"Know how" is practical knowledge that is difficult or impossible to reduce in tangible form, such as by writing or verbal communication. Think of a trade secret as a special recipe for bread (which can be written down and stored), but know-how as a method of kneading the bread with skill which can only be shown in person. I cannot describe in writing how many foot-pounds of torque and with what pattern I put into my awesome bread dough, but that is a story for another occasion... And that occasion would be describing to you my "know how". In my experience with some of the largest pharmaceutical manufacturers, the scale-up of small quantities of Active Pharmaceutical Ingrediants ("APIs") is considered know-how, and can be invaluable.
Many businesses lump IP that is not a patent, trademark or copyright into a separate category they deem to be "know how." In fact, one often sees the term "know how" defined defensively in contracts to attempt to capture everything that cannot be nailed down by "traditonal" IP. Such terms look like:
"Know How" shall mean: processes, methods, compositions, formulae, procedures, protocols, software developments and improvements, techniques, results of experimentation and testing, information and data, which are not generally known, (i) embodying or produced through use of XYZ Patent Rights and associated know-how, or (ii) embodying or produced through inventions conceived, discovered or reduced to practice, whether alone or with others, by XYZ employees or with XYZ facilities or equipment, in the course of any program under this agreement, or (iii) otherwise regarding the Field, in which XYZ has an ownership or other interest during the term of this Agreement; all to the extent and only to the extent that XYZ has the right to grant licenses or other rights thereunder.
However, this type of intangible asset can have substantial economic value and can be leveraged using an offensive IP strategy. Know how can include a demonstration of technique and how a product is manufactured, assembled or processed. Know how can also be confidential information not found in patents claiming a certain product or process -- although a valid patent requires that the "best mode" of making and using the product or process claimed in a patent application be included at the time of filing, new or improved modes can be developed later. The ability to train a collaborator in the subtleties of making a product can be a very valuable asset to leverage as part of a comprehensive IP strategy.
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