CA72600 - Know-how: Receipts: Keep-out covenants

ICTA88/S531 (8)

Sometimes a person who disposes of know-how gives an undertaking which protects the buyer of the know-how against competition from the seller or from other licensees (a keep out covenant). The undertaking may be absolute or qualified and may or may not be legally valid. Treat any consideration received for the undertaking as consideration received for the disposal of know- how.