Knowhow - Disclosure Agreements

Disclosure Agreements

There are two sets of agreements associated with the transfer of know-how agreement:(a) the disclosure and (b) the non-disclosure agreements which are not separately parts of the principal know-how agreement.

The initial need for 'disclosure' arises from the fact that a licensee firm may wish to know what is the specific, unique or general 'content' of the know-how that a licensor firm possesses which promises value to the licensee on entering into contract. Disclosure also aids the potential licensee in selecting among competitive offers, if any. Such disclosures are made by licensors only under non-disclosure or confidentiality agreements in which there are express undertakings that should the ultimate license not materialize, the firm to whom the disclosure is made will not reveal - and equally important - by any manner apply, any part of the disclosed knowledge which is not in the public domain or previously known to the firm receiving the information.

Non-disclosure agreements are undertaken by those who receive confidential information from the licensee, relating to licensed know-how, so as to perform their tasks. Among them are the personnel of engineering firms who construct the plant for the licensee or those who are key employees of the licensee who have detailed access to disclosed data etcetera to administer their functions in operating the know-how-based plant. These are also in the nature of confidentiality agreements and carry the definition of know-how, in full or truncated part, on the need-to-know basis.