What's the difference between a know-how license and a patent license?
A know-how license transfers confidential technical information, trade secrets, and proprietary processes that derive value from secrecy, while a patent license grants rights to publicly disclosed inventions. Know-how licenses require extensive confidentiality provisions and careful scope definition since the licensed information isn't publicly available. They often involve ongoing technical support and training that patent licenses don't require.
How should royalties be structured in a know-how license agreement?
Royalties typically include upfront fees, milestone payments tied to development or commercialization achievements, and ongoing royalties based on net sales or per-unit amounts. The agreement must precisely define the royalty base, permitted deductions, minimum annual royalties for exclusive licenses, and payment timing. Audit rights and record-keeping obligations are essential to verify royalty calculations and prevent disputes.
What confidentiality provisions are necessary to protect trade secrets?
Effective trade secret protection requires obligations to maintain confidentiality using reasonable care, restrictions on disclosure to only those with a need to know, requirements for written confidentiality agreements with recipients, and procedures for handling legally compelled disclosures. The agreement should specify that confidentiality survives termination indefinitely and include provisions for return or destruction of all confidential materials upon termination.
How do I define the scope of a know-how license without disclosing confidential details?
Use functional descriptions of technology categories combined with confidential technical schedules that provide detailed specifications. Define the licensed field by industry, application, or product category rather than by specific technical details. The grant clause should clearly establish exclusivity, territorial limits, and permitted uses while reserving all rights not expressly granted to the licensor.
What happens to improvements and derivative know-how developed by the licensee?
The agreement should explicitly address ownership of improvements, typically providing that licensee improvements become licensee property subject to grant-back provisions requiring the licensee to license improvements back to the licensor. Specify whether grant-backs are exclusive or non-exclusive, royalty-bearing or royalty-free, and whether the licensor can sublicense improvements to other licensees. Joint improvements developed through collaboration should be addressed separately with clear ownership or cross-license provisions.
Can CaseMark handle international know-how licenses with cross-border issues?
Yes, CaseMark can draft international know-how licenses addressing export control compliance, multi-jurisdictional confidentiality requirements, currency and tax issues, and choice of law considerations. The AI incorporates provisions for regulatory compliance in different territories, addresses transfer pricing for inter-affiliate transactions, and can structure dispute resolution through international arbitration when appropriate for cross-border technology transfers.