As a result of this emphasis on relationship, the scope of trade secret protection is much broader than patents, and can reach even to trivial improvements over techniques that are broadly known. Trade secrets also include nontechnical information that can be of value, such as marketing studies. Patents are products of federal statute, with roots in the Constitution. A patent is exclusive right granted by the government for a limited term of years to exploit an invention. As a result of this tension, the exploitation of patent rights is subject to significant limitations, some of which are discussed below.
Licenses are merely a form of contract.
Where the subject of a license is exclusively trade secrets, state law will govern its interpretation and validity. In general, parties are free to bargain as they wish regarding trade secrets. Patent licenses Two fundamental ways in which the law protects fair competition by limiting a patent owner's freedom of contract relate to duration of royalty and excuse from payment due to invalidity of the patent. In that case Thys owned a set of patents covering a hop-picking machine. It decided to exploit these patents by building the machines and selling them.