Control Without Acquisition: Intellectual Property, Corporate Transactions, and Contractual Control in Cross-Border Technology Partnerships

https://doi.org/10.5281/zenodo.22856149

Abstract

Escalating use of cross-border technology partnerships provides opportunities to companies to gain substantial commercial and strategic leverage of key technology without actually becoming the technology owner. A range of contractual mechanisms may be considered, such as minority investments, joint ventures, strategic alliances, licensing agreements, cloud and infrastructure agreements, and other contractual arrangements, which may result in a separation of harmonious corporate ownership and control over IP, trade secrets, know-how, technological access or commercialization. However, the definitions and the legal framework for such arrangements is scattered throughout different branches of the law, including corporate law, intellectual property law, contract law, commercial law, competition law, and international economic law. This article will focus on a legal construction of control over technology which does not overlap with acquisition of the firm, and acquisition of its underlying intellectual property. It establishes a workable structure to differentiate corporate control from IP control, contractual control, information control, and technological access and uses that structure to analyze cross-border technology relationships that feature strategically significant intangible assets. The article examines the legal regimes for share transactions, IP licensing, trade secrets, contractual restrictions, technology transfer and other cross-border economic regulation to show that minority stakes, IP licenses, technological and commercial influence provided by means other than traditional acquisition, access restrictions, infrastructure dependence and confidential know-how can combine to give significant technological and commercial influence. It posits that under a conventional ownership-based approach, the characteristics of these partnerships involving the latest technologies can be overlooked, as the legally-relevant control over the project may be split among several rights, contracts, and dependencies, not just a proprietary or corporate relationship. The article aims to suggest a more holistic method of measuring functional technological control, and its consequences for international technology markets, IP commercialization as well as cross-border technology transfers through legal structuring and regulation.