ThomasMoreAI Know-How License Agreement
License agreement for confidential technical information and trade secrets where the licensed IP is not covered by patents. Sensitive know-how detail belongs in confidential exhibits, not in the agreement body.
Prerequisites
- Parties — legal names, entity types, jurisdictions, signatory authority.
- Know-how scope — technical description, confidentiality level, exhibit references.
- Field & territory — permitted uses, industries, geographies, manufacturing vs. sales scope.
- Exclusivity — exclusive / sole / non-exclusive; sublicensing position.
- Economics — upfront fee, royalties, milestones, minimums, audit terms.
- Transfer plan — documentation, training, support, timelines.
- Diligence — milestones, reporting, commercialization obligations.
- Compliance — export controls, regulatory approvals, industry rules.
- Prior agreements — existing NDAs, collaboration agreements, or IP licenses.
If any prerequisite is missing, flag it as an open item and proceed with labeled assumptions.
Step 1: Deal Intake
Populate the intake table from term sheet, tech schedule, and counsel input.
| Item | Required Detail | Source |
|---|---|---|
| Parties | Full legal name, entity type, jurisdiction, address | Term sheet / records |
| Know-how | High-level description, confidentiality qualifiers | Tech schedule |
| Field of use | Industry, product, application limits | Term sheet |
| Territory | Countries/regions, manufacturing vs. sales scope | Term sheet |
| Exclusivity | Exclusive/sole/non-exclusive, licensor carve-outs | Term sheet |
| Sublicensing | Allowed scope, consent requirements, pass-through terms | Term sheet |
| Consideration | Upfront, milestones, royalties, minimums | Term sheet |
| Royalty base | Net sales definition, deductions, bundles | Finance notes |
| Support | Training, tech transfer, validation, response times | Tech plan |
| Improvements | Ownership, grant-back, joint development | Negotiation |
| Compliance | Export, regulatory, anti-corruption | Compliance team |
| Disputes | Governing law, venue, arbitration | Counsel |
Step 2: Draft Definitions
| Term | Drafting Notes |
|---|---|
| Know-How / Licensed Technology | Identify by category + confidential schedule reference |
| Confidential Information | Standard exclusions + trade secret status |
| Field of Use | Clear boundary conditions and examples |
| Territory | Manufacturing vs. sale/import scope |
| Net Sales | Allowed deductions list |
| Improvements | Scope definition and ownership triggers |
| Affiliate | Control threshold and inclusion criteria |
| Milestone | Objective criteria + dates |
Step 3: Draft Agreement Sections
Follow this section order:
- Parties, recitals, background
- Definitions
- Grant of license — scope, exclusivity, field, territory
- Sublicensing — consent, flow-downs, termination effects
- Improvements/derivatives — ownership and grant-back
- Consideration — upfront, milestones, royalties, minimums
- Reports, records, and audit rights
- Confidentiality and trade secret safeguards
- Tech transfer — deliverables, training, support
- Diligence and performance milestones
- Representations, warranties, disclaimers
- Indemnification and procedures
- Limitation of liability and carve-outs
- IP ownership and enforcement
- Term, termination, wind-down
- Compliance — export control, regulatory
- Insurance (if required by risk profile)
- Dispute resolution and governing law
- General provisions; signatures; exhibits
Financial Terms
Upfront Fee: $[amount], due [date], creditable against royalties: [Yes/No]
Milestones:
- [Objective event] -> $[amount] due within [days]
Minimum Royalties:
- Year 1: $[amount]
- Shortfall consequence: [pay shortfall / convert exclusivity / termination]
Royalties:
- Rate: [x% of Net Sales / $ per unit]
- Bundled products: [allocation method]
- Affiliate sales: [FMV or transfer price standard]
- Reporting: [quarterly/monthly] within [days]
- Audit: [once/year], underpayment threshold [x%] shifts costs
Confidentiality Controls
- Care standard: at least reasonable, not less than own highest-value info
- Access limited to need-to-know personnel under written NDA
- Physical, technical, and administrative safeguards specified
- Compelled disclosure: notice + protective order + minimum disclosure
- Survival: perpetual or until public domain without breach
- Return/destroy materials on termination; officer certification
Improvements Ownership
| Scenario | Ownership | License Back |
|---|---|---|
| Licensor-only | Licensor | Included or separate fee |
| Licensee-only | Licensee | Grant-back terms |
| Joint | Joint / by inventorship | Cross-license scope |
Termination Triggers
| Trigger | Cure Period | Effect |
|---|---|---|
| Material breach | 30-60 days | Termination |
| Non-payment | Short cure | Termination or conversion |
| Confidentiality breach | None | Immediate termination |
| Insolvency | 30-90 days | Automatic termination |
| Diligence failure | N/A or short | Convert exclusivity or terminate |
Step 4: Attach Exhibits
- Exhibit A — Confidential know-how description
- Exhibit B — Tech transfer deliverables and timeline
- Exhibit C — Milestones and reporting format
- Exhibit D — Royalty report template
Guidelines
- Keep sensitive know-how detail in confidential exhibits, not the agreement body.
- Exclusivity must be paired with diligence milestones or minimum royalties.
- Define royalty base so it is mechanically auditable; specify deductions tightly.
- Include explicit export control language when export-controlled technology is involved.
- Use bold or caps for warranty disclaimers and limitation of liability.
- For international deals, confirm governing law and arbitration seat; flag choice-of-law concerns.
- Mark uncertain citations or statutory references with
[VERIFY].