In legislation and literature, there are numerous definitions of the term “know-how,” which originates from the English expression “I know how to do it” and was officially introduced in the Encyclopædia Britannica in 1911.

Generally speaking, the term “know-how” refers to “knowledge and experience of a production-technical, commercial, and managerial nature that are not protected by exclusive rights, are entirely or partially secret, or not easily accessible, possess economic value, and enable the user to produce and market products or perform services, as well as manage the enterprise.”

In Bulgarian legislation, we often encounter different terms and definitions for “know-how.” For example, in our latest legislation – the Trade Secrets Protection Act (TSPA) of 2019 – the term “know-how” is part of the term “trade secret.” This law implements Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use, and disclosure.

According to Article 3. of the TSPA, “A trade secret is any commercial information, know-how, and technological information that simultaneously meets the following requirements:

it is secret in such a way that, as a whole or in its precise configuration and assembly of elements, it is not generally known or easily accessible to persons within the circles that normally deal with this type of information;

it has commercial value due to its secret nature;

measures have been taken to keep it secret by the person who has control over the information.”

A very succinct provision is also contained in the Competition Protection Act of 2008, with the latest revision in 2023, where in Article 37 (1) “the acquisition, use, or disclosure of production or trade secrets in contradiction to fair commercial practice” is considered an act of unfair competition and is prohibited. At the same time, in § 1, item 9 of the final provisions of the CPA, a legal definition of the term “production or trade secret” is provided. According to it, “production or trade secrets are facts, information, decisions, and data related to economic activity, the preservation of which is in the interest of the rights holders, for which they have taken the necessary measures.”

From this definition, it follows that the term “production or trade secret” is related to an enterprise, in whose interests it is to keep its business decisions and available data, which are important for the competitiveness of the enterprise, strictly confidential. Therefore, it concerns important confidential information that enhances the competitive position of the enterprise compared to other competitors who do not have access to these trade secrets.

Provisions concerning the protection of trade secrets are also contained in the texts of the Commercial Act (Article 52 of the CA), the Labor Code (Article 126, item 9), the Commodity Exchanges and Wholesale Markets Act (Article 44 of the CEWMA), and the Access to Public Information Act (Article 17 of the APIA).

In research and development activities, technical solutions (such as production methods) are often created that leave no trace in the marketed material product. Analyzing this product by competitors does not lead to the disclosure of the production method and makes copying the product impossible. Such technical solutions should never be patented because a patent (representing a “legal monopoly”) is always associated with the publication of the invention, and competitors learn about its essence. If they use it and offer the same product on the market, it cannot be proven that it was produced by the patented method because it leaves no trace in the final product. Therefore, such technical solutions (methods) should be kept secret, which turns them into so-called “know-how” or “factual monopoly,” where third parties have no physical access to the confidential information. Consequently, technical solutions created in research and development activities that leave a trace in the final product should be patented if they meet the relevant criteria – global novelty, inventive step, and industrial applicability, while those that cannot be understood from the final product should be kept secret, i.e., turned into “know-how.”

Here, it can be concluded that despite the existence of “indirect” legal protection of know-how, the best way to protect it remains its careful safeguarding in secrecy, so that third parties have no “physical” access to it. Unlike the legal monopoly of a patent, the “factual monopoly” achieved in this way over know-how is not time-limited and does not require annual maintenance fees. As a rule, newly created technologies contain both patent protection and know-how. Even if the patent expires due to the end of its term, competitors would not be able to use and apply the technology due to the presence of know-how, which hinders them and often forces them to conclude the relevant agreements. On the other hand, the holder of know-how does not always limit its use to their own enterprise. For various reasons, they are often interested or compelled to provide their know-how for use by other parties. In such cases, the only possible protection of the provided know-how is through contractual clauses that oblige the recipient not to disclose it, to use it only for contractual purposes, and not to provide it to other parties. Regarding unclassified but hard-to-access know-how, the licensing agreement is the only option for protection aimed at the contractual partner.