What is know-how and what value can it have for the company?
The term „know-how” has for a long time simply symbolized confidential information with economic value. Today, however, this concept has taken on a new meaning.
Know-how is an intangible property that the administrator (in this context, the company) can dispose of and transfer to another person on the basis of a contract. Know-how in English means: to know how. In the case of know-how in business, it is a set of specialized knowledge, skills and capabilities that will allow you to perform professional duties efficiently and effectively.
In order for knowledge to be defined by the concept of know-how, it must have the following characteristics:
- relevance to the production process or the performance of the service;
- secrecy – the transferred know-how is not widely known, it cannot be obtained using easily accessible sources;
- identification – know-how must be accurately described.
Know-how may relate to technical knowledge, commercial skills, financial management or the way of organization. What can be considered know-how? Examples are listed below.
Know-how – examples: customer base ; unpatented invention or technology; unregistered utility models; developed strategies and predictions; procedures related to business management; recipe for making a given product; sales conversation script; how to sell a given product or services; data archiving system; confidential knowledge about the company’s product; results of SEO analysis; results of scientific research.
The legal basis for the know-how contract is the general provisions of the Civil Code. Its purpose is to describe how to trade specialist knowledge of a confidential nature. A know-how contract is a commercial contract, but not related to the sale – the subject of trade are intangible goods, and the buyer does not acquire rights to them, he can only use them.
Know-how agreements are common in franchising. The franchisor provides the entrepreneur with know-how, thanks to which he does not have to independently come to the information that is necessary to run the rented point. It is the franchisee’s duty to maintain secrecy and not to use the franchisor’s know-how in other activities.
The know-how agreement is signed by two parties – the licensor, who has the know-how, and the licensee, i.e. the buyer of company secrets. The document defines the scope and method of providing information. The contract must also contain a deadline and the described conditions of termination.
Know-how cannot be patented, however, the entrepreneur can protect confidential knowledge about the company in other ways. In know-how contracts, it is very important to specify the obligations of the party who acquires the know-how. What does this mean? Confidential information may be subject to a non-competition clause or confidentiality clause for the entire period after the expiry of the contract. This will prevent unwanted information leaks.
How to protect know-how? A non-disclosure agreement should be concluded between all persons who have access to specialist knowledge – employees, contractors and representatives interested in purchasing or franchising. The number of people with know-how should be kept to a minimum, this should not be discussed with people who are not involved in negotiations.
If the scope of protected information is so wide that it cannot be described in the know-how contract, it is worth informing employees, associates, contractors and other persons that the information is confidential and should be kept confidential.
Know-how should not be transmitted through channels such as e-mail or telephone, unless encrypted and secure connections are used. It is also worth protecting documents describing the know-how of a given company. If they fall into the wrong hands, it can end up with gigantic losses for the company. It is a good practice to periodically refresh access passwords in company computers and e-mail programs, as well as to introduce the habit of destroying unnecessary documents in the company. The company should take care not only of the secure storage of valuable know-how documents, but also control who visits the company and to what rooms guests have access.
Disclosure of a company’s know-how without its consent is treated by Polish law as an act of unfair competition. Anyone who discloses to another person or uses information constituting a trade secret in their own business is subject to a fine, restriction of liberty and even imprisonment of up to 2 years. In addition, the court may also order compensation for damage and introduce the holding of a specific position or the exercise of a specific profession / business activity.
Projekt otrzymał dofinansowanie z Norwegii poprzez Fundusze Norweskie 2014-2021, w ramach programu „Dialog społeczny – godna praca”.