Trade Secret License Agreement

19 Advanta USA Inc. v Pioneer Hi-Bred Internat`l Inc., 04-C-238-S, Slip op. (W.D. Wisc. October 27, 2004) stipulates that the Patent Act for Plant Varieties anticipates trade secrets. Question 5. The ability to design an invention is a function of the type of patent protection. If a claim is easily avoided, its value is greatly reduced. The destructive effect of the protection of trade secrecy through publication therefore remains unchanged and the relative value of the trade secret option is higher (due to the reduced value of patent protection). Although trade secrets have not traditionally been known as other intellectual property rights such as patents, trademarks and copyrights in the public mind, they are nonetheless important to many companies.

Today, trade secrets cover about 90% of new technologies and are included in more than 80% of technology licensing agreements. Trade secrets are the jewels of the corporate crown. Indeed, trade secrets are even more relevant today than they were a few decades ago as an instrument for protecting innovation, and the commitment to their protection is increasingly important. The injunctions now pose a greater threat in cases of misappropriation of trade secrets than they did a decade ago, and hundreds of millions of dollars in damages have been awarded in recent years. In a recent lawsuit in Orlando, Florida, two businessmen claimed $1.4 billion in damages from the Walt Disney Company, accusing them of stealing trade secrets for use in a Walt Disney World sports complex. The jury awarded $240 million to the businessmen.12 In another recent case, it was determined that Cargill, Inc. embezzled business secrets from the Pioneer Hi-Bred International, Inc. era and had to pay $300 million. In another case, Lexar received $465.4 million in damages from Toshiba for hijacking controller technology that allowed a memory chip to communicate with its host aircraft13. In some cases, the value of the licence is the initial disclosure of trade secrecy by licensees to the licensee and not the ongoing right to create or use trade secrecy or to sell products containing trade secrecy (after all, it is not a patent license). The taker derives the value of learning trade secrecy to integrate it into the licensee`s production processes or methods – there can be no other intrinsic value. In other cases, when the license is hybrid or when improvements to trade secrecy are shared with the taker over time, an additional value can be created.

In the commercial practice of licensing, the threshold concerns we encounter are the so-called black box dilemma. Two pieces of Anglo-Saxon wisdom clearly describe it. The owner of the business secret „cannot let the cat out of the bag,“ and the potential licensee „doesn`t want to buy pork in the bag.“ In other words, an unrestricted disclosure of a new invention or proprietary know-how would lead to the certain loss of trade secrets. On the other hand, it is unlikely that the potential receiver will get anything new. Fortunately, there is a perfect way out of this dilemma. This is a confidentiality agreement called a confidentiality agreement, confidential disclosure agreement or pre-negotiation agreement. When negotiating and developing such an agreement, the parties have different concerns to address. If there is a set of trade secrets in the license, the agreement can set out corrective steps to take to protect the remaining trade secrets or future trade secrets (such as improvements) that are shared.