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Four steps to take when acquiring know-how rights

Much has been said about how companies protect intellectual property. On the Internet you can find many recommendations on this topic. However, there is another side – those who acquire the rights to use someone else’s intellectual property. How do they protect their interests? Specialist of the consulting company UKEY Nadezhda Pronina gives four recommendations
Today, when information technologies are developing rapidly and play a key role in the competition, interest in production secrets (know-how), as a protected result of intellectual activity (RID), is noticeably growing.

RIA can be relatively easily assigned, so the creators of intellectual property pay much attention to protecting their rights. The focus is often on issues specifically related to the rights of owners of a production secret. But there is another side – persons acquiring rights to know-how.

Let’s see how the Russian legislation defines the “know-how”: paragraph 1 of Article 1465 of the Civil Code of the Russian Federation:

“The secret of production (know-how) – information of any nature (production, technical, economic, organizational and others) about the results of intellectual activity in the scientific and technical field and about the ways to carry out professional activities that have actual or potential commercial value due to unknownness to third parties if third parties do not have free legal access to such information and the owner of such information takes reasonable measures to maintain their confidentiality te, including by introducing a trade secret regime. ”

Who is who?

Rightholder – a person who holds the exclusive right to a production secret. An exclusive right is by its nature an absolute right comparable to the right of ownership.

The copyright holder may provide the third party (licensee) with the right to use the production secret under the license agreement within the limits established by him. This possibility is expressly enshrined in article 1469 of the Civil Code of the Russian Federation.

Suppose your company received a proposal from a developer of a technology for the production of a product about its implementation in production. The developer is not ready to alienate his exclusive right to technology and offers to conclude a license agreement. According to the document, your company will receive the right to use this technology. The technology is not patented and the developer assures that it is protected by the secrets of production.

At first glance, there are no problems. You can conclude a license agreement and introduce the technology into production. However, is everything so simple in practice?

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One can get an idea of ​​the patented RID (inventions, utility models, industrial designs) based on the information posted in open registries. With know-how, unlike them, things are not so simple. The licensee can only evaluate the secrets of production, the rights to which are not subject to registration, to the extent that the copyright holder allows him to do so.

It turns out that the task of the copyright holder is to maintain the confidentiality of information constituting the content of the production secret. Indeed, article 1467 of the Civil Code explicitly states that its exclusive right to know-how is valid as long as such confidentiality is maintained.

Rightholders are interested in providing licensees with only the necessary minimum. As a rule, this list intentionally includes publicly available information along with information that really reveals the content of know-how. This is done in order to minimize the risk of unfair use of production secrets by the licensee, its contractors and to prevent violation of their confidentiality. In fact, the licensee should consider as the secret of production the entire totality of information received from the copyright holder on the terms of a license agreement.

As for licensees, they are interested in not disguising the right to use “dummy”, that is, information that is generally accessible or protected by patents of third parties, under the guise of a production secret.

What to do?

First, it’s important to make sure that the information that makes up the know-how is:
Not applicable to third party RID protected by patents;
They are not information whose mandatory disclosure or inadmissibility of restrictions on access to which is established by law or other legal act (part 2 of article 1465 of the Civil Code of the Russian Federation);
Not publicly available.
The second recommendation. It is necessary to secure the guarantees of the copyright holder that the rights to the production secret will not be disclosed to your direct competitors. Otherwise, the acquired right to use know-how will be depreciated.

Another important detail. By concluding an agreement as a licensee, you accept the obligation to maintain the confidentiality of the production secret until the termination of the exclusive right to this know-how (part 3 of article 1469 of the Civil Code of the Russian Federation).

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