Between the world of patents, where technical inventions are granted a monopoly against all comers, and the world of copyright, where specific designs are protected from plagiarism, there exists a broad spectrum of technical and business ideas which are both too broad to qualify for useful copyright protection and not sufficiently inventive to qualify for patent protection.  This spectrum is generally termed "know-how" and, whilst it does not have any particular statutory or treaty protection, is highly valuable and is rightly treated as a marketable, saleable and licensable commodity.

Know-how is only of value to the extent that it is not publicly available.  There is no protection if the "secret formula" leaks to the public - once it is out there, the cat cannot be put back in the bag!  Accordingly all know-how agreements are, essentially, agreements to keep confidential certain items of knowledge.

Crucial to know-how sale or licensing is the strength of the confidentiality of the relevant information.  It is common for agreements to contain detailed warranties that the relevant information has been kept confidential at all times, together with, in licences, strong commitments that the information will not be disclosed.  Within this ambit, it must be born in mind that a lot of know-how, in order to be commercially useful, has to be disclosed to the public in the form of a product or service.

In general the only useful remedy available to the "owner" of know-how is an injuction to stop someone else disclosing or using the information.  It is common in know-how exploitation agreements to include terms which are aimed at making obtaining injunctions easier or even automatic, but these are of somewhat dubious effect, depending on which courts adjudicate any application.

When licensing the use of know-how, particularly on an exclusive basis, a number of competition law issues need to be kept in mind, particularly as to the duration of the licence and restrictions on the licensee from using improvements to the know-how.  In addition, careful thought needs to be given as to whether any know-how that is disposed of or licensed is likely to constitute a patentable invention and, if so, by who, in which case particular obligations will be required.

VS&H have been working with know-how exploitation and transfer agreements for a number of years and have deep experience of their vagaries.

For further information please contact:

john.davies@vshlaw.co.uk or

martin.jinks@vshlaw.co.uk