DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW

PROJECT REPORT ON

IPR AS A BARRIER TO THE TRANSFER OF TECHNOLOGY

AND SUSTAINABLE DEVELOPMENT

SUBMITTED BY:JAYATI CHANDRA

ROLL NO:- 55
4TH YEAR, VII SEMESTER

TABLE OF CONTENTS
1. INTRODUCTION
2. TRANSFER TECHNOLGY AND SUSTAINABLE DEVELOPMENT
3. THE QUESTION OF TRANSFER OF TECHNOLOGY FROM

DEVELOPED COUNTRIES TO EMERGING ECONOMIES

4. THE PROBLEM OF ACCESSIBILITY OF EMERGINF ECONOMIES TO
TECHNOLOGIES FROM ADVANCED COUNTRIES
5. APPROPRIATE TECHNOLOGIES
6. INTELLECTUAL PROPERTY RIGHTS AS A BARRIER TO TRANSFER
OF TECHNOLOGY
7. PATENT LAW AND TRANSFER TECHNOLOGY: LINK NOT PROVEN
8. CONCLUSION

INTRODUCTION
Technology transfer is a crucial and dynamic factor in social and economic development. 1 The
transfer of technology from advanced countries to emerging economies constitutes one of the
fundamental ways to pursue progress towards convergence between the two economies. 2 The
ever pervasive issue of Sustainable development is perhaps the most daunting challenge that

From Technology Transfer To Knowledge Transfer-A Study Of International Joint Venture Projects In China Dr
Richard Li-Hua, sourced from: http://www.iamot.org/paperarchive/li-hua.pdf (last accessed on 1st October, 2010)
2
Technology Transfer And Sustainable Development In Emerging Economies: The Problem Of Technology LockIn: sourced from: http://129.3.20.41/eps/othr/papers/0509/0509002.pdf( last accessed 27th September,2010)

humanity has ever faced.3 The struggle to advance human well-being in developing nations is on
a collision course with growing efforts to protect the global environment.
Technology transfer is the process of sharing of skills, knowledge, technologies, methods of
manufacturing, samples of manufacturing and facilities among governments and other
institutions to ensure that scientific and technological developments are accessible to a wider
range of users who can then further develop and exploit the technology into new products,
processes, applications, materials or services.4
"Technology transfer" includes a range of formal and informal cooperation between technology
developers and technology seekers.5
It is more than just the moving of high-tech equipment from the developed to the developing
world, or within the developing world. Moreover, it encompasses far than equipment and other
so-called hard technologies, for it also includes total systems and their component parts,
including know-how, goods and services, equipment, and organizational and managerial
procedures. The end result for the recipient must be the ability to use, replicate, improve and,
possibly, re-sell the technology. Thus technology transfer is the suite of processes encompassing
all dimensions of the origins, flows and uptake of know-how, experience and equipment
amongst, across and within countries, stakeholder organizations and institutions.6
Technology transfer does not take place in a vacuum. The performance of a given technology is
dependent on a wide range of factors, making identification of an environmentally sound or
otherwise appropriate technology somewhat problematic. Moreover, a technology that qualifies
as being environmentally sound at one point of time, may not do so at another - the performance
criteria against which it is assessed may change as a consequence of new information or
changing values or attitudes; a technical breakthrough may give rise to more desirable
alternatives.
3

Sourced from: www.allamahmed.org/attachments/WRSTSD-04.pdf ( last accessed on 27th September. 2010)

Sourced from: http://en.wikipedia.org/wiki/Technology_transfer( last accessed on 3rd September, 2010)
5
Sourced from : http://www.gdrc.org/uem/techtran.html (last accessed on 29th September, 2010)
6
Sourced from : http://www.unep.or.jp/ietc/techtran/focus/technology_transfer_v6.pdf (last accessed on 27th
September, 2010)
4

