A know-how license agreement is often concluded to complete a patent license agreement. For example, the use of patented technologies may be based on knowledge and skills that are not patentable per se, but that must be transmitted to enable full use of the technology. A viable solution in such situations may be the use of a know-how license agreement. However, it is possible to sell know-how to pharmaceutical companies based on what has not worked with a particular compound, notes Pérumal. The way this molecule behaves, the kind of clinical trial design that could reveal its promise and the most effective delivery systems are potentially valuable, she says. Small details about a connection — something as mundane as whether it can be left in a test tube while the technician goes on a break — could be important information that a licensee would pay for. Christian, Glynna K. “Understanding Joint Ventures: Licensing Issues.” The Licensing Journal. October 2005.
A know-how license agreement concerns the right to know-how. The protection of know-how is different from other rights granted, as it cannot be patented and does not enjoy legal protection. “You can make the source code available to someone and they basically get a know-how license,” he says. In this case, “they owe us royalties, regardless of the product they make with [the code].” The concept of know-how is very important for software patent licensing, Friedman adds. Software licensees “don`t want abstract inventions – they want things that work. If you give a licensee the know-how-based tools to use the invention, then you`ve given them a “stepping stone” to get to market earlier with that invention, he says. In such cases, it may be interesting to conclude a “patent and know-how license” instead of a simple patent license, in order to allow the licensor access not only to his invention, but also to the relevant technical know-how. This allows the licensee to take full advantage of the invention and understand it.
The main purpose of a know-how license agreement is to define the know-how and its transfer, for example through documentation, training or technical support.. . . .