Dangers of Playing Nice: The IP Pitfalls Associated with Collaborative Branding




Collaborative branding is a marketing strategy where two businesses collaborate to increase the value of their brands. This co-branding allows the partner companies to share the costs of the collaboration while also expanding into each other’s consumer audiences. An example of this collaborative model is the Nike/Tiffany shoe that merges the iconic Nike swoosh and the famed Tiffany & Co. blue. This new brand creates a product using the strengths of both parties to gain consumer interest and create excitement in a new consumer base. Despite all the benefits that can come from a collaborative partnership, businesses should take efforts to protect their current respective intellectual property rights. Equally important, the parties should consider the ownership rights of the new products created under the collaboration.

This is where a collaboration agreement can help. A collaboration agreement between the parties outlines the relationship of the two parties and involves the cross-licensing of IP rights for commercial activities. In any collaboration agreement, the parties will cross-license the IP they contribute, but the parties should plainly state the scope of the license and how the IP will be used in the collaborative partnership. Both parties also should lay out IP assets created prior to the collaboration. The allocation structure of the ownership of the newly created IP in the collaboration agreement can differ based on the parties’ interests. The agreement could create joint ownership in the new IP or perhaps one party owns the entirety of the newly created IP. If the parties decide on joint ownership of the newly created IP, the agreement should also contemplate which party is responsible for the protection and registration of the IP rights.  

Confidentiality of the intellectual property is another important consideration to take into account while drafting the collaboration agreement. Collaboration between the parties may include the exchange of confidential information, and the agreement should clearly lay out how that information is treated by both parties. While co-branding and collaboration can expand the business opportunities of the participants, a well-crafted collaboration agreement will increase the chances everyone benefits from the experience.

Why is this important to your business? No one goes into a collaboration thinking the relationship would be bad for business, but not all collaborations have positive results. For example, Peloton and lululemon had a successful collaboration that ended prior to a willful infringement lawsuit by lululemon against Peloton for infringement on several design patents. The best way to take full advantage of a possible collaboration is to protect your intellectual property from the beginning with the help of an experienced IP attorney.