First, we should know the concept of Know-How: the majority doctrine on the theme defines it as an ensemble of secret, technical, scientific knowledge or of some other nature, of a practical utility character, resulting in competitive advantages to a company or a professional using it.
It is well to highlight that the object of the know-how agreement is not to be confused with objects or patentable processes per se, which may be object of an agreement of a distinct nature, such as a patent license agreement.
On the other hand, the know-how agreement embodies a wider range of knowledge, which, in fact, some are incorporated into the secret fields (such as technologies, which do not concern patent object, either because they do not fulfil the relevant requisites or because the Patentee understands that they should not be patentable inter alia).
Through the know-how agreement, the above referred-to “knowledge” may be transferred to another individual or company, which will make use thereof. The advantage of a know-how agreement is the possibility of the contracting party, which is receiving this “ensemble” of knowledge, having a market differential before its competitors, upon having access to the information which will afford it a competitive advantage.
In view of its nature, the object of a know-how contract is inserted into the category of an intangible asset and because it deals with an asset, its owner may use it freely. Hence, this kind of agreement may be entered into two forms: by means of a license or by means of an assignment of rights.
For the purposes of producing effects against third parties, it is necessary to record the Know-how agreement with the Brazilian Patent and Trademark Office. By doing so, among other aspects, the agreement will legitimate the remittance of royalties abroad, the parties will be allowed to deduct taxes and also to enforce the terms of the agreement against third parties.
As one can note, the know-how contract is used for protecting secret, technical and scientific knowledge or of some other nature, and shall contain confidentiality clauses, in order to protect the possible secret on the knowledge transferred, being liable to sanctions to the Party which fails to fulfil its terms and, thus, infringing the terms of the contract, being liable not only to a fine, but also to the termination of the contract.
As a matter of course, the aggrieved Party in addition to possible contractual provisions, in the event of a breach of the contract, may also appeal to the Judiciary for indemnity regarding possible damage occurred.