It is therefore vital that recipients and users of a technology are able to choose an option that
meets their specific needs and capacities, while also being environmentally sound in its operating
locale and over its operational life cycle. It is, of course, highly desirable that the technology is
also found to be economically viable and socially acceptable, and hence sustainable.7

TECHNOLOGY TRANSFER AND SUSTAINABLE DEVELOPMENT

Efficient transfer of technologies is crucial for a sustainable regional and international economic
recovery. Technology transfer in the environmental field has sparked off one of the most intense
debates between developed and less developed countries in recent years. Despite the
commitment and conviction regarding the need to transfer Environmentally-Friendly Technology
from developed countries to less developed ones, the view of many observers is that the
negotiations taking place at the United Nations Climate Change Convention and Agenda 218
have not lived up to expectations.

7
8

Sourced from: www.unep.or.jp/ietc/techtran/focus/technology_transfer_v6.pdf (last accessed on 1st October, 2010)

Sourced from: http://www.un-documents.net/agenda21.htm (last accessed on 4th October, 2010)

The transfer of clean technologies to emerging economies can provide vital support to the overall
goals of reducing greenhouse gases.9 Indeed, this issue occupies a prominent place in the United
Nations Framework Convention on Climate Change (UNFCCC, 1998). However, past
experience indicates that, in order to be successful, the transferred technologies must consider a
series of factors10 namely:
(i)

the type of needs of a developing economy and the degree to which the process of

(ii)
(iii)
(iv)

technology transfer is in harmony with the countrys other development goals;

the requirement for appropriate technologies able to meet these needs;
the availability of the expertise necessary to ensure the transfer is effective;
the factors related to the adoption, assimilation and adaptation of the imported
technology.

Experience has shown that often the technology transferred and used by transnational companies
in emerging economies has caused significant negative externalities for the environment in the
host countries. Perceptibly, this is not to say that all technology transferred or used by companies
from advanced countries in emerging economies has had negative consequences for the
environment in the latter.
Moreover, the urgent need for new technologies felt by emerging economies should not lead one
to think that the only valid technology is that being sold by developed countries. It is necessary
to maintain and develop local technological innovation as far as possible, as it can often respond
better to the reality of emerging economies.11

Ramanathan, R. 2002. Successful Transfer Of Environmentally Sound Technologies For Greenhouse Gas

Mitigation: A Framework For Matching The Needs Of Developing Countries, Ecological Economics (In Press)
10

Parikh, J.K. And Kathuria, V.K. 1997. Technology Transfer For GHG Reduction: A Framework And Case

Studies For India, Presented At The STAP Workshop, Amsterdam, The Netherlands, January 19-20
11

Sourced from: http://129.3.20.41/eps/othr/papers/0509/0509002.pdf (last accessed on 1st October, 2010)

THE QUESTION OF TECHNOLOGY TRANSFER FROM DEVELOPED

ECONOMIES TO EMERGING ECONOMIES

Technological transfer should not respond to the private interest of a few transnational
corporations that dominate the world economy but rather advance the need, and support the
drive for development. 12
In their struggle to survive, enterprises in developing countries are rushing to keep abreast with
the technological advancements. As the indigenous technological capabilities of developing
countries are weak by default, they intend to import technology internationally. Experience
showed that, in doing so, a number of obstacles might render the technology acquisition process
by them, less effective, or even sometimes, a failure economically and/or technically. Cases in
developing countries show that the technological capabilities of the technology recipient country
12

