License / Know-How / Franchise
Who knows the market for your products and ideas better than you?
In most cases, it is the owners of intellectual property rights who realize a successful exploitation of a patent or find licensees for a trademark. For this reason, we generally recommend that you generally start looking for potential partners yourself. Of course, exploitation agencies can be called in, which can increase the reach of the search. In Thuringia, for example, PATON takes care of the exploitation of university inventions.
Do you know what should be regulated in a license, know-how or franchise agreement?
At this point of exploitation, we advise you and draw up the necessary contracts. This work requires both a good understanding of the property rights to be exploited and specific contractual knowledge. In contrast to other areas of law (e.g. tenancy law, employment law), the law does not provide generally binding provisions which explicitly regulate the legal relations between licensees. The contracting parties must therefore foresee as many constellations as possible and find suitable regulations.
EU Directive on the Protection of Know-how and Trade Secrets
Directive (EU) 2016/943 on the protection of know-how and trade secrets was already published on 8 June 2016. Although the provisions provided for there are not yet in force, they must be transposed into national law by 09.06.2018. Companies that decide against industrial property rights on the basis of the specific nature of a trade secret to be protected and instead opt for secrecy should already now consider the then applicable conditions for granting protection for trade secrets. Otherwise, there is a risk that current omissions, for example in the documentation of the measures taken for permanent confidentiality, could lead from 2018 onwards to a loss of the protection still existing under national law at that time.
If you wish to keep certain information secret and wish to exploit the legal possibilities for protecting these secrets, we will be pleased to advise you on current and future requirements.
Law for the protection of business secrets (GeschGehG)
The draft bill on the law on the protection of business secrets prepares the implementation of the DIRECTIVE (EU) 2016/943 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL (of 8 June 2016) on the protection of confidential know-how and confidential business information (business secrets) against unlawful acquisition, use and disclosure. Some aspects of the new law are briefly presented below.
1. Sections 17 to 19 of the German Unfair Competition Act (UWG), which were previously used for the protection of business secrets, will be deleted and replaced by more detailed provisions of the new law. One of the consequences of this is that in future "information" will only enjoy legal protection as a trade secret if it (Section 1 (1) GeschGehG)
a) is not known or readily accessible, either in its entirety or in detail, to persons in the circles which normally handle this type of information and is therefore of commercial value; and
b) is subject to appropriate confidentiality measures by its rightful holder.
While condition a) - as usual - defines that a trade secret may not be generally known or accessible and is therefore considered valuable, condition b) imposes a new requirement on those who wish to claim protection for such a trade secret. This is because appropriate confidentiality measures must now be actively taken to protect the trade secret. Such measures may include, for example, the consistent use of encryption techniques, the issuance of internal instructions on secrecy protection, and the clear identification of information requiring confidentiality. At the very least, the documentation of appropriate confidentiality measures in a verifiable manner is likely to cause difficulties for some companies at present.
2. The codification also covers permitted actions in the search for classified information. In particular, a trade secret can be lawfully acquired not only by one's own creative actions, but also by examining, dismantling and testing a publicly available product (Section 2 (2) GeschGehG). In principle, the dismantling and analysis of third-party products to find any secret information is therefore expressly permitted (reverse engineering). However, suitable provisions can be used to oblige contractual partners to refrain from such investigations in order to further protect a trade secret, for example in a development phase. The targeted use of specifically adapted non-disclosure agreements will therefore become even more important in the future.
3. Clearly defined claims will be available in future for the enforcement of secrecy protection, which are very similar to those in the field of patents and trademarks. In particular, the owner of the trade secret can demand from the infringer the removal of the impairment, omission, destruction of objects and data containing the trade secret, recall and destruction of products, information and damages (Sections 5 to 7 GeschGehG).
4. It is to be expected that in future the owners of trade secrets will be more willing to enforce their rights in court, because the risk of unintentional disclosure within a lawsuit is significantly reduced by corresponding procedural provisions (Sections 15 to 19 GeschGehG).