Co-development/ Partnership Agreement

This Co-development Agreement (hereinafter called the “Agreement”) is entered into by and between

[name]
[company registration number]
[address]

(hereinafter called “Party A”)

and

[name]
[company registration number]
[address]

(hereinafter called “Party B”)

1. Definitions

1.1 As used in the Agreement, the following words have the following meanings when written with a capital first letter:

The “Agreement” means this Co-development Agreement, including Appendix A, as may be amended from time to time in accordance with Clause 11.1.

“Background Rights” means all Confidential Information and IPR owned by a Party and which are not Foreground Rights.

“Confidential Information” means all technical and other information which is not IPR.

“Field of Use” means [field of use] in respect of Party A and [field of use] in respect of Party B. “Foreground Rights” means all Confidential Information and IPR which are first generated in the perfor-mance of the Project.

“IPR” means patents, utility models, designs, copyrights and any other intellectual property rights of a technical nature anywhere in the world.

“Party” or “Parties” means Party A or Party B, individually, or Party A and Party B, collectively.

“Product” means [product to be developed under the Project].

“Project” means the project to develop the Product, as set out in Appendix A hereto.

2. Scope

2.1 Party A and Party B hereby agree to jointly perform the Project, on and subject to the terms and condi-tions of the Agreement.

2.2 Due to the experimental nature of the Project, a Party’s failure to achieve a particular result shall not be considered a breach of the Agreement.

3. Costs

3.1 The costs of performing the Project shall be borne by the Parties as set out in Appendix A.

3.2 Except as provided in Appendix A or as otherwise agreed by the Parties in writing, a Party shall not be required to bear any costs associated with performing the Project.

4. Ownership

4.1 Each Party shall exclusively own its Background Rights.

4.2 The Parties shall jointly own all Foreground Rights, whether made solely by a Party or jointly by the Par-ties.

4.3 A Party shall not pledge, sell or otherwise dispose of its interest in the Foreground Rights to third parties without the other Party’s prior written consent.

4.4 Licensing of Foreground Rights to third parties shall require written agreement between the Parties, set-ting out their respective rights and obligations, including, without limitation, the distribution of licensing costs and income.

5. Right of use

5.1 A Party shall be entitled to exclusively use the Foreground Rights to make, sell or otherwise dispose of the Product within its Field of Use.

5.2 Each Party hereby grants to the other Party the non-exclusive right to use its Background Rights free of charge, but only as strictly necessary to perform the Project.

5.3 Each Party hereby grants to the other Party a non-exclusive, royalty-bearing, non-transferable right to use its Background Rights, but only as strictly necessary to enable the other Party to make, sell or oth-erwise dispose of the Product within its Field of Use. The terms and conditions of the right of use shall be set out in a separate agreement negotiated and signed by the Parties in good faith. 5.4 No right to use any Background Rights is granted by one Party to the other under the Agreement except as expressly set out in Clauses 5.2 and 5.3.

6. Protection

6.1 The Parties shall decide, by mutual agreement, whether to file for or maintain patent or other IPR protec-tion of the Foreground Rights.

6.2 If the Parties decide to file for or maintain patent or other IPR protection of a Foreground Right, the Par-ties shall agree which Party shall conduct the activities in the names of and on behalf of both Parties. The Parties shall equally bear all costs resulting from these activities.

6.3 If a Party declines to bear its share of the costs associated with filing for or maintaining patent or other IPR protection of a Foreground Right, the other Party may conduct the activities in its own name and at its own expense. The declining Party shall retain its rights set out in Clause 5.1 in respect of the patent or other IPR protection, but shall lose its rights and obligations under Clause 4.4 in respect of the patent or other IPR protection.

7. Enforcement

7.1 The Parties shall decide, by mutual agreement, whether to take action against an infringement of the Foreground Rights by a third party.

7.2 If the Parties decide to take action against an infringement of a Foreground Right by a third party, the Parties shall decide which Party shall control the activities in the names of and on behalf of the Parties. The Parties shall equally bear all costs and income associated with such action.

7.3 If a Party declines to bear its share of the costs associated with the action taken against an infringement of a Foreground Right by a third party, the other Party may decide to take such action in its own name, controlling the action and bearing all costs associated with and obtaining all income resulting from the action.

8. Confidentiality

8.1 Each Party shall keep all Background Rights of the other Party and all Foreground Rights strictly confi-dential and shall not disclose these to any third party without the other Party’s prior written consent.

