Drafts Know-How License Agreements for licensing trade secrets, confidential processes, and proprietary methodologies where value derives from secrecy rather than patents. Reviews transaction documents to extract deal terms, financial structures, and exclusivity provisions. Use when drafting know-how licenses, trade secret licenses, technology transfer agreements, or confidential information licensing agreements.
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name
know-how-license
title
Know-How License Agreement
description
Drafts Know-How License Agreements for licensing trade secrets, confidential processes, and proprietary methodologies where value derives from secrecy rather than patents. Reviews transaction documents to extract deal terms, financial structures, and exclusivity provisions. Use when drafting know-how licenses, trade secret licenses, technology transfer agreements, or confidential information licensing agreements.
Drafts a commercially balanced agreement licensing confidential technical knowledge, processes, and trade secrets — information deriving value from secrecy rather than patent disclosure.
Prerequisites
Collect before drafting:
Transaction documents — term sheets, LOIs, prior agreements with negotiated terms
Party information — legal names, entity types, jurisdictions, principal places of business
Technical description — functional description of know-how sufficient to define scope without disclosing secrets
Commercial terms — exclusivity, territory, field of use, financial structure, milestones
Regulatory context — export control applicability, industry-specific regulations
Quick Start
Extract deal terms from uploaded documents (see Document Review)
Draft agreement sections in order (see Agreement Sections)
Precision is critical — ambiguity destroys enforceability and trade secret protection.
Key terms: Know-How/Licensed Technology (specific enough to enforce, flexible for updates; use confidential technical schedule if needed) · Licensed Territory (geographic precision; subcategories if rights vary) · Field of Use (applications, industries, product categories with clear boundaries) · Confidential Information (broad capture + standard exclusions: public domain, independent development, prior knowledge, third-party receipt) · Improvements/Derivative Know-How (modifications only vs. related developments) · Net Sales (inclusions/exclusions, bundled product valuation, affiliate transfer pricing) · Affiliate · Milestone Events (objective triggering criteria)
3. Grant of License
Specify exclusive / sole / non-exclusive — define each in context
Amount, timing, conditions precedent, creditability against royalties
Milestones
Defined events, objective criteria, amounts, payment timing
Running royalties
% of Net Sales or per-unit; bundled product allocation; stacking discounts
Minimum annual royalties
Amount per year; shortfall consequence (conversion, termination, or pay-up)
Payment mechanics
Currency, FX rates, frequency, method, late interest
Records & audit
3–5 year retention; annual audit by independent CPA; cost-shifting if underpayment exceeds threshold
5. Confidentiality & Trade Secret Protection
Failure here destroys trade secret status — this section is outcome-determinative.
Standard of care: at least same as own most sensitive information, no less than reasonable care
Physical, technical, and administrative safeguards required
Permitted disclosures: need-to-know only, written confidentiality agreements from recipients
Written disclosure log maintained; available to licensor on request
Compelled disclosure: prompt notice, cooperate on protective orders, minimum disclosure
Survival: indefinite (until public domain through no breach)
Return/destruction on termination with officer certification
Residual knowledge: address explicitly — cessation + destruction, or continued use subject to ongoing confidentiality and royalties (most litigated post-termination issue)
6. Technology Transfer & Support
Documentation deliverables: format, scope, timeline
Licensor: authority to grant license, ownership/control of know-how, trade secret status maintained, no known third-party infringement (knowledge qualifier), disclosure of known limitations.
Licensee: authority to enter agreement, lawful use and regulatory compliance, technical and financial capability, export control and anti-corruption compliance.
Disclaimers (conspicuous text — bold or caps): AS-IS for functionality/accuracy/completeness/fitness, no non-infringement warranty (licensee responsible for FTO), disclaim implied warranties of merchantability and fitness for particular purpose.
9. Indemnification
Licensee indemnifies: use, modification, manufacture, sale; product liability; combination with other tech; failure to follow instructions
Licensor indemnifies: third-party IP claims re know-how as provided (often limited to rep/warranty breach)
Procedures: prompt notice, indemnifier controls defense, no settlement admitting liability without consent, late notice relieves only to extent of material prejudice
