Joint ventures pair companies that each bring something the other lacks: technology and market access, capital and know-how, a product and a distribution network. They also tend to end in disputes over who owns what was built together. We help companies form joint ventures and collaborations with the hard questions answered at the start, including control, funding, IP, and exit, and we represent partners when the venture stalls, deadlocks, or breaks apart. Our technology background is useful here, because the value of many ventures sits in jointly developed software, data, and inventions.
Contractual Or Entity Structure
A contractual joint venture, often called a strategic alliance or collaboration agreement, keeps the parties separate and allocates work, costs, revenue, and IP by contract. It suits development projects, co-marketing, and defined programs. An entity joint venture creates a new company, most often an LLC, owned by the partners and governed by an operating agreement. It suits long-term businesses that need their own employees, assets, and financing. The choice affects tax treatment, liability, and fiduciary duties, which Delaware and many other states allow LLC members to modify or limit. Forming a new entity can also require a Hart-Scott-Rodino filing if the size thresholds are met.
Governance, Contributions, And IP
Governance documents should set board or manager seats, reserved matters requiring unanimous or supermajority approval, budgets, and information rights. Contributions of cash, equipment, people, and IP need values, timing, and consequences for missed capital calls. IP is usually the hardest issue. Each party's background IP is typically licensed to the venture for a defined field of use, while foreground IP developed by the venture is owned by the venture, by one partner, or by both, with licenses back. Joint ownership carries traps: under 35 U.S.C. 262, each co-owner of a U.S. patent may use and license it without the other's consent or any duty to account, unless the contract says otherwise.
Deadlock, Exit, And Antitrust
Ventures need a way out that does not require litigation. Deadlock provisions typically escalate disputes to senior executives, then to mediation, and finally to a buy-sell mechanism, a put or call right, or dissolution. Exit terms should cover transfer restrictions, rights of first refusal, drag-along and tag-along rights, and what happens to the IP licenses and customer contracts on termination. Competitor collaborations raise antitrust risk under Section 1 of the Sherman Act. The FTC and DOJ withdrew their competitor collaboration guidelines in 2024, so the analysis rests on case law: keep the venture's scope defined, wall off competitively sensitive information, and avoid restraints broader than the venture needs.
Disputes Between Partners
Joint venture disputes tend to involve breach of the operating or collaboration agreement, breach of fiduciary duty, claims that one partner diverted an opportunity or used venture IP outside the agreed field, and fights over valuation at exit. We represent partners in these disputes in court and in arbitration, which many joint venture agreements require. We seek injunctions to stop misuse of jointly developed technology or confidential information, pursue accounting and damages claims, and litigate judicial dissolution where the agreement fails to resolve a deadlock. Because the IP is often the main asset, we trace what was developed, by whom, and with which resources. Disputes are handled with our Litigation practice.
Getting The Deal Right
Define the venture's purpose and field narrowly, since broad scopes create conflicts with each partner's existing business. Inventory each party's background IP before work starts, and record what each side contributes. Decide ownership of foreground IP explicitly rather than defaulting to joint ownership. Set a budget process and a funding mechanism that addresses a partner who cannot or will not contribute. Write the exit before the entry, including how the business will be valued. Check for change-of-control triggers in each partner's existing contracts, and for HSR and foreign investment review. And put the venture's confidentiality and non-solicitation terms in writing before the first technical meeting.
