Contrary to the common opinion, neural networks may be used for knowledge e
xtraction. Recently, a new methodology of logical rule extraction, optimiza
tion and application of rule-based systems has been described, C-MLP2LN alg
orithm, based on constrained multilayer perceptron network, is described he
re in details and the dynamics of a transition from neural to logical syste
m illustrated. The algorithm handles real-valued features, determining appr
opriate linguistic variables or membership functions as a part of the rule
extraction process. Initial rules are optimized by exploring the accuracy/s
implicity tradeoff at the rule extraction stage and the one between reliabi
lity of rules and rejection rate at the optimization stage. Gaussian uncert
ainties of measurements are assumed during application of crisp logical rul
es, leading to "soft trapezoidal" membership functions and allowing to opti
mize the linguistic variables using gradient procedures. Comments are made
on application of neural networks to knowledge discovery in the benchmark a
nd real life problems.