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The know-how contract in Romania

What is the know-how and what does the know-how contract refer to in Romania?

Government Ordinance no. 52/1997 defines the notion of know-how as a set of formulas, definitions, technical documents, drawings and models, networks, processes and other analogous elements that serve to the manufacture and commercialization of a product. This is a contract that is needed in some cases and it can be drafted with the help of our team of lawyers in Romania.

The Romanian Tax Code provides a more complex definition of the know-how term, providing that it consists of any information relating to any industrial, commercial or scientific experience needed to manufacture a product or application of an existing process and whose disclosure to others is not permitted without the approval of the person who provided this information; in so far as it comes from experience, know-how represents what a manufacturer can not have knowledge of merely from the examination of the product and the knowledge of the progress of technology. Also, the Fiscal Code states that the know-how is an element that gives rise to industrial rights. More information about these rights is available upon request from the experts at our law firm in Romania.

The know-how contract is an unnamed contract under which the seller agrees to provide the buyer with his knowledge and experience, in the purpose that the buyer can use them according to his/her interests and not to disclose it to the public. At the same time, the seller does not take any part in the application of knowledge available to the buyer and the application of such knowledge does not guarantee results.

The contract of know-how is concluded in exchange for royalties consisting of an amount that is payable in cash or in kind for the use or right to use the know-how.

The contracting parties are called provider and beneficiary. Since the contract of know-how is an unnamed contract, there is no regulation of it in the Romanian legislation; therefore, the parties may choose the form in which to conclude the contract. However, it is recommended that the parties conclude this agreement in writing, in order for them to have proof of the extent of the contract and the agreement. What’s more, any unnamed contract must be concluded in respect to the general provisions found in art. 1179 of the New Civil Code regarding the validity conditions of a contract. Our Romanian lawyers can provide details about these conditions and the principles for validity.

What are the effects of a know-how contract in Romania?

The effects of this contract consist in a series of rights and obligations for both sides that can be drawn, more or less, from the definition of the know-how contract. Our team briefly states these below, however, for more details you can always reach out to our Romanian lawyers.

The obligations of the provider refer to: the obligation of communication of know-how, the obligation of exclusiveness (if the supplier is obliged to do so under the provisions of such a contract), the obligation to communicate the improvements brought to the know-how (if it is provided in the contract).

The obligations of the beneficiary are found in close relation to the obligations of the provider and encompass, as follows: the obligation to pay the price set for the communication of know-how, the non-compete obligation and, when stipulated by the contract, the obligation of secrecy regarding the know-how offered by the provider. Our lawyers in Romania can provide more details about these obligations.

The rights of the parties rise from the obligations of the parties to each other, so that the supplier will be entitled to payment, the right to secrecy and the right to non-compete. Equally, the beneficiary will be entitled to have the know-how communicated, the right to exclusiveness and the right to become aware of the improvements.

Please do not hesitate to contact the legal team of Darie, Manea & associates for professional consulting in the field of commercial law and intellectual property law. Our lawyers in Romania provide complete and accurate information in any area of ​​interest. The intellectual property law represents an important branch of the activity of our law firm.