Better Practices for Managing Intellectual Assets in Collaborations

OVERVIEW:Firms moving to a model in which they complement their internal innovation efforts with innovation from external sources need to manage their intellectual property carefully. This requires careful internal alignment and appropriate negotiations of non-disclosure and joint development agreements, at times that are appropriate for maintaining IP rights. Moving too soon can expose the firm to contamination, but waiting too long (while negotiating agreements) can result in a loss of the fruits of the collaboration. Likewise, the timing of negotiating commercial terms is a critical decision as the market-facing firm has more power before new technology is demonstrated. But the power shifts once a technology is demonstrated, and spending time negotiating commercial terms for an unproven technology can waste scarce resources.