BACKGROUND

This section refers to close technical partnerships. Supplier partnerships for better pricing, or to secure supply, are addressed above in a previous section.

The company should only select partners for technologies needed by its large market segments and where it needs a high degree of technical help. The partner selected would be for technologies where the company lacks expertise, are not undergoing rapid change, or give the company manufacturing problems. Partnerships are not needed for old technologies where the company does not have problems.

The partner must have a good R&D staff and the companies contact with them must be through a technical person. A sales or marketing person should not be used as a go between.

The company should know after one to 1.5 years if the partnership is working.

Example of a Draft Memorandum of Understanding

OVERVIEW: The two companies have elected to further build upon their existing partnership relationship. To do this the supplier company has placed a senior technical representative, part-time, into the Company’s technical center. This increased technical support is expected to increase the breadth and depth of the materials capability available to the Company. Development and commercialization of unique products for both companies is one expected result. Another expectation is that the product customization, technology commercialization, and product development times will decrease.

This is an experimental, pilot program. Every effort is being made to ensure its success. Nonetheless, it may be terminated at any time, without explanation, by either party.

The confidentiality of the Company, its customers, and its other supplier’s proprietary information is being maintained. Any breach of this confidence will be cause for termination of the employees involved, regardless of employer.

DETAIL:

The following is a list of potential issues, as well as solutions, associated with the presence of the supplier’s technical person at the Company’s technical center:

1. Possible conflict with other of the Company suppliers.
The following safeguards are designed to protect confidential work being done with other of the Company suppliers:
a. The supplier employee’s visit at the Company’s technical center will be limited to approximately one week per month to allow development time with other suppliers.
b. While at the Company’s technical Center the supplier’s employee will make every effort not to knowingly come in contact with other supplier’s information. Therefore: no notes will be taken of the pilot plant or analytical samples on any competitive project; if materials and samples from competitors are accidentally observed, no conveyance of their existence back to the supplier is permitted; there will be a letter of intent from the supplier’s chief technology officer to the supplier’s employee stating that under no circumstances does this plier want to receive any such competitive information from the source, and that sharing of such information is grounds for termination of employment; the Company’s personnel will make every effort to not knowingly discuss any information deemed proprietary.
c. To lessen the impact on the Company’s other win-win supplier relationships, every effort will be made not to create an issue of this relationship. Therefore: no permanent nametags will be issued, only the customary visitors tag; discussions of her special relationship will be limited to technical groups and top management; the above over your information will be used to clarify her relationship to others who inquire.

2. Supplier’s relationship with customers other than the Company.
a. The Company will not aggravate other supplier customer relationships
b. The Company will limit discussion of our special relationship to the Company’s technical group and top management.
c. The above overview information will be used to clarify the relationship to others who inquire.

3. Conflicts with the Company’s own proprietary development work.
Some of the Company’s proprietary technology, as well as the Company’s development programs, need to be protected. Examples are the Company’s manufacturing hardware, marketing strategy, and customer contacts. Whenever discussion of these subjects with the supplier person is necessary, the Company’s technical director will approve the content and spirit of the information exchange. The Company’s technical director will also be extended an invitation to attend all meetings were such information will be discussed. It is intended this requirement be relaxed as the experiment proceeds and the relationship grows. Relaxation of the standard requires both the Company’s technical director and the supplier person’s agreement. All at the Company’s technical Center the supplier employee will make every effort not to come in contact with the Company’s confidential information. Therefore: No notes will be taken of pilot plant or analytical samples unless they relate to the performance or evaluation of suppliers materials; if the Company’s confidential materials and samples are accidentally observed, no conveyance of their existence back to the supplier is permitted.; A letter of intent from the supplier CTO to the supplier employee stating under no circumstances does the supplier want to receive any such Company information, and that conveyance of such information is grounds for termination of employment.

4. Conflict with Company’s customers
The Company frequently works with other customers under restrictions of mutual confidentiality agreements, expressly prohibiting the disclosure of Company will information to third parties; this information must be protected. The supplier representative will be asked immediately leave any meeting were such information is being discussed.

While at the Company’s technical Center the supplier’s employee will make every effort to not come in contact with the Company’s customers’ confidential information. Therefore: No notes will be taken of pilot plant or analytical samples on any competitive projects; if the Company’s customers confidential materials and samples are accidentally observed, no conveyance of their existence back to the supplier is permitted; a letter of intent from the supplier CTO to the supplier’s employee stating that under no circumstances does the supplier want to receive any such Company customer information, and the conveyance of such information is grounds for termination of employment; supplier will sign nondisclosure agreements with the Company’s customers if required.

5. Reciprocity
The Company’s programs will inevitably call for the presence of company’s researchers at supplier facilities. The guidelines established above should also apply to the activities of a Company’s person at a supplier’s location.

6. The scope of the supplier’s involvements and related costs.
The supplier’s person’s involvement should include an advisory role, an identifier of supplier’s resources role, and an active researcher role. Supplier will bear the costs associated with employee in the trials at supplier’s locations. The Company will bear the costs of trials at the Company’s technical center and the Company’s plants.

7. Reporting arrangements and accountability
The Company’s technical director is designated to coordinate the supplier’s person’s activities. The technical director or his designate will also be responsible for adhering to the mutually agreed-upon guidelines and maintaining confidentiality on both sides.

8. Assignment, ownership and exclusivity related intellectual property
Patentable inventions are the intellectual properties of those who can document their conception. Therefore, it is important for both the Company and supplier people to keep accurate, dated and properly witnessed notebooks. It is possible that some ideas will be jointly arrived at and become joint intellectual property of co-inventors from both companies. Each party will keep the other informed as any intellectual property rights are pursued, be these joint or independent.

Jointly developed ideas assigned either party, will be held for the exclusive use of each party for a period of five years from the filing date agreed-upon by the Company and supplier or the termination of this agreement. They will not be licensed to third parties without the consent of both parties for the same five year period. In the event one of the parties is unable or unwilling to support the other party’s potential business levels, after period of one year, the parties will negotiate, in good faith, compensation to be received by the party not fully participating. This competition shall, in no case, put one of the parties at a competitive disadvantage. Jointly developed ideas are those which a person would not have created without exposure to the information provided by the other party.

The assignee is responsible for obtaining patent and maintenance of the patent once issued. The assignee is also responsible for enforcing the patents against others.

If one party elects not to file, cause to issue, maintain, or defend a patent, its rights are forfeited to the other party to pursue.

9. Duration
This arrangement can be terminated at any time, without explanation, by either party. Renewal and changes will be formally discussed once per year.

Example Goals Survey

Instructions:

The supplier is conducting a survey to provide information which will be used to improve its products and services. We ask your help in supplying this information by filling out the following questionnaires honestly and accurately as possible. The scores you record on this questionnaire will be included with those of a number of other survey respondents reported in such a way that the responses of a particular individual cannot be identified. Your written comments weekly do with those made by others returned in a typewritten form to the above workgroup. Thank you for participating.