Trade Secret License Agreement for Canada

Trade Secret License Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that enables the controlled sharing of confidential trade secrets between parties while maintaining their protected status. This agreement establishes the terms and conditions under which the trade secret owner (licensor) permits another party (licensee) to use specific confidential information, processes, or technical knowledge, while implementing strict confidentiality and security measures to prevent unauthorized disclosure. The document incorporates relevant Canadian legal requirements and common law principles for trade secret protection, as Canada does not have a specific federal trade secrets statute.

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What is a Trade Secret License Agreement?

The Trade Secret License Agreement is essential for businesses operating in Canada who wish to monetize their confidential information and trade secrets while maintaining control over their use and disclosure. This document becomes necessary when a trade secret owner wants to permit another party to use their valuable confidential information while ensuring its continued protection under Canadian law. The agreement covers critical aspects such as the scope of permitted use, security measures, confidentiality obligations, and compensation terms. It's particularly relevant in today's knowledge-based economy where proprietary processes, formulas, algorithms, and technical know-how are valuable business assets. The agreement must comply with Canadian common law principles regarding trade secrets, as well as relevant federal and provincial legislation affecting confidential information and business relationships.

What sections should be included in a Trade Secret License Agreement?

1. Parties: Identification of the licensor and licensee, including full legal names and addresses

2. Background: Context of the agreement, brief description of the trade secret(s), and the parties' intentions

3. Definitions: Definitions of key terms including 'Trade Secrets', 'Confidential Information', 'Licensed Use', 'Territory', etc.

4. Grant of License: Scope of the license granted, including permitted uses, territory, and any field-of-use restrictions

5. License Fees and Payment Terms: Financial terms including licensing fees, royalties, payment schedule, and reporting requirements

6. Confidentiality Obligations: Detailed obligations regarding protection and non-disclosure of the trade secrets

7. Protection Measures: Specific security measures and protocols required to protect the trade secrets

8. Term and Termination: Duration of the agreement, renewal terms, and grounds for termination

9. Post-Termination Obligations: Obligations that survive termination, including ongoing confidentiality and return of materials

10. Warranties and Representations: Warranties regarding ownership, right to license, and non-infringement

11. Indemnification: Indemnification obligations of both parties

12. General Provisions: Standard boilerplate provisions including governing law, dispute resolution, and notices

What sections are optional to include in a Trade Secret License Agreement?

1. Sublicensing Rights: Include when licensee is permitted to sublicense the trade secrets to third parties

2. Improvements: Include when parties want to address ownership and licensing of improvements to the trade secrets

3. Quality Control: Include when the trade secret relates to manufacturing or product development processes

4. Export Control: Include when the trade secret may be subject to export control regulations

5. Source Code Escrow: Include when the trade secret involves software or source code

6. Training and Support: Include when the licensor will provide technical support or training

7. Audit Rights: Include when licensor requires right to audit licensee's compliance

8. Insurance: Include when specific insurance coverage is required for the licensed activities

What schedules should be included in a Trade Secret License Agreement?

1. Schedule A - Description of Trade Secrets: Detailed description of the trade secrets being licensed

2. Schedule B - Authorized Personnel: List of personnel authorized to access the trade secrets

3. Schedule C - Security Protocols: Detailed security measures and procedures to be followed

4. Schedule D - License Fees and Royalty Calculations: Detailed breakdown of financial terms and calculation methods

5. Schedule E - Required Protection Measures: Specific technical and physical security measures required

6. Appendix 1 - Form of Confidentiality Agreement: Template confidentiality agreement for employees/contractors

7. Appendix 2 - Reporting Templates: Templates for required periodic reports

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Licensing Agreement

Sector

IP

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology

Manufacturing

Pharmaceuticals

Biotechnology

Chemical

Food & Beverage

Automotive

Aerospace

Software Development

Research & Development

Industrial Processing

Consumer Products

Energy

Mining

Healthcare

Relevant Teams

Legal

Intellectual Property

Research & Development

Information Security

Business Development

Compliance

Risk Management

Corporate Development

Technology Transfer

Innovation

Commercial Operations

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Chief Legal Officer

General Counsel

Intellectual Property Counsel

Legal Director

Business Development Director

Research & Development Director

Technology Transfer Manager

Licensing Manager

Innovation Manager

Commercial Director

Chief Information Security Officer

Compliance Officer

Risk Manager

Corporate Counsel

Patent Attorney

Senior Contract Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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