International Law

Protecting How

By wjg

To my mind there are two types of know-how: (i) our own personal, legitimate accumulation of experience in an area; and (ii) the asset called ?know-how?. The first is subjective, cradled in the notion that the advancement of civilization is hobbled when people are unduly constrained from practicing their trade or calling. The second is objective, being a method, technique or (patentable or non-patentable) process that can be used, shared, licensed, assigned, etc.

It is clear that to the extent know-how is a trade secret, it should be protected from misappropriation. But what is a misappropriation in the context of subjective know-how?

A party disclosing know-how at arms? length would protect it from misappropriation in a confidentiality and non-disclosure agreement (NDA). In a more intimate legal relationship governed by an employment agreement, long-term consulting agreement, etc. where know-how would be expected to be accumulated over time as part of the legitimate accumulation of experience, ?non-competition? protection would be added to temper the ability of the employee or consultant to walk away with the accumulated know-how in his or her head and to begin using it immediately. The non-competition clauses (which would have to be reasonable in scope and duration) would augment the NDA protection, establishing a no-usage period, but once that period had expired, the subjective know-how then could be used because the recipient would be free to compete with the discloser. This would strike a balance between the rights of the individual to use his or her accumulated experience legitimately, with the rights of the discloser to own and control the use of the objective know-how for so long as it remained a trade secret.

A party to an NDA or non-competition agreement that tried, in a heavy-handed or overly-restrictive way, to control trade secrets that had legitimately become subjective know-how, thereby would run the risk of having the agreement found unenforceable. By the same token, just because a recipient can remember the trade secret, does not mean it has become a legitimate accumulation of know-how.

Full post as published by GenereuxLaw on November 22, 2006 (boomark / email).