Some Key Elements Of A Trade Secret License

A trade secret license can help extract value from a trade secret, a valuable form of intellectual property asset. However, omitting a key ingredient from a trade secret license can result in the ultimate loss of the value of the asset, disagreements between the licensor and licensee and lost opportunities. Some key ingredients are summarized here in three broad categories — license terms, payment terms and general terms.

License Terms

The license terms should describe the trade secret that is the source of the license. Unlike other intellectual property licenses this should be done without disclosing the entire trade secret itself. The nature of the trade secret license is the right for the licensee to receive the trade secret rather than the ongoing use of the asset which is the right granted in other intellectual property licenses.