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A Guide to IT Contracting by Michael R. Overly, Matthew A. Karlyn

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11
Joint Marketing Agreements
CHECKLIST
Pre-Engagement Considerations
Scope of engagement
Nondisclosure agreement
Marketing Obligations
Exhibit with precise marketing obligations
Mutual agreement
Responsibility for expenses—shared
Referral Arrangements
Denition of who is a referral
Referral period (anything outside of period is not a referral)
Compensation to referring party
Audit rights
Condentiality
Protection of all condential information exchanged
Overrides any NDA entered into in pre-engagement
Intellectual Property Issues
Any soware or products are provided as is
Return of soware/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
132  •  A Guide to IT Contracting: Checklists, Tools, and Techniques
Warranties and Disclaimers
Basic warranties
S Ability to enter into agreement
S Compliance with applicable laws
S 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
S Breaches of condentiality
S Claims for which the vendor is insured
S Indemnication obligations
S Infringement of IP rights
Disclaimer of all other liability
Indemnication
Limited to violations of law and misuse of IP
Term and Termination
Renewal aer stated term
Free ability to terminate
Termination for breach
OVERVIEW
Joint marketing agreements can take several forms—is no one size ts 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 eorts whereby
the parties to the contract jointly market a product or service and agree
to a revenue share arrangement for fees collected as result of such eorts.
Frequently these relationships are expanded to include referral arrange-
ments in which one or all parties also refer potential customers to the other
party or parties in exchange for monetary or other compensation. ese
types of agreements may also include product integration obligations and
terms for jointly supporting mutual customers. Depending on the extent of
Joint Marketing Agreements • 133
those additional terms, separate, more detailed agreements may be required
to fully address the parties’ respective integration and support obligations.
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 either is seen as the other’s partner or agent,
designations which can raise signicant legal issues.
When draing and negotiating a joint marketing agreement, consider
these terms to ensure that the draing and negotiation process is ecient
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 dier-
ent forms, the rst step will always be to determine the scope of the
engagement and ensure that the agreement covers all relevant activi-
ties 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 com-
mencing substantive discussions. Critical condential information
may exchange hands prior to draing and negotiating an denitive
joint marketing agreement. You will want to ensure that the appropri-
ate protections are in place with respect to that information. As dis-
cussed in Chapter 3 (Nondisclosure Agreements), the condentiality
provisions of the joint marketing agreement will take precedence over
any condentiality 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, signicant 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 devel-
opment or reseller agreement is more appropriate.

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