The Trade Secret License Agreement is a specialized legal instrument used when a business needs to share valuable proprietary information while maintaining its trade secret protection under US law. This document is essential when companies want to commercialize their trade secrets through licensing rather than selling them outright, or when strategic partnerships require the sharing of confidential processes, formulas, or methodologies. The agreement must comply with both federal requirements under the Defend Trade Secrets Act and state-specific trade secret laws. It includes comprehensive provisions for protecting the licensed information, defining permitted uses, establishing security protocols, and setting compensation terms. This type of agreement is particularly crucial in industries where proprietary processes, formulas, or methodologies provide competitive advantages.
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1. Parties: Identification of the licensor and licensee, including full legal names, addresses, and company registration details
2. Background: Context of the agreement, brief description of the trade secrets, and the parties' intentions
3. Definitions: Detailed definitions of key terms including 'Trade Secrets', 'Confidential Information', 'Licensed Rights', 'Territory', and other relevant terms
4. Grant of License: Scope of the license granted, including permitted uses, territory restrictions, and any field-of-use limitations
5. License Fee and Payment Terms: Financial terms including license fees, royalties, payment schedule, and reporting requirements
6. Protection of Trade Secrets: Specific measures required to maintain confidentiality and protect the trade secrets
7. Confidentiality Obligations: Detailed confidentiality provisions, including handling of information, permitted disclosures, and security measures
8. Term and Termination: Duration of the agreement, renewal terms, and circumstances for termination
9. Post-Termination Obligations: Obligations that survive termination, including ongoing confidentiality duties and return of materials
10. Warranties and Representations: Warranties regarding ownership, right to license, and non-infringement of third-party rights
11. Indemnification: Mutual indemnification obligations for breach of agreement or third-party claims
12. Governing Law and Jurisdiction: Choice of law and jurisdiction for dispute resolution
13. General Provisions: Standard boilerplate clauses including notices, assignment, and entire agreement
1. Sublicensing Rights: Include when licensee may need to grant sublicenses to affiliates or third parties
2. Improvements: Include when parties anticipate developments or improvements to the trade secrets
3. Quality Control: Include when licensed trade secrets relate to product manufacturing or service delivery standards
4. Export Control: Include when trade secrets may be subject to export control regulations
5. Joint Development: Include when parties will collaborate to develop new intellectual property
6. Insurance: Include when specific insurance coverage is required for high-risk trade secrets
7. Change of Control: Include when agreement should address ownership changes of either party
8. Alternative Dispute Resolution: Include when parties prefer mediation or arbitration over litigation
1. Schedule A - Licensed Trade Secrets: Detailed description of the trade secrets being licensed, including technical specifications and documentation
2. Schedule B - Security Protocols: Specific security measures and protocols required for protecting the trade secrets
3. Schedule C - Authorized Personnel: List of individuals authorized to access the trade secrets and their level of access
4. Schedule D - Fee Schedule: Detailed breakdown of license fees, royalty calculations, and payment terms
5. Schedule E - Technical Requirements: Technical specifications and requirements for implementing the trade secrets
6. Schedule F - Reporting Templates: Templates for required periodic reports on usage and royalty calculations
7. Appendix 1 - Non-Disclosure Agreement: Form of NDA to be signed by employees or contractors accessing the trade secrets
8. Appendix 2 - Security Incident Response Plan: Procedures for responding to potential security breaches or unauthorized disclosures
Authors
Relevant legal definitions
Clauses
Relevant Industries
Technology
Manufacturing
Pharmaceuticals
Biotechnology
Chemical Industry
Software Development
Food and Beverage
Automotive
Aerospace
Industrial Processing
Research and Development
Consumer Products
Electronics
Telecommunications
Relevant Teams
Legal
Intellectual Property
Research and Development
Information Security
Business Development
Executive Leadership
Operations
Compliance
Technology Transfer
Innovation
Relevant Roles
Chief Legal Officer
Intellectual Property Counsel
General Counsel
Chief Technology Officer
Research and Development Director
Chief Executive Officer
Business Development Manager
Licensing Manager
Innovation Director
Chief Information Security Officer
Technology Transfer Officer
Commercial Director
Operations Manager
Chief Operating Officer
Compliance Officer
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