From the halls of academia... Trade Secrets Law Updated September 2007 Melvin F. Jager Chapter 15. Trade Secret Licensing
A "hybrid" license exists when both patent rights and trade secrets are covered in the same agreement. State law continues to control the interpretation of the hybrid license, except when federal patent or antitrust issues are raised. The parties will have substantial freedom to determine the patent royalties during the term of the patents, but no right to exact patent royalties after the patents expire or are invalidated. Likewise, the parties will have an even wider latitude under state law to negotiate the terms and payment period for the trade secret aspects of the license.
Serious legal problems arise in a hybrid license when the license does not differentiate between the patent and trade secret royalty obligations. When the patent and trade secret royalties are intertwined, state law will no longer exclusively control the trade secret aspects of the license. Instead, the federal law and policies governing the licensed patents will be extended to the licensed trade secrets. Although no Supreme Court case has addressed this area, the federal appellate courts have developed a uniform and unanimous set of rules governing hybrid licenses with intertwined patent and trade secret royalties. Jager then goes on to review over one dozen cases elaborating on this topic.To access those cases please refer to the print or Westlaw version of this updated resource...
