Pandas lead the way in promoting cross-border links

The project is the culmination of many years of hard work by various organisations and individuals, including political co-operation at the highest level.

While the primary purpose of the project relates to the conservation of giant pandas, there will be other significant benefits including the expectation that the giant pandas attract thousands of additional visitors to Scotland and generate considerable revenue.

The project will strengthen trade and cultural links with China and play a vital role in the global programme to protect and conserve the giant panda.

For Scotland's business community, the project, while unique, is a very good example of how to structure cross-border deals where two parties agree to develop a product or service for non-commercial or commercial reasons. In this case, it just happens to be two giant pandas that have shown us how it should be done!

Scottish companies are often dissuaded from trading with overseas partners because there is a perception that cross-border agreements can be high risk, particularly where there is a considerable investment of time and money.

Agreements can go wrong but, if the process is approached properly, risk can be minimised and commercial and other opportunities maximised.

At the heart of many cross-border agreements, specifically licensing agreements, parties will be collaborating to generate increased value from the intellectual property (IP) relating to a unique product, process or idea.

The product, process or idea may have been imported to Scotland and exploited by a Scottish business. Alternatively, a Scottish business may be looking to export its IP into an overseas market where a local partner then develops the business.

The former, for example, might involve a business process that gives a Scottish business competitive advantage in the UK. The latter might involve a technical innovation developed in Scotland that has potential overseas, but requires a commercial partner for the local market.

In either example - importing or exporting of IP - the marriage can be long and fruitful but the vows need to be clearly and carefully agreed at the outset.

Ring-fencing the rights of each party and identifying responsibilities, liabilities and the share of the gain - commercial or otherwise - is more important than ever in a world where IP underpins the value of all goods and services.

For Scottish businesses inspired by the giant pandas story, there are several important principles to consider when thinking about cross-border technology transfer agreements such as:

• IP confidentiality: both parties will be sharing unique technical know-how and it is essential the IP behind the original asset is kept confidential by the partner.• New IP: it is quite possible IP, in the form of products or process or know how, will be created out of the licensing agreement and that it has potential value. The licensing partner may think that it owns the new IP because it has been generated as a result of its use of the original product or process or know how. It is important to ensure that any consequences arising from such possession are properly agreed at the outset, and that there is a process for dealing with any additional opportunities that might arise.

• Territorial or sector licensing: it is essential that the territory of the licensing agreement and the industry sector to which it applies is clearly defined.

• Dispute resolution: in the event of a dispute, the outcome will be determined by the ruling authorities in the relevant jurisdiction. It is sensible to agree the jurisdiction relating to the agreement and to do so at the outset or at least agree the forum for disputes - whether the courts or arbitration.

There is enormous potential for more cross-border deals and for Scottish companies to exploit these opportunities.

The success of bringing the giant pandas to Scotland has shown that it can be done and at the heart of the success of any deal is to ensure the agreement terms are clear and separately, that all IP is properly protected from the outset.

• Euan Duncan is an IP partner at law firm McClure Naismith and provided specialist advice to the RZSS on the UK giant panda project.