Licensing Trade Secrets: Overview and Sample Agreements

March 2011 978-1-935081-55-5 Hardcover (217 pages)

BVR (editor)

Business Valuation Resources, LLC

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. 

This book 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 in one way or another. By reviewing the actual agreements, readers will 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.

Table of Contents:

  • Introduction
    • What is a Trade Secret?
    • Definition
    • Misappropriation
    • Keeping Trade Secrets Secret
    • Value
    • Licensing
  • Trade Secret Analysis
    • Trade Secret Value Sources
    • Trade Secret Floor Value
    • Factors that Prolong Trade Secret Value
    • Factors that Kill Trade Secrets
    • Inadvertent Disclosures
    • Trade Secret Agreement Terms
    • Publication as Patent or Copyright
  • Example Agreements    
    • CombinatoRx, Inc. (Joint Development, Manufacturing/Processing Intangible)
    • MacGregor Corporation (Manufacturing/Process Intangible, Marketing Intangible)
    • Advanced Cell Technology, Inc. (Manufacturing/Process Intangible)
    • Shells Seafood Restaurants, Inc. (Manufacturing/Process Intangible, Marketing Intangible, Service)
    • Elcom Technologies Corporation
    • Atagencer LLC (Joint Development, Manufacturing/Process Intangible, Marketing Intangible)
    • Cardima, Inc.
    • Commonwealth Biotechnologies, Inc. (Asset Purchase, Manufacturing/Process Intangible, Marketing Intangible)