Under article 39(2) TRIPs, natural persons and legal entities should have the right to prevent information that is lawfully in their possession being made public to, or acquired or used by others without their permission in such a manner as is in conflict with fair commercial practices, providing this information meets four conditions:

Secret nature. The information has to be secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

Under article 10(2) of the Technology Transfer Regulation, the secret character of the information means that the know-how package as a body or in the precise configuration and assembly of its components is not generally known or easily accessible, so that part of its value consists in the lead which the licensee gains when it is communicated to him. The term ‘secret’ must not be understood in the narrow sense, which means that each individual component of the know-how should be totally unknown or unobtainable outside the licensor’s business.

The secret nature of the know-how is crucial to distinguish from patented inventions, since under this latter category, an invention is always made public upon publication of the patent, as a result of which anyone (including competitors) gains access to the technology.

One of the best known examples is the process for making Coca-Cola. Although the ingredients of this soft drink have been worked out a number of times, it still seems to be impossible for the uninitiated to achieve the same result.

Commercial value. The secret nature of the information must have a certain commercial value.

Under article 10(3) of the Technology Transfer Regulation, the know-how has to be ‘substantial’, meaning that the know-how includes information which must be useful. This means that it can reasonably be expected at the date of conclusion of the license agreement to be capable of improving the competitive position of the licensee, for example by helping him to enter new markets or giving him an advantage in competition with other manufacturers or providers of services who do not have access to the licensed secret know-how or other comparable know-how.

Confidentiality obligation. In information must, given the circumstances, be subject to reasonable measures by the person lawfully in possession of the information for keeping it secret.

Identified. Under article 10(4) of the Technology Transfer Regulation, the technical information furthermore preferably has to be described or recorded in such a manner as to make it possible to verify that the know-how satisfies the criteria of secrecy and substantiality and to ensure that the licensee is not unduly restricted in his exploitation of his own technology. The description of the know-how can either be set out in the license agreement or in a separate document or recorded in any other appropriate form.