Know-how can be a value driver or a hidden risk in commercial arrangements. Because it is intangible and often embedded in confidential information, processes and technical expertise, the main legal issues usually arise in how it is defined, protected, transferred and commercialised under Hong Kong law.
This complimentary Practice Note on Know-how – protection and licensing, produced in partnership with Benjamin Choi of Jingtian & Gongcheng, provides a practical overview of how know-how is protected, transferred and commercialised in Hong Kong. It provides actionable insights for lawyers advising on confidentiality, licensing, assignment and R&D related arrangements.
Key issues highlighted in the Practice Note
How know-how is protected in Hong Kong
The Practice Note explains that, in Hong Kong, know-how and trade secrets may be protected through the common law tort of breach of confidence and through contractual arrangements. It also highlights the importance of confidentiality as the foundation of protection and draws a practical distinction between know-how and broader trade secrets.
Key issues include:
• How know-how is treated as confidential industrial knowledge related to manufacturing and production
• When protection depends on breach of confidence and when contractual safeguards are also needed
• Why confidentiality obligations should be clearly structured and consistently maintained
What an NDA for know-how should cover
For practitioners, drafting is central to effective protection. The Practice Note outlines the elements of a well-drafted NDA, including the definition of confidential information, the purpose of disclosure, the scope of permitted disclosures, confidentiality obligations, time limits and relevant carve-outs. It also notes that an NDA does not provide complete protection on its own.
Key drafting points include:
• Defining technical information, processes and methodologies with precision
• Identifying the permitted use of the information
• Setting the scope of disclosures and the duration of confidentiality obligations
• Addressing public domain information and information already known to the recipient
How know-how may be licensed or assigned
The Practice Note also examines how know-how may be transferred through licensing or assignment. It sets out practical issues that arise in know-how licences, including scope, territory, term, payment structure, termination, warranties, sublicensing, assignment, subcontracting and the licensee’s operational obligations.
This is particularly relevant where parties need to commercialise know-how while also managing control, revenue generation and confidentiality protection.
How know-how is addressed in R&D agreements
The Practice Note further addresses how know-how is commonly transferred and protected in R&D agreements. It highlights ownership and rights allocation, compliance with funding and institutional policies, employee involvement, cross-border considerations, exit strategies and co-ownership of IP rights.
It also sets out practical risk-management points for lawyers advising on these arrangements.
Key issues include:
• Ownership and rights allocation in R&D arrangements
• Confidentiality and control over shared know-how
• Cross-border and exit considerations
• Internal controls, restricted access, monitoring and post-termination obligations
How Lexis+ Practical Guidance Hong Kong helps
The Lexis+ Practical Guidance Hong Kong Intellectual Property Module is designed to deliver clarity and practical tools tailored to real-world legal workflows. This new module includes:
• Guidance on IP protection strategies covering brands, designs, patents and confidential information
• Drafting templates for IP clauses in commercial contracts
• Risk assessment tools for infringement and licensing
• Practice notes and forms for trade mark and patent filings
Complete the form below to download the full Practice Note on know-how protection, licensing and commercialisation in Hong Kong.
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