name know-how-license-agreement language en description Drafts U.S. know-how (trade secret) license agreements covering scope, exclusivity, field-of-use, territory, consideration, confidentiality, tech transfer, diligence, and compliance. Use when licensing confidential technical information, manufacturing processes, trade secrets, non-patent IP, or process know-how; trigger keywords: know-how license, trade secret license, technology transfer agreement, confidential information license, process license, technical know-how, manufacturing know-how. tags ["agreement","drafting","transactional"]
Know-How License Agreement
License agreement for confidential technical information and trade secrets where the licensed IP is not covered by patents. Sensitive know-how detail belongs in confidential exhibits, not in the agreement body.
Prerequisites
Parties — legal names, entity types, jurisdictions, signatory authority.Know-how scope — technical description, confidentiality level, exhibit references.Field & territory — permitted uses, industries, geographies, manufacturing vs. sales scope.Exclusivity — exclusive / sole / non-exclusive; sublicensing position.Economics — upfront fee, royalties, milestones, minimums, audit terms.Transfer plan — documentation, training, support, timelines.Diligence — milestones, reporting, commercialization obligations.Compliance — export controls, regulatory approvals, industry rules.Prior agreements — existing NDAs, collaboration agreements, or IP licenses.
If any prerequisite is missing, flag it as an open item and proceed with labeled assumptions.
Step 1: Deal Intake
Populate the intake table from term sheet, tech schedule, and counsel input.
Item Required Detail Source Parties Full legal name, entity type, jurisdiction, address Term sheet / records Know-how High-level description, confidentiality qualifiers Tech schedule Field of use Industry, product, application limits Term sheet Territory Countries/regions, manufacturing vs. sales scope Term sheet Exclusivity Exclusive/sole/non-exclusive, licensor carve-outs Term sheet Sublicensing Allowed scope, consent requirements, pass-through terms Term sheet Consideration Upfront, milestones, royalties, minimums Term sheet Royalty base Net sales definition, deductions, bundles Finance notes Support Training, tech transfer, validation, response times Tech plan Improvements Ownership, grant-back, joint development Negotiation Compliance Export, regulatory, anti-corruption Compliance team Disputes Governing law, venue, arbitration Counsel
Step 2: Draft Definitions
Term Drafting Notes Know-How / Licensed Technology Identify by category + confidential schedule reference Confidential Information Standard exclusions + trade secret status Field of Use Clear boundary conditions and examples Territory Manufacturing vs. sale/import scope Net Sales Allowed deductions list Improvements Scope definition and ownership triggers Affiliate Control threshold and inclusion criteria Milestone Objective criteria + dates
Step 3: Draft Agreement Sections
Follow this section order:
Financial Terms
Upfront Fee: $[amount], due [date], creditable against royalties: [Yes/No]
Milestones:
- [Objective event] -> $[amount] due within [days]
Minimum Royalties:
- Year 1: $[amount]
- Shortfall consequence: [pay shortfall / convert exclusivity / termination]
Royalties:
- Rate: [x% of Net Sales / $ per unit]
- Bundled products: [allocation method]
- Affiliate sales: [FMV or transfer price standard]
- Reporting: [quarterly/monthly] within [days]
- Audit: [once/year], underpayment threshold [x%] shifts costs
Confidentiality Controls
Improvements Ownership
Scenario Ownership License Back Licensor-only Licensor Included or separate fee Licensee-only Licensee Grant-back terms Joint Joint / by inventorship Cross-license scope
Termination Triggers
Trigger Cure Period Effect Material breach 30-60 days Termination Non-payment Short cure Termination or conversion Confidentiality breach None Immediate termination Insolvency 30-90 days Automatic termination Diligence failure N/A or short Convert exclusivity or terminate
Step 4: Attach Exhibits
Exhibit A — Confidential know-how descriptionExhibit B — Tech transfer deliverables and timelineExhibit C — Milestones and reporting formatExhibit D — Royalty report template
Guidelines
Keep sensitive know-how detail in confidential exhibits, not the agreement body.
Exclusivity must be paired with diligence milestones or minimum royalties.
Define royalty base so it is mechanically auditable; specify deductions tightly.
Include explicit export control language when export-controlled technology is involved.
Use bold or caps for warranty disclaimers and limitation of liability.
For international deals, confirm governing law and arbitration seat; flag choice-of-law concerns.
Mark uncertain citations or statutory references with [VERIFY].
