material is returned or destroyed, and that any IP arising from the JV’s use of this infor - mation is appropriately addressed. Treatment of IP Issues in JV Agreements The JV agreement should specify how IP rights (both pre-existing and newly created) will be handled during
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