Know-how: Overview, definition and example
What is know-how?
Know-how refers to practical knowledge, skills, or expertise that someone or a business possesses, often gained through experience. It includes methods, techniques, or processes that might not be formally documented but are crucial for achieving specific results. Unlike patents or trademarks, know-how isn’t usually protected as intellectual property but is often treated as confidential.
Why is know-how important?
Know-how is valuable because it gives businesses a competitive edge. It represents the unique skills or methods that allow a company to operate efficiently, innovate, or deliver high-quality products and services. In many cases, it’s the intangible factor that sets one business apart from its competitors.
For example, a manufacturing company’s ability to optimize production processes or a tech firm’s custom software development approach might rely heavily on know-how. Protecting and sharing it strategically can make or break partnerships, investments, or growth opportunities.
Understanding know-how through an example
Imagine a food company that has developed a unique method for preserving the freshness of its products. While the method isn’t patented, it’s considered know-how because it’s a proven, proprietary process that gives the company a competitive advantage. If the company partners with a distributor, they may need to disclose this know-how under strict confidentiality to ensure the distributor can handle the products properly.
In another scenario, a tech startup might share its know-how with a contractor to develop a custom app. The startup could include a confidentiality agreement in the contract to ensure the know-how is not shared or used elsewhere.
An example of a know-how clause
“The Recipient agrees to maintain the confidentiality of all know-how disclosed under this Agreement and to use such know-how solely for the purpose outlined herein. The Recipient shall not disclose or use the know-how for any other purpose without prior written consent.”
Conclusion
Know-how is an essential asset for businesses, encompassing the expertise and skills that drive innovation and competitive advantage. While not always protected by intellectual property laws, know-how can be safeguarded through confidentiality agreements and careful sharing practices. Recognizing its value helps businesses maintain their edge in the market and manage collaborations effectively.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.