Know-How 101 / How to prevent your know-how from being stolen or imitated?


Ekrem Ayhan Çakay

Know-How 101 / How to prevent your know-how from being stolen or imitated?

Know-how refers to practical understanding of how to do something, as opposed to "know-what" (facts), "know-why" (science), or "know-who" (network). Because know-how is frequently implicit, it might be difficult to communicate to another person by writing it down or verbalizing it.

Know-how is a component in the transfer of technology in national and international environments, coexisting with or separate from other IP rights such as patents, designs, trademarks and copyright, and is an economic asset in the context of intellectual property. Know-how should be transformed into a trade secret before being conveyed in a formal agreement when it is transferred on its own.

Figure 1

In a nutshell, know-how is "private intellectual property" that might be considered a forerunner to other intellectual property rights. As stated above in Figure 1, one can create a new asset by using Techin2B platform and then can freely choose the different know-how types.

What about Show-How?

Show-how is a diluted form of know-how because even a walk-through of a manufacturing plant provides crucial insights to the client's representatives into how a product is developed, assembled, or processed.

The typical content of technical assistance agreements is an expanded program of show-how in which the licensor firm, if one is involved, conducts a comprehensive training program to the client's workers on-site and off-site. No "license" is provided as a result of such training.

Figure 2

By using Techin2B platform, it is possible to have a chance for evaluating your know-how classification and progress even if it’s a show-how with on-premise or cloud storage options. As showed in Figure 2, all you need to do is leaving a note to about your evaluation concerns from my workspace button to those who are responsible.

Types of Know-How Transfer Agreements 

Disclosure Agreement: Its initial requirement is that a licensee firm needs to know what is the specific, unique, or general "content" of the know-how that a licensor firm has that promises value to the licensee upon entering a contract.

Non-disclosure Agreement(NDA): It is signed by those who receive confidential information about licensed know-how from the licensee in order to carry out their duties. Personnel from engineering firms that build the plant for the licensee, or key licensee employees who have detailed access to disclosed data, etc. to administer their functions in operating the know-how-based plant, are among them.

To Do and Not To Do! 

ToDo#1: Every simple information should be documented and limited by using passwords or firewalls. Know-how consists of technical knowledge, procedures, non-patented manufacturing formulas acquired during years of experience in your business, does not lead to an exclusive right of exploitation. Documentation and limitation of your whole knowledge will form a strong basis for any legal disputes that may occur in the future. It might be good idea to limit access to information to those who “need to know.” In other words, it is almost essential to crate a paper trail documenting proof of concept.

ToDo#2: Well-drafted confidentiality agreements to be made with your employees and outsiders such as suppliers, clients, investors. It can be done orally, in writing or notarized. It is recommended to draw up a contract that includes clauses determining the amount of compensation and the duration of the contract.

ToDo#3: After determining the know-how to be kept as a trade secret, it is critical to have your patents, designs, trademarks and copyrights protections at an early stage provided by intellectual property laws. It is recommended to get help from IP professionals in this regard. If a confidential information that is a trade secret is information related to a patent, the period of keeping it secret in the agreement can be equated with the alive period of the patent. Sometimes, information that constitutes a trade secret, such as a computer source code, a biochemical formula, or a technical schematic, can outweigh the value of an entire production unit for a company.

NoToDo#1: It should not be ignored to train employees in trade secrecy policies and implement practical measures to protect the company’s trade secrets.

NotToDo#2: Your know-how, whether in the commercial or technical field, are necessarily related to the industrial field and should not be out of business activity.




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