What Boards Need to Know About IP Risk in Strategic Partnerships
- JimN
- Sep 9
- 3 min read
In an era of rapid innovation and global collaboration, strategic partnerships are more crucial than ever for business growth. Whether companies are co-developing technology, entering new markets, or acquiring emerging startups, intellectual property (IP) is often the crown jewel—yet it remains one of the most overlooked sources of risk.
Boards of directors play a crucial role in overseeing these partnerships. While legal teams manage the details, it’s the board’s responsibility to ensure the organization is not only protected but strategically positioned when it comes to IP. Here’s what directors should be asking before approving—or even encouraging—these relationships.
1. What’s Really Being Shared (and Who Owns It)?
In any strategic partnership—be it a joint venture, research collaboration, or M&A deal—IP is either being shared, transferred, or created. Boards should press for clarity on:
What existing IP is being contributed by each party
Who owns new IP created through the partnership
Whether there are adequate mechanisms to prevent leakage or misuse
Too often, assumptions about co-ownership or implied rights can lead to disputes down the line. For example, if a startup shares proprietary code during a “friendly” pilot with a corporate partner, but the ownership wasn’t clearly defined, both parties could later claim rights. These scenarios are preventable with early scrutiny.
2. Are We Aligned on Definitions of Confidentiality and Use?
Even when IP isn’t formally transferred, exposure can occur. Boards should ask whether the company has strong confidentiality provisions in place, and whether those provisions are consistent with how the partnership will operate.
Are there clear boundaries around what can be used, modified, or reverse-engineered? Are there enforcement mechanisms if one party breaches those boundaries?
In industries such as AI, biotech, and clean tech—where innovation cycles are short and competitive pressure is high—even small leaks can have significant consequences. A contract that’s “good enough” for a vendor might not be sufficient for a strategic partner with access to core IP.
3. How Do We Exit Without Losing Our Edge?
Strategic partnerships don’t always last forever—and when they end, IP questions often arise. Boards should require clarity on:
What happens to shared or jointly developed IP upon exit
Whether either party retains usage rights after termination
How trade secrets and know-how will be protected going forward
One red flag: agreements that grant a partner “perpetual” rights to jointly created IP without performance milestones or review clauses. This could leave a company tied to outdated terms or unable to repurpose its own innovations in future ventures.
4. Is Our IP Portfolio Due Diligence-Ready?
This is especially important for companies engaging in cross-border deals, startup acquisitions, or licensing arrangements. Boards should expect regular updates on the strength and readiness of the company’s IP portfolio—including:
Whether patents are properly filed and maintained in relevant jurisdictions
Whether key trade secrets are documented and access is controlled
Whether the company can demonstrate a clean chain of title for all core assets
Being “due diligence ready” isn’t just about acquisitions. It signals to partners, investors, and regulators that the company takes IP seriously—and that the board understands its strategic value.
5. Are We Balancing Legal Protection with Innovation Agility?
Legal risk management should never come at the cost of innovation. The best boards ask: How can we protect our core assets and remain open to collaboration? That balance starts with embedding IP considerations early in the partnership design phase—not treating them as a final checkbox.
Some companies are now involving legal counsel in R&D road mapping sessions, product sprints, and innovation hubs. Boards that encourage this cross-functional integration see better alignment between strategy and protection.
Final Thought: IP is Not Just Legal—It’s Strategic
Too often, IP is treated as a legal technicality rather than a core component of business value. But in strategic partnerships, it can determine whether innovation scales—or stalls. Boards that proactively engage in IP oversight aren’t overstepping; they’re fulfilling a fiduciary duty.
Whether you’re on a startup advisory board or a Fortune 500 committee, these questions offer a starting point. The answers will not only help mitigate risk but also shape the company’s competitive edge for years to come.
What’s your board’s approach to IP oversight in strategic partnerships? Let’s compare notes.
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