Research Handbooks in Intellectual Property series
Edited by Jacques de Werra
Chapter 7: The licensing of trade secrets and know-how
There is a great deal of case law and professional and academic literature about the subject of trade secrets.1 There is considerably less information about the subject of trade secret licensing.2 The reason for the latter is not that owners of trade secrets do not licence those trade secrets to third parties. They clearly do. It is simply that the subject matter of the licence – the trade secret in question – is substantially less capable of adequate definition and, for that matter, protection than its counterparts elsewhere in the sphere of intellectual property rights. If, as a licensee of your trade secrets I choose, deliberately, to publish the secret to the world at large, I have effectively undermined, if not totally destroyed, the subject matter of the bargain I freely entered into with you as my licensor. True, the scale of damages I might be obliged to pay to compensate you for the loss you have suffered might be considerable, but that does little to assist you as my licensor, because the value of the subject matter has gone. As information in the public domain and hence freely available to all to use, you cannot licence it to anyone else. It has disappeared as an economic and commercial earning force. Contrast this with the position had I, as licensee, deliberately breached a patent licence or copyright licence with you. I may have chosen to do this because, having had the experience of using and working with the technology,
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