By Gene Slowinski, Edward Hummel and Robert Kumpf

Technology is the currency of the new millennium. Firms that develop and/or acquire proprietary positions in leading edge technologies create a solid foundation for growth. However, the days when one firm internally creates all of the technology it needs to compete in the market place are over. Even simple products contain a bewildering number of sophisticated technologies as customers demand capabilities only dreamed about a few years ago.

To gain access to this technology a company can (a) develop the technology internally (b) obtain it from outside parties via license/purchase or (c) jointly develop the technology with an external firm. This article focuses on the third possibility, developing technology through a joint development agreement. Specifically, we will describe the issues and identify industry practices surrounding protecting the firm's intellectual assets (IA) during interactions with outside parties.

The number of collaborative research and development agreements is increasing rapidly. Industrial Research Institute member firms are engaging small high technology companies, Federal Laboratories, Universities, international firms and competitors in ways not dreamed of just five years ago. Central to these collaborations is the need to share proprietary intellectual assets to meet the objectives of the collaboration. Equally important is the need to protect that information from unintended use.

The nature of intangible assets such as know how and trade secrets is a barrier to their protection. They are easily shared, travel effortlessly in peoples' minds, and resist being categorized into neat little piles labeled proprietary and non-proprietary knowledge. To complicate matters further, know-how is fun to talk about. Business and technical people are naturally drawn into discussions of how a particular technology works, or the reasons why one technology will outperform another in the marketplace. While these conversations are interesting, employees may inappropriately divulge proprietary information. In this article we will not distinguish between "know how", which is information or skills required to do something useful, or "trade secrets", which are valuable information the firm takes specific actions to protect. In particular there are statutory definitions of "trade secrets" that are not especially relevant to this discussion (see sidebar). The real issue is protecting proprietary information, i.e., valuable knowledge a firm wishes to protect from unintended use.

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