Exploration and development of oil and gas reserves increasingly requires costly, tailored technologies and enhanced safety and environmental measures. This is due in part to greater desire to develop unconventional oil and gas resources, such as shale gas and tight oil, and to develop reserves in more remote and environmentally-sensitive areas. Exploration and production companies have been developing deepwater reserves, shale plays, and other unconventional sources, but many lack the infrastructure to gather and process the resulting oil and gas. As a result, the industry has seen a rise in joint ventures between upstream and midstream companies that have the capacity to transport and store gas or crude oil, as well as joint ventures between two or more upstream companies.
Although joint ventures can help companies spread capital costs, overcome technological limitations, and mitigate risks, they also create potential pitfalls for companies with intellectual property assets. For example, a company may need to grant its joint venture partners a license to use its patented technologies or even share its trade secrets and other know-how with those partners, who may be industry competitors. Additionally, joint ventures can lead to development of new innovations, and disputes may arise as to who owns the resulting intellectual property and has the right to use it. Protecting these valuable intellectual property assets is an aspect of managing joint venture and joint development projects that is often overlooked. This paper will outline potential perils of joint ventures in the energy industry and discuss strategies to protect intellectual property portfolios when entering these agreements.
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