Analysts need to understand trade secrets and know-how and their contributions to value
Trade secrets are certainly a consideration in every technology license. It has been estimated that the addition of trade secrets to a patent license in technology can increase the value of the license up to three to ten times. Jim Singer at IP Spotlight blogged on last week’s panel discussion in New York City about the value of trade secrets in patent licensing. At that meeting, Bruce Berman, CEO of Brody Berman Associates confirmed that, in his experience, patent licenses that bundle patents with trade secrets or other know-how are, indeed, the most valuable.
BVR’s Licensing Trade Secrets: Overview and Sample Agreements discusses and provides an overview of what constitutes a trade secret and how they affect value. This overview is followed by examples of several different kinds of real agreements (technology, management, joint venture, etc.) that license trade secrets or know-how in one way or another. By reviewing the full text of the agreements, readers learn how companies characterize and monetize their trade secrets. Specific attention should be paid to the language used, the enhancements to the economic value of the license the trade secrets add, the industries where this is a common practice, and the actual royalty rates.
On June 27, Mark Zyla of Acuitas will present a detailed look at valuation of know-how, an intangible that is becoming an ever-increasing part of a firm’s value. Mark will look at the legal protections provided these assets and the valuation techniques best suited for their appraisal.