Like others, a joint venture to develop software is fraught with potential conflict. Particularly relevant to these joint ventures is the difficulty in foreseeing the ability of one party to furnish the technological expertise represented in the halcyon days when the parties execute the agreement and anticipate a generally smooth process. In addition, another pitfall of software-related joint ventures is the tendency of unforeseeable technological advances that moots the original purpose of the agreement because of the newfound obsolescence of the proposed software. Finally, in a highly technical joint venture, allocation of responsibility, particularly when the terms of the agreement are ambiguous, is rife with a potential dispute given that parties’ do not necessarily want to expend the time and funds on responsibilities that could shift the burden to that party.

The parties to a joint venture to develop virtual reality software in the education space recently found themselves in litigation concerning these issues. See Workplace Techs. Research v. Project Mgmt. Inst., No. 18cv1927JM (MSB), 2019 WL 3804019 (S.D. Cal. Aug. 13, 2019). In this case, the dispute arose over multiple software development agreements, including an agreement that derived from a purported failure to create software required by the initial agreement. After granting the defendant’s motion to dismiss for failure to state a claim, the court reached a different conclusion when reviewing the next iteration of the complaint in part because the plaintiff could show alleged specific breaches by the defendant that pertained to technological requirements arguably unassigned to either party. This is emblematic of a software-related joint venture.