8.2 The obligations set out in Clause 8.1 shall not apply to any Background Rights and Foreground Rights that are generally available to the public, obtained in good faith from a third party, independently developed by a Party or required to be disclosed by law.

9. Limitation of liability

9.1 A Party shall not be liable for any failure to fulfil any term or condition of the Agreement due to an event outside its reasonable control (force majeure). If such event continues for [number] days or more, the non-affected Party may terminate the Agreement by written notice and without liability to the affected Party.

9.2 In no event shall a Party be liable to the other Party for consequential, incidental, special, punitive or exemplary loss, including, but not limited to, loss of profit, loss of revenue, loss of business, loss of goodwill, loss of anticipated savings or cost of procuring substitute goods or services.

9.3 All Background Rights and Foreground Rights are provided “as is”, and neither Party makes any repre-sentation or warranty, including, without limitation, any representation or warranty of merchantability, fitness for a particular purpose, non-infringement, validity or patentability.

10. Term

10.1 The Agreement shall commence when signed by both Parties.

10.2 Either Party may terminate the Agreement subject to [number] days’ written notice to the other Party, if it holds a good-faith belief that the Product is not technically or commercially viable.

10.3 Either Party may terminate the Agreement by written notice to the other Party, effective immediately, if the other Party fails to remedy any material breach of the Agreement within [number] days of receiving written notice of such breach or if the other Party enters into insolvency proceedings.

11. Miscellaneous

11.1 The Agreement contains the entire understanding of the Parties with respect to the Project. The Agree-ment may not be amended except by written agreement signed by both Parties.

11.2 Any disputes arising out of or in connection with the Agreement which cannot be settled amicably shall be resolved by a court of competent jurisdiction in accordance with the laws of [country] excluding conflict of law principles.

11.3 The provisions of Clauses 4.1, 4.2, 4.3, 4.4, 5.1, 5.3, 5.4, 6.1, 6.2, 6.3, 7.1, 7.2, 7.3, 8.1, 8.2, 9.2, 9.3, 11.2 and 11.3 hereof shall survive termination of the Agreement for any reason.

For and on behalf of For and on behalf of
Party A Party B

Name: Name:
Title: Title:
Date: Date:

Appendix A
Project

1. Key persons

The Parties’ key persons responsible for [area] are:

[names and contact details]

2. Product

The Product/Service to be developed under the Project is:

[description of Product]

3. Tasks

The tasks to be performed by Party A under the Project are:

[list and description of tasks to be performed by Party A]

The tasks to be performed by Party B under the Project are:

[list and description of tasks to be performed by Party B]

4. Costs

The estimated costs of performing the Project are detailed in the attached budget. The budget also de-tails how the costs are to be divided between and borne by the Parties.

5. Time schedule

The time schedule for performing the Project is:

[time schedule for performing the Project, including the Project as a whole and the tasks to be performed by either Party]

6. Other terms

[other terms applicable to the performance of the Project] Co-development/ Partnership Agreement guide

0. Parties

Your business partner's name, business registration number and address must be correct. Businesses in the same group often have similar names, for example, but whether you conclude the agreement with one or the other company is not necessarily irrelevant.

1. Definitions

Project: It is important the the project on which you and your business partner are to collaborate is clearly described in appendix A to the agreement. This way, you ensure that you clarify your expectations as regards the aim and realisation of the project. Appendix A may, for example, describe:
1.the product to be developed
2.the tasks which each of you is to perform,
3.materials, equipment, money etc. which each of you is to contribute,
4.time schedule for the project
5.names of project employees.

2. Scope of agreement

Clause 2.2: A project will often be experimental, and the specific results of a project will therefore also often be uncertain. This clause is to ensure that you and your business partner cannot set up claims against one another if you do not achieve particular results.

3. Costs

Clause 3.1: The agreement must set out how the costs associated with realising the project are to be distributed between you and your business partner, for instance in the form of a budget incorporated in appendix A.

Clause 3.2: This clause is to ensure that neither you nor your business partner may demand that the other party contributes to the project over and above what is set out in the agreement, unless you agree otherwise with each other.

4. Ownership

Clause 4.1: When you and your business partner decide to undertake a joint project, it will often be because each of you possesses relevant knowledge which you can contribute to the collaboration. This clause is intended to ensure that you each maintain the ownership of the knowledge which you have in advance ('Background Rights') irrespective of you entering into the project.

