Over the past couple of weeks, the Helpline has received a lot of questions regarding know-how, how to define it and licensing possibilities. This is what has inspired today’s post to the benefit of our readers and Helpline users.
Know-how, trade secrets or confidential information. These are terms used to describe proprietary information used in the trade, that provide a competitive advantage and the value of which rests in its secrecy.
This information can be kept in documents or held by people in the form of skills.
Know-how is a close relative of trade secrets but far more difficult to inventory. It is an accumulation of information, knowledge, and experience (some of which may qualify as trade secrets, some not) enabling its possessor to achieve certain results which would otherwise be unattainable. This explains its considerable value in an economy based on competition, productivity and commercial ability.
Technical know-how is a set of technical, technological and organizational knowledge used in the training and production process of a company.
Commercial know-how comprises knowledge related to the commercial phase: presenting offers, promoting goods and services, pre- and post-sales assistance…
Just as trade secrets, in order for know-how to retain its value, it must remain confidential and sharing must be limited.
So how can you protect your know-how?
Within your organization
- Identify and trace your know-how, make sure that each copy you release of any document is numbered and you can trace them once in circulation. All drafts should be destroyed;
- Evaluate the value of your know-how;
- Develop a protection policy;
- Review your training procedures and makesure your employees adhere to it;
- Limit access to only those persons that need to know the information;
- Make sure you put in place a policy for visitors (limit the places and information they have access to);
- Maintain computer security;
- Review employment contracts and make sure you include confidentiality clauses.
To the question, can I commercialize my know-how? The answer is most definitely yes.
Transferring your know-how can be done in various ways. One way is for the licensor to put at the disposal of the licensee some confidential documentation describing confidential processes, actions or steps to follow, best practices, or any additional knowledge necessary to fully operate. Another way is the possibility for both parties to work together, so that the licensee can "watch and learn", think of it as a secondment but at commercial level.
Of course, such know-how licences can be risky (you cannot "take back" know-how once it has been learned) and for this reason the licensor should ensure that strong confidentiality obligations are put into place.
Know-how is valuable as long as it remains secret. In case of conflict or infringement you might want to consider the option to resort to alternative dispute resolution mechanisms. Indeed, An arbitration clause seems to be necessary in order to preserve the confidentiality of the litigation and of the trade secrets themselves in such cases.
Contrary to court litigation, these alternative dispute resolution procedures can be adapted to the specific needs of the parties involved in a given case. But, most importantly, mediation and arbitration also offer the advantage of keeping the proceedings and their outcomes confidential. This quality is all the more important in this context where sensitive technical or business information as well as trade secrets or know-how can be exchanged, which potentially places commercial reputations at stake.
Although know-how does not require registration, it requires a lot of organizational and security efforts from the knowledge holder.
We hope that you found this article useful. We will see you next week for our weekly update.