Desktop version

Home arrow Computer Science

  • Increase font
  • Decrease font


<<   CONTENTS   >>

Joint Marketing Agreements

Checklist

Preengagement Considerations

□ Scope of engagement

□ Nondisclosure agreement

Marketing Obligations

□ Exhibit with precise marketing obligations

□ Mutual agreement

□ Responsibility for expenses—shared

Referral Arrangements

□ Definition of who is a referral

□ Referral period (anything outside of period is not a referral)

□ Compensation to referring party

□ Audit rights

Confidentiality

□ Protection of all confidential information exchanged

□ Overrides any NDA entered into in preengagement

Intellectual Property Issues

□ Any software or products are provided as is

□ Return of software/products at end of relationship

□ Narrow license for any materials or information shared

□ License for use of trademarks and names

□ Approval for trademark/name usage

□ Reservation of IP rights

□ Residual knowledge/feedback clause

Warranties and Disclaimers

□ Basic warranties

  • - Ability to enter into agreement
  • - Compliance with applicable laws
  • - No pending or threatened litigation

□ Broad warranty disclaimer

□ No guarantee of revenue (unless appropriate)

No Agency

□ Agent relationship not intended

Limitations of Liability

□ Common limitation of liability exclusions

  • - Breaches of confidentiality
  • - Claims for which the vendor is insured
  • - Indemnification obligations
  • - Infringement of IP rights

□ Disclaimer of all other liability

Indemnification

□ Limited to violations of law and misuse of IP

Term and Termination

□ Renewal after stated term

□ Free ability to terminate

□ Termination for breach

Overview

Joint marketing agreements can take several forms. There is no one-size-fits-all for this type of contract. Generally speaking, joint marketing agreements are used in transactions in which two or more parties come together to jointly market a product or service. In some cases, the agreement can be limited to a simple contract for joint marketing and promotional efforts whereby the parties to the contract jointly market a product or service and agree to a revenue share arrangement for fees collected as a result of such efforts. Frequently these relationships are expanded to include referral arrangements in which one or all parties also refer potential customers to the other party or parties in exchange for monetary or other compensation. These types of agreements may also include product integration obligations and terms for jointly supporting mutual customers. Depending on the extent of those additional terms, separate, more detailed agreements may be required to fully address the parties’ respective integration and support obligations. However, in many instances, these agreements can be very simple and entered into to “get a deal off the ground.” They provide the basics and provide the framework for the parties to grow the relationship in the future.

Since joint marketing agreements generally reflect many, if not all, obligations as mutual, they force both parties to be reasonable in the language they may request. Knowing that a requested provision will be made mutual will cause the drafting party to be reasonable from the outset. This inherent “mutual assured destruction” aspect of joint marketing agreements can make them very easy and quick to negotiate.

Key Considerations and Essential Terms

Since the parties to a joint marketing agreement will be working closely together, two primary concerns arise. First, the parties will be sharing information about their products and, therefore, each will be concerned about protection of its intellectual property. Second, the parties will want to avoid any inference that is seen as either the other’s partner or agent, designations that can raise significant legal issues.

When drafting and negotiating a joint marketing agreement, consider these terms to ensure that the drafting and negotiation process is efficient and that your company’s business and legal objectives are achieved.

Determine the Scope of the Engagement

■ Because joint marketing relationships can take one of many different forms, the first step will always be to determine the scope of the engagement and ensure that the agreement covers all relevant activities in which the parties will engage.

■ Depending on the nature of the information to be shared between the parties, a nondisclosure agreement should be entered into prior to commencing substantive discussions. Critical confidential information may exchange hands prior to drafting and negotiating a definitive joint marketing agreement. You will want to ensure that the appropriate protections are in place with respect to that information. As discussed in Chapter 3 (Nondisclosure Agreements), the confidentiality provisions of the joint marketing agreement will take precedence over any confidentiality agreement entered into during negotiations.

■ A common error in these engagements is attempting to do too much in a single agreement. Except in instances where a highly specialized contract is used, joint marketing agreements should not be used for joint development work, significant engagements where the parties will integrate their support organizations, or instances in which the other party is in reality serving as a reseller. In those cases, a development or reseller agreement is more appropriate.

 
<<   CONTENTS   >>

Related topics