Clause 4.2: It is important that the agreement sets out who owns the knowledge ('Foreground Rights') which arises in connection with you and your business partner realising the project. The agreement assumes that all Foreground Rights are owned jointly by you and your business partner irrespective of which of you created these rights.

Clause 4.3: It is important that the agreement sets out whether you and your business partner are permitted, for example, to sell your own half of the Foreground Rights to third parties. The agreement assumes that you are not permitted to do so unless you agree on this.

Clause 4.4: It is important that the agreement sets out whether you and your business partner are permitted to sell licences to Foreground Rights to third parties. The agreement assumes that you are not permitted to do so unless you agree on this.

5. Right of use

Clause 5.1: The agreement assumes that you and your business partner work within different business areas and that each of you has an exclusive right to sell the product within your own business area.

Clause 5.2: In order for you and your business partner to realise the project, it is important that you have the right to use the Background Rights which each of you has in advance. Clause 5.2 of the agreement opens up for that.

Clause 5.3: It is important that you and your business partner have the right to use the Background Rights which each of you has in advance when you, at some point, are going to sell the product resulting from the project within your respective business areas – if the products use Background Rights. Clause 5.3 of the agreement opens up for that.

The agreement also assumes that you agree further on the terms of use in a separate agreement.

6. Protection

Clause 6.1: The agreement should set out the terms applying to the filing of patent applications etc. in respect of Foreground Rights. The agreement assumes that this is a matter which you and your business partner will decide on jointly.

Clause 6.2: The agreement assumes that you and your business partner jointly file patent applications etc. in respect of Foreground Rights and that you have joint ownership of the patents etc. resulting from such applica-tions. The agreement also assumes that you and your business partner share all costs associated with patenting etc.

Clause 6.3: If you or your business partner refuses to bear your share of the costs associated with patenting etc. in respect of a Foreground Right, the agreement permits the other party to do so in his own name and at his own expense. The refusing party maintains his right to use the Foreground Right, but loses his rights in respect of any patents etc. resulting from the patenting.

7. Enforcement

Clause 7.1: It is important that the agreement sets out what should happen if a third party uses a Foreground Right without you or your business partner having permitted such use. The agreement assumes that this is a matter which you and your business partner will decide on jointly.

Clause 7.2: The agreement assumes that you and your business will jointly pursue the infringement case. The clause also assumes that you will share all costs and any income resulting from the case.

Clause 7.3: If you or your business partner do not want to bear your share of the costs of an infringement case, the agreement permits that the other party does so in his own name and that that party bears all costs and obtains all income resulting from the case.

8. Confidentiality

Clauses 8.1 and 8.2: It is important that you do not disclose more Background Rights to your business partner than strictly necessary, irrespective of the fact that the agreement contains provisions which are designed to limit the risk of your business partner disclosing your Background Rights to a third party or abusing your Back-ground Rights..

As soon as you disclose information, you lose control of what happens further with such information. It is also important that you mark all background information which you hand over to your business partner in physical form as 'CONFIDENTIAL' or in a similar fashion.

9. Limitation of liability

Clause 9.1: According to the agreement, you and your business partner are not liable for any non-fulfilment of the agreement if this is due to circumstances outside your control. This is what is called 'force majeure'. Exam-ples of force majeure are, for example, war, flooding and fire.

Clause 9.2: The agreement sets out that, if you or your business partner commits a breach of your obligations under the agreement, you may not claim compensation from the other party for any 'indirect loss' (consequen-tial, incidental, special, punitive or exemplary loss).

Clause 9.3: The agreement ensures that you and your business partner may not set up claims against one an-other if, for example, it turns out that some of the Background Rights and Foreground Rights you have made available to each other should infringe any third-party rights. In other words, you are each liable for your own use of Background Rights and Foreground Rights.

10. Term

Clause 10.2: If you want to ensure that you can withdraw from the agreement whenever you need to, you must write this into the agreement. It may, for example, be a good idea to write into the agreement that either party may terminate the agreement at any time subject to a specific notice period if there is reason to believe that the product is not technically or commercially viable.

Clause 10.3: If a party fails to meet his obligations in accordance with the agreement, it is a good idea if the agreement offers the other party the option of terminating the agreement at very short notice; for example if your business partner repeatedly refuses to pay his share of the costs of completing the project.
11. Miscellaneous
Clause 11.2: It must appear from the agreement which country's law is to apply in the event that a dispute arises If both you and your business partner are unable to settle amicably