When a business owned by two or more partners dissolves, disputes over how to divide intellectual property (IP) ownership rights between partners often arise, particularly when the partnership agreement does not provide any recourse or there is no partnership agreement at all.
Two partners set up a business. Both had great plans for their new adventure. Before they got started a partnership agreement was prepared and signed. Fast track a few months later, conflict between the partners occur, both having different visions on how to take the business. Eventually the relationship breaks down and the partners called it quits. Following the dissolution of the partnership, one of the partners started using the former partnership’s IP for their own commercial benefit without the consent of the other partner. Unfortunately, neither partner sought independent legal advice with respect to the partnership agreement and the partnership agreement failed to provide adequate terms with respect to matters relating to the dissolution of the partnership, including how to divide IP ownership rights between the partners.
Determining who owns intellectual property and has the right to future use can be a difficult matter, particularly if the relationship between partners went sour. Clear and enforceable partnership agreements setting out clear terms regarding the rights and obligation of the partners can alleviate disputes and the need for costly litigation. Seeking independent legal advice on any type of agreement before signing is recommended to ensure that your interests are protected in case things go wrong.
At Cohen Legal we can assist clients explore available options for resolution and appropriate division of a business’ intellectual property. This may include restructuring strategies, temporary injunctions to stop infringement or the use of intellectual property by partners, negotiations to divide assets and intellectual property fairly in a dissolution, buy-outs, or litigation when necessary. The best solution to a problem is preventing it occurring.
At Cohen Legal our business is protecting yours. Contact Us to discuss your IP concerns.