TechConnect - The Nano Issue

There are, however, potential pitfalls to joining a particular consortium—or the wrong consortium—which could prove to be detrimental to your business. Generally, these pitfalls fall into two categories: business and legal risks.

Business Risks

If your company joins a consortium that promotes a “losing” technology or standard, there is a possibility that your company’s market share will decline, perhaps precipitously. Trying to play “catch up” with your own R&D (if catching up is even possible) could be prohibitively expensive. Eventually, your existing technology or products could approach obsolescence as competing technologies or standards evolve in a different technological direction.

To avoid the negative implications of not joining

the “right” consortium, it is critical to evaluate competing consortia and then analyze which collaborative initiative has the potential of winning the broadest industry acceptance. It’s also imperative that you make sure that a particular consortium’s purpose aligns with your company’s overall business plans and direction.

Moreover, it is important to examine the organizational structure of each consortium. These factors could determine the extent and nature of your company’s participation in the consortium’s governance and the obligations imposed on you as a member.

Legal Risks One of the most significant legal risks posed by joining a consortium is your company could inadvertently relinquish some of its most crucial

intellectual-property rights. Membership agreements increasingly require each consortium member to comply with all of the consortium’s “policies and procedures.” This commitment, when fully evaluated, could mean your company is obligated to: disclose confidential patents and other intellectual property to the other members of the consortium (at a minimum); license certain company patents and other intellectual property, sometimes royalty-free, to other consortium members; and share, or even transfer, ownership of your company’s technology if you contributed it to the collaborative efforts of the consortium. Thus, it is essential for a company to carefully review all consortium agreements and policies to fully evaluate how membership might impact your company’s valuable intellectual property rights.

Maneuver Carefully Technology consortia are already an essential part of R&D in many companies. Companies that are often competitors increasingly are turning to consortia to collaboratively address technology and research challenges impacting that industry sector. While consortia membership could catapult your company toward greater indus-try-wide success, the decision to join a consortium is fraught with complexity and should not be undertaken lightly. Evaluation of each consortium should be part of your larger business plan. As with every other piece of your company’s business roadmap, maneuver the path with caution and make sure you fully understanding every avenue you pursue.

Frank X. Curci is chair of the intellectual property department and is a member

(partner) at Jennings, Strouss & Salmon. He represents technology and life sciences entities in domestic and international intellectual property and technology law matters.