6.13 Intellectual Property Rights (IPR) are rights that exist to protect certain works from unauthorised use by others. Further details on the nature of IPR and procedures for dealing with IPR issues can be found in Annex F.
6.14 There are two methods of contributing IPR to a JV:
● a licence agreement on arm's length terms (as it may continue beyond the owner's equity interest in the JV); or
● an assignment of the ownership of the IPR to the JV.
6.15 Table 6.A below identifies possible differences between a licence and an assignment.
6.16 The public sector body will also need to clarify in the JVA and/or IPR subsidiary contracts the position in relation to new IPRs created in the future by either the JV, the public sector body or any of the JV partners in connection with the JV. This is also dealt with in more detail in Annex F.
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| Licence | Assignment |
| Ownership of existing IPR | Remains with the licensor. | Is transferred to the JV: consider whether a licence back to original owner will be required. |
| Payment | Licence fee or royalty stream (potentially convertible into equity) will need to be on arm's length basis and will reflect the nature of the JV. | One-off lump sum or in exchange for an equity stake in the JV. |
| Protections | Cost of protecting and enforcing the IP generally remains with the licensor/owner (although for an exclusive licence these costs could be assigned to the licensee). | Cost of protecting and enforcing the IP transferred to the JV. |
| Termination | Termination provisions giving the licensor a right to terminate the licence usually included. | Rights may or may not revert back to the original contributing party depending upon the terms of the JV Agreement. |
| Restrictions/ control | Licence can include certain restrictions in order for the licensor to control use of existing IP. | As owner of the existing IP, the assignee will have the rights of an owner. |
| Warranties | The JV should seek warranties in relation to ownership of the IPRs which are the subject of the licence. | The JV should seek warranties in relation to ownership of IPRs and transfer of IPR to the JV. |
| Duration | Usually limited. | Assignment of ownership is usually permanent, unless otherwise specified. |