Laying Down the Rules of the Road for Joint Ventures to Minimize Trade Secret Misappropriation Risk

• Jurisdiction: California,United States
• Citation: Vol. 47 No. 4
• Publication year: 2022
• Author: Catherine Lui
• topic: Business of Law,Contracts,Intellectual Property

LAYING DOWN THE RULES OF THE ROAD FOR JOINT VENTURES TO MINIMIZE TRADE SECRET MISAPPROPRIATION RISK

Catherine Lui
Orrick, Herrington, & Sutcliffe LLP

Joint ventures ("JV") can be very beneficial for the companies involved because they enable them to share technology and more quickly develop new innovative products. But they can also be minefields for potential thorny trade secret issues as two companies with important technologies are sharing highly confidential information. If rules of the road are not clearly defined, the potential for trade secret theft accusations can significantly increase. Having a strong and clear JV agreement before any exchange of confidential information is key to minimizing risk later down the line. In particular, consider building into the JV agreements the following:

Clearly define the scope and duration of the JV agreement. Be wary of "scope creep."

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