The TecONE seminar entitled “What to Note when drafting Partnership Agreement on R&D Project” was organized by Hong Kong science & Technology Parks Corporation (HKSTP) on 20th July 2016. A neat and solid partnership agreement protects you from potential counterparty risks. No matter your partners are MNCs, statutory bodies, or freelancers, a partnership agreement helps you to kick off a successful and satisfying collaboration. The invited speaker was Ms. Jade Tang (Senior Associate, Oldham, Li & Nie Lawyers) and she would share the major areas including preparatory stage, structure of the partnership, local law and tax issues, intellectual properties (IPs) and so on.
Firstly, Ms. Jade Tang explained an arrangement between partners who could be individuals, companies or other partnerships and they cooperated to advance mutual interests or goals. There were contractual agreement (e.g. for freelance and service agreement) and forming of a joint venture (JV) (e.g. company or a limited liability partnership or unlimited liability partnership).
Then she introduced different legal requirement in Hong Kong as follows:
Common Law – Contract Law Principle (For JV or Partnership by contractual agreement)
Cap 622 Companies Ordinance – Partners forming a company (JV company)
Cap 37 Limited Partnership Ordinance – Partners forming a limited liability partnership
Cap 38 Partnership Ordinance – Partner forming a “General Partnership” with unlimited liability
Ms. Jade Tang also introduced different type of relationship about partnership or JV. It should consider the relation is long term or short term. One of contracts was discussed that Research and Development (R&D) / co-operation contact should be considered the project’s patent and royalty that were valid within certain of period (e.g. 5 years).
In preparation stage, we needed to have a feasibility study or business plan (e.g. budget and know-how), NDA to protect your IP/confidential information; as well as, what country legal requirement to be related. Then we considered the local law and tax issues. After that Due Diligence (DD) investigation into assets/business should be performed.
Some items about IP (R&D Projects Related) should be considered such as principal IPR issues, material technology provided by partner / JV, technology predominantly (e.g. data/information update), trademarks, etc.
There were 17 steps for material provisions in a partnership/JV agreements.
HKSTP - http://www.hkstp.org
TecONE - http://tecone.hkstp.org/t1_web/