Joint venture agreement
In this dispute concerning intellectual property rights, the parties formed a joint venture in 2025 to develop and commercialize “grounding technology” for athletic shoes. The technology was intended to help reduce inflammation and muscle pain and support recovery after exercise.
The joint venture agreement provided that NIS would transfer to the joint venture company, SGF, free of charge, all intellectual property rights required to exploit the technology. NIS was also required to execute all documents necessary to effect the transfer.
Dispute over IP rights
Although the transfer documents had already been prepared, NIS ultimately refused to cooperate in transferring several patent rights. NIS argued that it had rescinded the agreement out of court on the ground of mistake or, in the alternative, fraud. According to NIS, it had been led to believe that it would enjoy a lasting benefit from a favorable profit-sharing arrangement within the joint venture. When it became clear that the future admission of new shareholders could dilute its economic position, NIS concluded that it had entered into the agreement on the basis of a misrepresentation of the facts.
Development and exploitation of technology
In preliminary relief proceedings, the Amsterdam District Court held that intellectual property rights that are central to a joint venture must be transferred to that joint venture as agreed.
In essence, the court held that the agreement remained valid and that NIS was required to perform its contractual obligations. The agreement included a waiver of the parties’ right to rescind it. Moreover, the documents showed that the profit-sharing arrangement had been negotiated between sophisticated parties, each represented by its own legal counsel. In the court’s preliminary assessment, there was insufficient basis in the summary proceedings to assume that mistake or fraud had occurred.
The court further observed that the dispute primarily concerned the future profit-sharing arrangements within the joint venture. In its view, that dispute did not justify NIS suspending its separate obligation to transfer the intellectual property rights.
A key factor in the court’s balancing of interests was that the joint venture had been established specifically to develop and exploit the technology. For that purpose, SGF needed access to the relevant intellectual property rights. Without those rights, its ability to secure investment and financing and to collaborate with third parties would be impeded. The court therefore considered it undesirable for SGF to remain at a standstill pending proceedings on the merits:
“It is not in dispute that the parties intended to entrust SGF with the development and exploitation of the grounding technology, and it is plausible that SGF must have the relevant intellectual property rights to attract the necessary financing and collaboration partners. NIS will therefore have to transfer these intellectual property rights to SGF, as agreed with SGH in the Agreement. SGH cannot be expected to await a ruling from the trial court on this matter, as this would result in SGF remaining inactive in the meantime, which would not benefit the development and exploitation of the grounding technology. This is not in the interest of SGH/SGF nor in the interest of NIS.”
Order to transfer patent rights
The court ordered NIS to cooperate fully in transferring the relevant patents and patent applications, subject to a penalty payment for non-compliance. Pending the transfer, NIS was also prohibited from transferring, pledging, licensing, or otherwise disposing of the relevant IP rights, with that prohibition backed by a separate penalty payment.
The decision highlights three key points:
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A party contributing IP rights to a joint venture should clearly define the economic consideration it will receive in return.
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Profit-sharing arrangements, dilution, and future investment rounds warrant particular attention during contract negotiations.
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A dispute about the parties’ economic relationship does not automatically entitle a party to suspend its other contractual obligations.
The court’s recognition that clear ownership and transfer arrangements for IP rights serve the interests of all parties is particularly relevant to technology-driven collaborations. Such clarity is essential not only for attracting investors and commercial partners, but also for bringing the technology to market.
It is therefore essential to establish clear arrangements on both IP rights and economic control from the outset.
