One of the better definitions and distinctions between trade secrets and know-how when it comes to intellectual property strategies comes from Vertex. The terms “know-how” and “trade secrets” are often used interchangeably. However in the context of a business, the meaning of these terms can be quite different. It is critical their precise meaning is clear so misunderstandings can be avoided. Know-how describes an employee’s general knowledge and skill set as they relate to the specific field or industry of the employee. Know-how is the knowledge that the employee possesses and that is available in the public domain and therefore is available to be used by others possessing similar training and experience. For the Corporation know-how is often referred to as proprietary or confidential information. It comprises knowledge of the processes used to create, manage, and extract value from the elements described in all columns of the “Summary of IP Elements” figure.
Trade secrets are a work product that an employee creates for his employer through the application of the employee’s or corporation’s know-how. These typically include work products related to patentable inventions, discoveries, documents and drawings, manufacturing processes, computer programs and source code, databases, research results, operating in testing procedures, and product formulations. Bear in mind that in order to be a trade secret the work product and methods employed in its creation need to be adequately documented to meet the legal standard of a trade secret in the jurisdiction in which they were created. Appropriate care must be taken to identify and safeguard any trade secrets used. When employed, employees typically have given up many of their ownership rights in their work product unless there is an employment agreement to the contrary. For independent contractors, suppliers, and partners, it is important to note that the business ownership of intellectual assets must be specified in the contractual agreements.