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      *  A Checklist for Joint Collaborative Agreements - NCMA CM Magazine in

Oct 2009  

John E. Miller

JOINT COLLABORATION AGREEMENT CHECKLIST

In your contracts management activities, it is likely nowadays that you will be asked by your employer to either draft or review a Joint Collaboration Agreement. The Joint Collaboration Agreement is often also commonly called a joint cooperation agreement, strategic alliance agreement or some other joint relationship type name. Typically, the Joint Collaboration Agreement is much more far-reaching than a teaming agreement that usually just focuses on one or more specific potential business opportunities. For the purposes of this article, such a Joint Collaboration Agreement does not create a legal entity (such as a partnership, legal joint venture or other legal entity) and it is a document that primarily describes a mutually beneficial relationship between two or more parties. It is purely a contractual relationship. The Joint Collaboration Agreement forms the basis for the on-going mutually beneficial win-win joint activities of the parties. As with any substantive contract executed by an entity, Joint Collaboration Agreements are important contracts that contain numerous issues that need to be properly addressed.

There are, of course, certain situations in which the parties may desire to jointly create a new legal entity to perform the collaboration, however, such a collaboration in which a new legal entity is jointly formed is outside the scope of this article.

In my contracts management career, I have drafted and reviewed many Joint Collaboration Agreements.  In order to systematically cover the multitude of unique issues in a typical Joint Collaboration Agreement, I have developed a practical “Joint Collaboration Agreement Checklist”. Set out below is my thirty (30) general items checklist, containing over fifty (50) important sub-items, that I use in drafting and reviewing Joint Collaboration Agreements:

- THIRTY (30) GENERAL ITEMS CHECKLIST –

1. Are the parties to the Joint Collaboration Agreement (“Agreement”) accurately identified by full legal name, type of entity, state of entity creation, and entity physical address?

2. Is legal consideration cited (i.e. “in consideration of the mutual promises of the parties, the parties agree as follows”)?

3. Is there a Background section that states essentially that due to the synergistic capabilities and experience of the parties in the specific areas of collaboration, it is mutually beneficial for the parties to jointly collaborate while remaining separate and distinct entities and not as a legal partnership, legal joint venture or other arrangement in which a new legal entity is jointly created?  Are the qualifications of the parties described?

4. Is there an Intent and Guiding Principles section that states the need for: (1) a cooperative working environment, good open communications, the ability to confidently work together, and a trusting working relationship; (2) a relationship that is a mutually beneficial non exclusive arrangement; (3) the  optimum performance by the parties; (4) a cooperative spirit; (5) the parties to seek  certain objectives and to understand each other’s expectations, organizational goals, and values; (6) the commitment to work together cooperatively by sharing certain knowledge, risks, and rewards; and (7) each party to remain an independent contractor under the Agreement as well as during all operational aspects of the Agreement?

5.  Is there a Definitions section that clearly defines the Agreement’s key capitalized terms such as: (1) each party’s “Proprietary Information”; (2)  each party’s “Rights” to include know-how, technical data, computer software, and inventions now in existence or later developed by each party including all such party’s applicable copyrights, mask works, trademarks, service marks, trade dress rights, patents, provisional patents, patent applications, trade secrets, moral rights, and other related intellectual property including related future developments and improvements; and (3) any other key terms that need to be capitalized and defined?

6.  Is there a Relationship of the Parties section that clearly states that each party is an independent contractor with regard to each other under the Agreement and that neither the Agreement nor the operation of the Agreement in any way causes the parties to become legal partners, legal joint venture parties or parties to any other legal entity? 

7.  Does each party state that it is not and it will not be a party to another contract that would prevent or impair its performance or obligations under the Agreement?

8.  Is it clear that nothing in the Agreement shall prevent, preclude or restrict either party from dealings with outside parties to the extent such outside party dealings do not create a default under the Agreement?

9. Is there an Activities of the Parties section that clearly, completely, and accurately states the activities and responsibilities of each party individually as well as the collaborative activities of the parties jointly under the Agreement?  This is the heart of the Agreement.  These activities need to be carefully prepared.

10.  Is there a Collaboration Management provision that addresses how the collaboration activities will be managed and how decisions will be made?

11. Is there a Term of the Agreement section that states the effective date, the length of the period of collaboration, and how to extend the period of collaboration of the Agreement?

