Trade secrets are a type of intellectual property that can provide a competitive advantage to a business. Unlike patents and copyrights, trade secrets are not registered with the government and are instead kept secret by the owner of the information. But can trade secrets be sold or licensed?
The answer is yes, but there are some important caveats to keep in mind. First, licensing a trade secret is very difficult since by its nature a trade secret must be kept secret. When licensing a trade secret, it is important to make sure that the information will be maintained secret. Once the information is out, it is no longer a secret and is unprotectable that it may be subject to theft or copying by others.
Second, it is important to have a written agreement in place between the parties involved in the sale or license of the trade secret. This agreement should clearly define what information is being sold or licensed, how it will be used, and what restrictions are in place to protect the secrecy of the information. Without a clear written agreement, there may be disputes later on about what was actually sold or licensed, which could lead to the disclosure of the information. The agreement should state the licensee’s liabilities for failing to protect and maintain the information as a secret.
Finally, when selling or licensing a trade secret, it is important to make sure that the licensee has the right to review, monitor and test the recipient’s ability and procedures to ability to keep the information secret. For example, if you sell or license a trade secret to a company that has poor security practices, there is a risk that the information could be leaked. Therefore, it is important to only sell or license trade secrets to parties that you trust will keep the information confidential.
In conclusion, trade secrets can be sold or licensed provided that they meet certain criteria. If you’re considering selling or licensing your company’s trade secrets, make sure you do your homework first and consult with an experienced attorney who can help you navigate the process and protect your interests.
If you need assistance, our intellectual property attorneys can help you evaluate your options to help you decide how to best handle the sale or licensing of your trade secrets. To schedule an appointment, contact us at (888) 666-0062 or click here to schedule an appointment online.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.