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What are the standard clauses for a trade secret license agreement?
A trade secret license agreement is a legal contract that grants a licensee the right to use a trade secret owned by the licensor. The agreement outlines the terms and conditions of the license, including the scope of the license, the duration of the license, the royalty payments, and the confidentiality obligations of the licensee.
Table of Contents
Introduction
Standard Clauses in a Trade Secret License Agreement 2.1. Definition of Trade Secret 2.2. Scope of License 2.3. Term of License 2.4. Royalty Payments 2.5. Confidentiality Obligations 2.6. Non-Disclosure Agreement 2.7. Termination 2.8. Dispute Resolution 2.9. Governing Law and Jurisdiction
Case Laws
Conclusion
TLDR
Sample Trade Secret License Agreement
Introduction
Trade secrets are a valuable asset for businesses, and it is important to protect them from unauthorized disclosure. A trade secret license agreement is a key tool for protecting trade secrets, as it allows businesses to share their trade secrets with others while still maintaining control over their use.
Standard Clauses in a Trade Secret License Agreement
A trade secret license agreement should include the following standard clauses:
2.1. Definition of Trade Secret
The agreement should clearly define the trade secret that is being licensed. This definition should be specific and comprehensive, and it should include all of the elements that make the information a trade secret.
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2.2. Scope of License
The agreement should specify the scope of the license, which means the ways in which the licensee is permitted to use the trade secret. For example, the license may grant the licensee the right to manufacture, sell, or use the trade secret.
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2.3. Term of License
The agreement should specify the term of the license, which is the duration of the license. The term may be for a fixed period of time, or it may be perpetual.
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2.4. Royalty Payments
The agreement should specify the royalty payments that the licensee will make to the licensor. The royalty payments may be a fixed amount, or they may be based on a percentage of the licensee's sales.
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2.5. Confidentiality Obligations
The agreement should include confidentiality obligations that require the licensee to keep the trade secret confidential. These obligations should be comprehensive and they should cover all aspects of the trade secret, including its disclosure to third parties.
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2.6. Non-Disclosure Agreement
The agreement should include a non-disclosure agreement (NDA) that requires the licensee to keep all confidential information received from the licensor confidential. The NDA should be separate from the trade secret license agreement, but it should be incorporated by reference into the agreement.
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2.7. Termination
The agreement should specify the grounds for termination of the license. These grounds may include breach of the agreement by the licensee, bankruptcy of the licensee, or the licensor's decision to terminate the license for any reason.
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2.8. Dispute Resolution
The agreement should specify the method for resolving disputes that may arise between the licensor and the licensee. This method may include arbitration, mediation, or litigation.
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2.9. Governing Law and Jurisdiction
The agreement should specify the governing law and jurisdiction for the agreement. This means the law that will be used to interpret the agreement and the court that will have jurisdiction to hear any disputes.
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Case Laws
2.9.1. **Case Law: ** Standard Group Limited v. Rev. Peter Njuguna
Parties: Standard Group Limited (Defendant) and Rev. Peter Njuguna (Plaintiff)
Outcome: The court found that the Standard Group Limited had published a defamatory article about Rev. Peter Njuguna, and it awarded damages to the plaintiff.
Relevance: This case is relevant to trade secret license agreements because it demonstrates the importance of protecting confidential information from unauthorized disclosure. In this case, the Standard Group Limited was found liable for disclosing confidential information about Rev. Peter Njuguna, which damaged his reputation.
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Conclusion
A trade secret license agreement is a complex legal document that should be carefully drafted to protect the interests of both the licensor and the licensee. The agreement should include all of the standard clauses discussed above, and it should be reviewed by an experienced attorney to ensure that it is legally sound.
TLDR
A trade secret license agreement is a legal contract that grants a licensee the right to use a trade secret owned by the licensor. The agreement should include standard clauses such as the definition of the trade secret, the scope of the license, the term of the license, royalty payments, confidentiality obligations, a non-disclosure agreement, termination provisions, dispute resolution mechanisms, and governing law and jurisdiction.
Sample Trade Secret License Agreement
TRADE SECRET LICENSE AGREEMENT
This Trade Secret License Agreement (the "Agreement") is made and entered into as of [Date], by and between [Licensor Name], a [State] [Entity Type] with its principal place of business at [Licensor Address] (the "Licensor"), and [Licensee Name], a [State] [Entity Type] with its principal place of business at [Licensee Address] (the "Licensee").
WITNESSETH:
WHEREAS, Licensor is the owner of certain valuable trade secrets (the "Trade Secrets") relating to [Trade Secret Description]; and
WHEREAS, Licensee desires to obtain a license from Licensor to use the Trade Secrets for the purpose of [Licensee Purpose]; and
WHEREAS, Licensor is willing to grant Licensee a license to use the Trade Secrets upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
1. Grant of License
Licensor hereby grants to Licensee a non-exclusive, non-transferable license (the "License") to use the Trade Secrets for the purpose of [Licensee Purpose].
2. Definition of Trade Secrets
The Trade Secrets are defined as follows:
[Trade Secret Definition]
3. Scope of License
The License grants Licensee the right to:
[Scope of License]
4. Term of License
The License shall commence on the Effective Date and shall continue for a period of [Term of License] (the "Term").
5. Royalty Payments
Licensee shall pay to Licensor a royalty of [Royalty Amount] for each [Royalty Basis] of the Trade Secrets used by Licensee.
6. Confidentiality Obligations
Licensee agrees to hold the Trade Secrets in strict confidence and not to disclose them to any third party without the prior written consent of Licensor.
7. Non-Disclosure Agreement
Licensee agrees to execute a Non-Disclosure Agreement (the "NDA") with Licensor, which shall be incorporated by reference into this Agreement.
8. Termination
This Agreement may be terminated by either party upon [Termination Notice Period] written notice to the other party.
9. Dispute Resolution
Any dispute arising out of or relating to this Agreement shall be settled by binding arbitration in accordance with the rules of the [Arbitration Organization].
10. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of [Country].
11. Entire Agreement
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
12. Severability
If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.
13. Notices
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to Licensor:
[Licensor Address]
If to Licensee:
[Licensee Address]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
[Licensor Signature]
[Licensor Name]
[Licensee Signature]
[Licensee Name]
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