Trade Secret License Agreement Generator

What is a Trade Secret License Agreement?

A Trade Secret License Agreement is a contract between a trade secret owner (licensor) and a party seeking to use that confidential information (licensee) that outlines the terms and conditions for accessing, using, and protecting valuable proprietary information that derives independent economic value from not being generally known. This agreement establishes permitted uses, confidentiality obligations, security protocols, compensation structure, and enforcement mechanisms for trade secrets such as formulas, processes, techniques, or customer information.

Key Sections Typically Included:

• Trade Secret Definition and Description
• Scope of License Grant
• Permitted Uses and Field Restrictions
• Confidentiality Obligations
• Security and Protection Measures
• Employee and Contractor Controls
• Term and Post-Termination Obligations
• Payment Structure and Royalties
• Improvements and Ownership
• Audit and Inspection Rights
• Representations and Warranties
• Enforcement Against Third Parties
• Breach and Remedies
• Indemnification Provisions
• Dispute Resolution Procedures
• Exit Provisions and Return of Information
• Survival Clauses

Why Use Our Generator?

Our Trade Secret License Agreement generator helps trade secret owners and licensees create a comprehensive document that enables controlled sharing of valuable confidential information while maintaining its protected status. By defining security protocols, usage limitations, and confidentiality obligations upfront, both parties can benefit from the trade secret while preserving its value and legal protection.

Frequently Asked Questions

• Q: How should the trade secrets be defined and described?

  • A: The agreement should clearly identify the trade secrets being licensed with sufficient specificity while avoiding public disclosure of the actual secrets, use categorical descriptions with reference to separately maintained confidential exhibits or schedules, and establish methods for designating additional information as protected during the term. It should differentiate between trade secrets and other confidential information that may have different protection levels, specify whether the license includes access to tangible embodiments of the trade secrets (prototypes, formulas, documents), and establish mechanisms for confirming what information is included in the license. The agreement should also address knowledge transfer methods including training sessions, documentation, and on-site assistance, specify which employees or representatives can access the trade secrets, and outline procedures for handling disputes about whether particular information qualifies as a trade secret.

• Q: What security and protection measures should be required?

  • A: The agreement should establish specific physical, electronic, and procedural safeguards the licensee must implement, require employee confidentiality agreements and trade secret training, and specify access limitations based on need-to-know principles. It should outline requirements for secure storage, transmission, and disposal of trade secret information, establish protocols for labeling and identifying trade secret materials, and specify restrictions on copying or reproduction. The agreement should also require prompt notification of any security breaches or unauthorized disclosures, outline requirements for IT security including encryption and access controls, and establish the licensor's right to audit and inspect security measures. It should address procedures for controlling access when personnel changes occur, require background checks for employees with access to sensitive information, and outline obligations to implement security updates and improvements over time.

• Q: How should enforcement and remedies be structured?

  • A: The agreement should clearly establish monitoring and audit rights to verify compliance with usage restrictions, outline specific remedies for unauthorized disclosure including injunctive relief and liquidated damages, and establish notification requirements for threatened or actual misappropriation. It should address cooperation obligations when pursuing action against third parties who misappropriate the information, specify the allocation of enforcement costs and recovery proceeds, and establish jurisdictional considerations for enforcement actions. The agreement should also include acknowledgments that monetary damages may be insufficient for breaches, outline obligations to mitigate damage from unauthorized disclosures, and establish procedures for responding to legal demands for disclosure (subpoenas, court orders). It should address insurance requirements for potential liability, outline indemnification provisions for third-party claims, and establish post-termination obligations for continued protection.