The global business community has never been more interconnected, and so are its most pressing business challenges. Business leaders are focused on seeking growth that is both sustainable and inclusive. In response to this, the Baker McKenzie Consumer Goods & Retail industry group has produced the “CG&R and Sustainability Video Chat Series” in which experts provide short, practical insights into some of the legal considerations that companies need to keep in mind when undertaking green innovation.
In the fourth episode of the series, partner Nathalie Marchand from our Paris office is joined by special counsel Grace Wong from our Hong Kong office to explore differing collaboration trends and entities in green innovation, considerations regarding green innovation agreements, protection of confidentiality of green innovations and tips in navigating potential termination of the collaboration.
- Innovation and collaboration play a key role in achieving net zero goals and in supporting the global effort to address climate change.
- There is no one-size-fits-all approach when it comes to collaboration. Depending on the objectives, there are many ways to structure partnerships, which may involve different entities and stakeholders.
- When entering into collaborative partnerships for green innovation, parties should consider IP and data ownership, protection of confidentiality and trade secrets, and securing investments via a robust exit strategy.
Meeting net zero goals and supporting the global effort to address climate change require disrupting existing practices and technologies. Collaboration is key to achieving these goals. A closer look at the global business landscape reveals an increasing trend of businesses investing in green and sustainable projects in order to remain competitive and attractive to investors and customers. This trend aligns with the World Intellectual Property Organization (WIPO)’s forecast that green innovation will increase by 7% each year to an estimated value of EUR 5.9 billion by 2025. And this is reflected across industries, with consumer goods, energy, food, technology, and pharma businesses all taking part in setting environmental, social, and governance (ESG) goals.
These days, very few significant innovations are made just by a single entity. Instead many new innovations – especially in sustainability-focused industries – will be the result of multiple R&D collaborations, often including combinations of different players, technologies and solutions, and of commercialization deals to commoditize and bring to market new products based on the innovations.
Alongside the IP issues present in the development of any product, the increased collaboration involved in sustainability-focused development requires companies to consider:
- IP and data ownership. Companies engaged in collaboration should clearly define ownership and rights to use existing and newly generated technologies and associated data. This is fundamental in the context of collaborative development, and in commercializing IP by allowing third parties to exploit or produce the underlying technology, since commercial partners may also generate valuable data or produce improvements or adaptations of protected technology. When agreeing these rights, consider the parties’ current and potential future relationship.
- Protecting confidentiality and trade secrets. In every stage of a project, confidential information and trade secrets must be protected. This requires clear understanding and documentation of the confidential information being shared or created and robust technical, practical and contractual measures to limit disclosure of the information to necessary recipients only and protect against inadvertent or intentional access.
- Exit strategy. As in any field, collaborations in green innovation do not always work out. Security of existing and newly created IP should be front of mind when drafting agreements. Relevant causes for termination should be included in the agreement, and the agreement should specify what will happen to the IP rights and licenses associated with the collaboration after it ends.
For more practical legal insights on key issues affecting consumer goods and retail businesses in incorporating green innovation practices into their operations and strategies, tune into the Baker McKenzie Off the Shelf video chat series.