Creating Profit Through Alliances - business models for collaboration E-book | Page 86

Process
Objectives

Required
competences

Partner
selection

Collaboration
agreement

Own competences

Legal aspects
Are all own
resources
sufficiently
protected, by
patents, copyright
and brand right as
well as proper
confidentiality?

What agreements
are needed to
enable frank
discussion with
the partner? What
happens if the
collaboration is
called off?

Which legal form
do we choose?
How do we
arrange the
collaboration
contractually?

Figure 27. Contractual aspects in the process of arriving at a
partnership

It makes more sense to first let the discussion be
conducted by those that actually stand to benefit
from the returns, meaning an executive board
member, the business development manager, or the
marketing manager. They can then work toward
what is known as a „deal sheet‟, which lays out in
everyday (non-legal) language all the important
arrangements such as contribution, authority,
distribution of costs and revenue, and so on.
As soon as the deal sheet has been finalised and
approved by both sides, the parties' legal staff can
convert it into a contract that also arranges matters
such as liability, dissolution following bankruptcy, and
applicable law.
A remark on the confidentiality agreement or NonDisclosure Agreement (NDA): There are various
models available, ranging from a one-page reciprocal
84

Implementation
of collaboration

agreement to lengthy
documents. In most cases
these agreements are very
general, without any
sanctions. Drafting an NDA
with a clear sanction, for
example a fine of 10,000
dollars in case of a
confidentiality breach,
shows distrust at a moment
where parties trust each
other just enough to start
negotiations. It is important
to balance an NDA and to
find the right tone of voice,
because an aggressively put
agreement can damage the
collaboration.

Contract or joint venture
An important choice to make when fleshing out an
alliance is whether it will take the form of a
contractual agreement, or of a shares transaction
(which includes a joint venture). Both options come
in several varieties (Figure 28).
For a contract between parties, without forming a
new legal entity, we can distinguish between:




a unilateral agreement with a clearly defined
use of the other party's resources, such as a
licensing agreement, an R&D agreement or
distribution agreement; and
a bilateral agreement, in which both partners
contribute resources to the collaboration, such
as a marketing alliance, produc tion alliance or
an optimised customer-supplier relationship.