How to Make a Buck or Two
from Licensing Your Trade Secrets
by Jonathan D. Hurt, PhD and
Steve McDaniel, PhD, JD
Technology Litigators
rather than, say, a specific formula.
Think of a PowerPoint presentation
with no text and you doing a lot of
talking. However, this can create the
problem of an “I told the
licensee the trade secret”
versus “no you did not” argument if things go south.
A confidential written
summary of the visual/oral
disclosure should be made
within an agreed upon time
period to avoid this issue.
Alternatively, though less
theatrical, only written disclosures may be defined in
the licensing agreement as
being the trade secret.
The nuts and bolts of
the license should clearly
delineate that ownership
title to any physical materials, such as prototypes,
documents, equipment, etc.
that are used to communicate the trade secret are
the property of the licensor. Further, prohibitions
on uses of the disclosed
material may be included
with the descriptions of the
grants of the license.
A clause of explicit ac-
knowledgement by the
licensee that the licensed
material is a trade secret
should be included. As part
of the license, other non-
trade secret information,
such as publically avail-
able know how, confiden-
tial information, etc. may be included.
Clauses can be added to receive pay-
ment for this information (e.g., training
on use of equipment) and/or to retain
confidentiality of the supplemental ma-
terials. Additional clauses should cover
indemnities, warranties and license ter-
mination conditions. In other words, the
standard legal stuff.
tion will be used by them just by being
part of their nontangible knowledge
base. A licensee may seek an exclusion
clause regarding paying royalties for
work produced from use of this nontangible information called “residuals.”
In short, it is difficult to restrict people
from using the base education you have
24 | Coatings World
www.coatingsworld.com
February 2013