Sourced from http://www.mainstreamweekly.net/article91.html ( last accessed on 4th October,2010)

are a decisive factor in successfully transferring and absorbing of the particular technology.
Building the indigenous technological capabilities should be the ultimate goal of the
development countries in order to cope with the aggressive competing world. Government of
developing countries should review their strategic plans in order to consider the fast moving
technology advancements.13
The willingness of developed countries to facilitate access to and transfer of technologies to
developing countries is reflected in a number of international agreements.14 These agreements
recognize that technology transfer to developing countries is important to enable their integration
into the global economy, and meet their international obligations and commitments. They also
acknowledge that technology transfer is important in facilitating the creation of a sound and
viable technological base in developing countries.
Environment Diplomacy is often said to run along the lines of the North and South divide, with
opposite positions being advocated by the developed world versus the developing countries. At
the heart of this fundamental divide is the claim by the developing countries that they cannot and
should not assume the same commitments as developed countries in multilateral environmental
agreements (MEAs) because they do not have the human, financial or technical resources to
sustain the large-scale technological adaptation and innovation generally

required for the

implementation of such agreements. Their sustainable industrial emancipation becomes

dependant on the technological and financial assistance provided by the developed countries.
Many MEAs reflect this concern through the insertion of provisions that deal with the transfer
of environmentally sound technologies. These clauses generally provide for some sort of
commitment on the part of the developed contracting parties to promote, facilitate or finance the
transfer of environmentally sound technologies to their developing counterparts.15

13

Sourced from: http://www.inderscience.com/search/index.php?

action=record&rec_id=6825&prevQuery=&ps=10&m=or
14

UNCTAD (2001) Compendium of international arrangements on technology transfer: Selected instruments,

(Geneva: United Nations)

15

http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/gintenlr11&div=8&id=&page

A comprehensible need for emerging economies to obtain new technologies enabling them to
increase the yield obtained from their resources is an essential part of the search for an adequate
development strategy.
Nevertheless, to ensure that this development can be sustained over time, other factors need to be
present in addition to the simple transfer of a technology from one place on the planet to
another.16 As far as the relationship between these changing concepts of technology in economic
theory and their implications for sustainability are concerned, attention has shifted to the link
between environmental policy and the direction of technological change.

APPROPRIATE TECHNOLOGIES

Appropriate technology (AT) is technology that is designed with special consideration to the
environmental, ethical, cultural, social, political, and economical aspects of the community it is
intended for. With these goals in mind, AT proponents claim their methods require fewer
resources, are easier to maintain, and have less of an impact on the environment compared to
techniques from mainstream technology, which they contend is wasteful and environmentally
polluting.
If the transfer of inadequate, unsustainable, or unsafe technologies is to be avoided, technology
recipients should be able to identify and select technologies that are appropriate to their actual
needs, circumstances and capacities.
Therefore, a key element of this wider view of technology transfer is choice. There is no single
strategy for successful transfer that is appropriate to all situations. Desirably a technology
16

Technology Transfer And Sustainable Development In Emerging Economies: The Problem Of Technology LockIn, sourced from: http://129.3.20.41/eps/othr/papers/0509/0509002.pdf

recipient will choose a technology which at least meets the definition of being environmentally
sound.
Environmentally Sustainable Technologies are technologies that have the potential for
significantly improved environmental performance, relative to other technologies. ESTs protect
the environment, are less polluting, use resources in a sustainable manner, recycle more of their
wastes and products, and handle all residual wastes in a more environmentally acceptable way
than the technologies for which they are substitutes. Preferably a technology recipient will go
even further, and select a sustainable technology i.e. a technology that is not only
environmentally sound but also economically viable and socially acceptable. Such technologies
contribute to the three pillars of sustainable development.17

THE PROBLEM OF ACCESSIBILITY OF EMERGING ECONOMIES TO

TECHNOLOGIES OF ADVANCED COUNTRIES: THE TRANSFER
PROCESS
Most of the technological and social innovations originated up to the Industrial Revolution in
countries now called developing. Medieval Europe was the recipient of this knowledge. Its
technological superiority is thus very recent in origin. Only a few centuries ago the flow of
technology was the other way around.
As they pursue economic development, developing countries possess high demand for processes
and technologies that have climate-friendly methods or alternatives. However, these nations
currently face barriers to entry because of trade policies and intellectual property regulations
that render procurement of these technologies cost-prohibitive.18
The technological gap between the rich and the poor countries lies at the root of the economic
distance between these two areas. It, however, offers a certain advantage to the acceleration of
17