12. Is there an Exchange of Proprietary Information section in the Agreement?  Is this a mutual two-way non-disclosure/non-use provision that addresses all the applicable non-disclosure/non-use issues?

( See: "Forty-five Nondisclosure Agreement Review Tips" – Johnny Miller -

http://www.ncmahq.org/files/Articles/F5BC2_CM1106_-_C05_Back-To-Basics.pdf )

13.  Is there a Termination section that properly addresses termination for default and termination for convenience?

14.  Is there a Limitation of Liability section that reasonably caps each party’s monetary liability to the other for actions related to or arising out of the Agreement (excluding the harmed party’s intellectual property infringement claims or wrongful disclosure/use of Proprietary Information claims against the harming party)?

15.  Is there a Waiver of Consequential Damages section that provides for an equitable mutual waiver of consequential, indirect, special, and incidental damages between the parties?

16.  Is there an Indemnification section in which each party reasonably agrees to indemnify the other for: (1) third party general liability claims arising out of the Agreement to the extent of the indemnitor party’s proportional negligence or willful misconduct; and (2) third party intellectual property infringement claims arising as a result of the indemnitor party’s activities under the Agreement? 

(See: " Forty Indemnification Clause Review Tips " – Johnny  Miller- http://www.ncmahq.org/files/Articles/84698_CM0307_C02.pdf )

17.  Is there an appropriate Warranty provision, Limited Warranty provision or a Disclaimer of Warranties provision?

18.  Is there an Insurance provision that states the types of coverages and coverage limits that will be required of each party?  Will there be any endorsements (waiver of subrogation, additionally insured party, etc.)?

19.  Is there a Governing Law provision?  Is the chosen state law suitable?  Does the provision exclude the chosen state’s choice of law provisions?

20. Is there a provision that properly addresses Public Announcements, News Releases, and Advertising Materials? This is an important provision since the involved parties very often like to extract as much publicity as possible from the collaborative arrangement.

21.  Is there a reasonable Allocation of Technology and Intellectual Property provision?  This should address the current “Rights” of each party individually to its currently existing technology and related intellectual property.  Also, it should address  the future “Rights” of each party individually to its  technology and related intellectual property solely developed by each party under the Agreement. Additionally, the provision must also address how the ownership and rights of use will be equitably allocated between the parties with regard to jointly developed technology and intellectual property under the Agreement.

22. Is there a Dispute Resolution provision that addresses how disputes between the parties will be resolved? 

23. Is there a Business Continuity (disaster recovery) provision to address how each party plans for continuation of their business in the event of interruptions?

24. Is there a Business Ethics provision to address how each party with operate ethically with integrity?

25. Is there a Data Privacy provision that addresses how individual privacy will be safeguarded?

26. Is there a Records Retention provision that properly addresses how long applicable records and data will be retained and stored before deletion and destruction?

27. Is there a Score Card  provision so that the parties can periodically assess and evaluate the collaboration?

28.  Is there an Anti-piracy of Employees provision that reasonably prohibits one party from soliciting or hiring the other party’s employees?

29.  Is there an Export Compliance provision that requires compliance with the EAR, ITAR, FCPA, anti-boycotting laws, and other export compliance laws and regulations?

30.  Is there a General provision that addresses assignment, force majeure, notices between the parties, waivers, headings, severability, compliance with applicable laws, controlling language, and regulations, survival, order of precedence, complete agreement, and modifications?

The goal of a Joint Collaboration Agreement is to facilitate an on-going mutually beneficial contractual win-win relationship between your entity and the other party or parties without creating a separate legal entity.  A good Joint Collaboration Agreement helps the parties in creating, sustaining, and enjoying the collaborative journey. A good checklist certainly helps is creating or reviewing a good Joint Collaboration Agreement. However, this checklist is not exhaustive.  Every Joint Collaboration Agreement has some unique aspects that may not be addressed in this checklist.  However, if you routinely use this checklist as one of several resources when you draft or review a Joint Collaboration Agreement, you will be pleasantly surprised with the large number of substantive, material, risk reduction, performance  improvement, and cost-savings issues that will be surfaced for proper resolution.

About The Author

JOHN (“JOHNNY”) E. MILLER, a Texas and Missouri attorney, is a contracts management consultant who has worked in contracts management for many companies in the last 30 years.  He is a member of the Greater San Antonio Chapter of NCMA.  

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