Technology Transfer: The Seven CS For The Successful Transfer And Uptake Of Environmentally Sound
Technologies. Sourced from: http://www.unep.or.jp/ietc/techtran/focus/technology_transfer_v6.pdf
18
Sourced from: http://www.law.duke.edu/journals/dltr/articles/2009dltr001.html (last accessed on 27th September,
2010)

the rate of economic and social growth of the late-comer to development. Its origin lies in the
accumulation of technological knowledge in the advanced countries. In the growth of such
knowledge, no single nation or race has remained pioneer for long. An important feature of this
transnational and cumulative stock of world technological knowledge is its relatively easy
transmissibility. And the use of such knowledge anywhere else does not in any way diminish its
supply to its originator or to others. The improvement in the level of living in the developing
countries does not require any major new scientific discoveries. The accumulated knowledge is
sufficient to accomplish this task. What is needed is to ensure its transfer to the needy.
The seal of private property has now been put over technical knowledge. Its ownerswhether
individuals or enterprisesguard its secrecy as the most highly prized possession. Its transfer is
thus severely limited.
The transfer of technology is thus neither free nor automatic. And the market mechanism through
which this transfer usually takes place is highly inadequate. These weaknesses may be briefly
summarized here.
Firstly, the market for technological knowledge by its very nature is even more imperfect than
that for commodities. This makes it extremely difficult to fix a real price for the technological
information. Secondly, the enterprises in the developing countries do not even have the basic
information needed for looking for a new production technology and the details of its operation.
Moreover, in such an imperfect market, the enterprises in the developed countries keep the
information on production process a closely guarded secret. Finally, there is a greater difficulty
in the decisions to import technology than in other decisions to draw a balance between private
and social costs and benefits.
These inadequacies of the market mechanism are compounded by the fact that developing
countries are only receivers of technology. In this one-way exchange, the weaknesses of the
market mechanism are accentuated rather than being partially cancelled out, as they might be, if
the exchange were in both directions.
There is thus neither a world market, nor world exchange nor world prices for technology. In it,
the developing countries are like tourists buying souvenirs in foreign lands. In the international

exchange of technology, the developing countries are thus inherently in the position of unequal
partners. Hence the importance of deliberate action at the national, regional and international
levels for strengthening their bargaining capacity. These issues have formed the background of
the growing concern of the developing countries with the problems of transfer of technology.

INTELLECTUAL PROPERTY RIGHTS AS A BARRIER TO TRANSFER

OF TECHNOLOGY
Intellectual Property Rights are acting both as an incentive and as an obstacle to the transfer of
these technologies. Previously these rights were visualized only as a private right to reward
innovation and to promote the distribution of knowledge in the context of societal goals. But
Intellectual property rights are seen as the first and foremost a deal between inventors/creators
and society; it reflects a trade-off in which society receives access to/ publication of an inventors
creation of a new invention, and in return provides the inventor a temporary sole property right
to a defined technology.
Equally daunting, and possibly more complex, is the issue of intellectual property rights (IPR).
Developed countries have long held that strong patent laws in developing countries would ease
technology transfer. Not so, say some, Amir Hisham Hashim, associate professor at the
department of electrical power at Tenaga National University in Malaysia, is co-author of a fivenation Asian study that made a contentious claim. He says his own country's experience is that
strong domestic intellectual property laws do not necessarily reap technology transfer benefits.
Strictly enforced patent rights can restrict technology transfer, because they lead to high licence
costs and can therefore obstruct the adaptation of knowledge to local conditions.

Effectively, the foreign technology owner determines how technology is deployed and whether
it is improved or needs investment. Even if developing countries can ease their financial and
legal passage to clean technology, there are other pressing problems. They need the skills to
adapt and use new climate friendly technologies and to develop more themselves.. 19

PATENT LAW AND TRANSFER TECHNOLOGY: THE LINK NOT

PROVEN
Strong IPR regimes could hinder developing countries' access to technology. If a developing
country is able to uphold patent law, patents are often held by foreign investors or corporations,
she said. Monopoly rights held by such corporations stifle local research by preventing local
firms from adapting technology to local needs, she told the meeting. Although the need for
technology transfer has been repeatedly stressed in various UN climate change documents and
negotiations, it has not taken place at a scale large enough to help stall climate change, observed
participants at the meeting.
The bottleneck lies in developed and developing countries' differing views. Rich countries focus
on regulatory measures while developing countries prefer collaborations that help them adapt
technology to meet local needs and assist with paying license fees to use technology.
The paper recommends that, because TRIPs allows individual countries to decide when to issue a
'compulsory license' to override a patent on a product in a national emergency, "it would be
worthwhile to have a declaration recognizing climate change as a national emergency and
climate change mitigation as a public good".20 Developing countries have pointed increasingly,
since the 2007 United Nations Framework Convention on Climate Change (UNFCCC) Bali
19

Sourced from: http://www.teriin.org/div/Paper_AEI.pdf ( last accesed on 4th October, 2010)

Sourced from: http://www.scidev.net/en/news/link-between-patent-law-and-tech-transfer-not-proven-.html (last
accesed on 4th October, 2010)
20

meeting, to the role of intellectual property rights (IPRs) as a possible barrier in the transfer of
climate change technologies.

CONCLUSION
Just as knowledge is becoming the undisputed centerpiece of global prosperity ( and lack of it,
the core of human impoverishment), the global regime on intellectual property requires a new
look..
Technology is a double-edged sword. It is both a cause of many environmental problems and
a key to solving them. Thus, new technologies have the potential to contribute to a decoupling of
economic growth from pressure on natural resources.21
It is advisable to conduct early evaluation of the possible consequences of the adoption of a
technology. From this first implication it also follows that it is necessary for the receiving
country to have a system centralizing relevant information for this evaluation, and guiding the
process of transfer and adoption along a sustainable path development in emerging economies, it
is clear that it is necessary to have sufficient financial resources to permit these countries to
acquire and adopt the best possible technologies from the environmental point of view.
New management methods and decision support tools must therefore be developed and applied.
The implementation of sustainable solutions must be part of an integrated management and
governance framework which addresses the needs of the present without compromising the
ability of future generations to meet their own need
21

Sourced from: http://ec.europa.eu/environment/pubs/pdf/sustdev.pdf (last accessed on 5th

October,2010)

The paper reflects that social helmsman ship of technological innovation in the direction of
sustainability is a very challenging task, and to suggest what is required to take it on. It calls for
changes in attitude in the scientific community, raising awareness in the general population, the
development of better methods of monitoring and forecasting in academia and government, and,
most importantly, ethics and social responsibility to be much more highly valued in general than
they are at present. It calls, above all, for changes in the forces that drive scientific and
technological innovationsthe funding systems, the military and business interests, and
consumers. To identify for greater transparency of scientific and technological enterprises,
enabling societal actors to better monitor and assess, to forecast and to influence developments at
an early stage. It calls for new and comprehensive visions of the scientific and technological
foundations of a society of the future, one which is sustainable, attractive, and fulfills human
needs and aspirations. It calls for backcasting and social experimentation and for new forms of
governance.22
There is no single package of appropriate technology that can be devised to suit the needs of
all countries, but the key elements of a portfolio of appropriate technologies can be identified.
We need proliferation of efforts to conserve scare resources, prevent future deterioration of our
natural environment and sustain economic development.

22

Sourced from: http://www.greattransition.org/documents/PDFFINALS/8Technology.pdf (last accessed on 4th

October, 2010)