TECHNOLOGY TRANSFER

INTRODUCTION

Technology Transfer (also called Transfer of Technology (TOT) and Technology

Commercialization)1 are the processes by which the information or knowledge related to the
technological aspects travel within the group or between the organizations or entity. Taking this
to the broader scenario, give rise to International technology transfer in which the knowledge
travels in between the countries, which is not only limited to the Knowledge and information,
rather includes skill transferring, methods of manufacturing, physical assets, know-how, and
other technical aspects, and henceforth helps in further development of the technology and
innovation, by effectively utilizing the technology transferred and finally incorporating it.

Technology transfer has been used in the movements of technology from the laboratory to
industry or from one application to another domain application or taking developing countries
into consideration technology transfer helps in growing access to technologies which are related
to other developed countries and henceforth helps in approaching towards the newer
technologies and inventions i.e. from Developed to developing countries.

On the other hand licensing is allowance granted by the patent owner to another person or
organization for using the patented invention on agreed terms and conditions, while the patent
owner continues maintaining his ownership to the patent and hereafter becomes the source of
income by receiving the predetermined royalties or as per the condition.

So by combining the concept of the technology transfer with the licensing one can help in taking
the benefit of the technology research that has been done previously, as licensing creates the
permissible structure for the transfer of the technology to a larger assembly of researchers and
engineers, which will help in saving the expenses of conducting the research and the costs of
maintaining development activities or facilities and hence will help in the further development of
the technology which has already been done.

As now a days in the era of the advancement in the technologies there are many technologies
which with the combination with the other technologies is giving birth to the other new advent
technologies. so here the licensing do play the important role in providing the legal platform to
utilize the combination of the technologies made or discovered by the other persons or the
organization which has been created earlier, and hereafter prevents from wastage of the time and
the research cost incurred in developing the earlier inventions.

FORMS OF TECHNOLOGY TRANSFER:

Technology transfer can be classified into vertical and horizontal technology transfer 2

Vertical transfer refers to transfer of technology where transmission of new technologies is done
from the generation of new technology during the research and development programs into the
science and technology organizations, for instance, to the application related to the industrial and
agricultural sectors, or we can say that vertical transfer is the technology transfer commencing
from basic research to applied research, from applied research to development followed by
development to production.

While the horizontal technology transfer is the movement of a well-known technology from one
equipped environment to another (from one company to another) or say refers to the transfer and
use of technology used in one place or organization to another place or organization.

As discussed above generally developed countries follow the route:-

Research -> Development -> Design -> Production

While less advanced and developing countries follow the route:-

Production -> Design -> Development -> Research

Generally there are the reverse trends in the developing countries because the path to be followed
depends upon the transfer, absorption, and adaptation of existing technology

Today in the era of advent in technology one could choose any of the routes of the technology
transfer which depends upon how the technology advancement chains of the transferor and
transferee are associated.

Methods of Technology Transfer.

When choosing a transfer method, it is necessary to understand that the more complex is the
technology, the closer should the connections be between the buyer and the supplier. Technology
Transfer doesn’t end with equipment delivery. Equipment doesn’t generate new competences. The real
changes in the company’s work can be introduced only by transfer of knowledge, skills, and intellectual
property rights.

Licensing

Licensing is an agreement under which the owner of a patent, trademark or other intellectual property
gives permission to another company to use the technology developed by him (her), in a certain area
during a certain period of time. There are two main types of licenses: 1) one which grants an exclusive
right to use the technology; 2) another with non-exclusive right, which implies that the patent owner
may transfer the right to use the technology to other companies in the same area. Additionally, the
licensing agreement could include a sublicensing clause which permits the licensee to grant to someone
else the right to use the technology. The advantage of buying a license/patent is that it has lower costs,
compared with other technology transfer methods. Support Contract In this, the technology owner
participates in the technology implementation, providing at each stage of the transfer, technical
support, as well as personnel training. The involvement of technology developer in the technology
transfer process ensures a closer cooperation between two parties which favours a complete transfer of
all knowledge and skills related to the technology. In this way, the support contract may be a part of the
licensing agreement, in order to improve the transfer efficiency.
Joint Venture A joint venture is an agreement concluded between two or more companies in order to
execute a particular business. The joint venture implies mutual assets, management, risks, profit
sharing, co-production, services and marketing. Benefits from a joint venture in case of technology
transfer are the following: long-term cooperation between the parties, motivation of all participants in
the successful transfer, lower costs than if the companies have been working separately. The
disadvantages of a joint venture are often associated with the different vision and goals of both
partners, their inability to be independent in management. Also, companies are not always able to
determine objectively the value of capital contributed by each of them and, therefore, subsequent
profits distribution. (The foreign company provides innovative technology and management
competence, while the local company is familiar with the market and regulation. Finally, it is difficult to
determine the value of each asset).

Strategic Alliance A strategic alliance agreement is usually concluded between two or more big
companies in order to use specific skills of each of them in the development of new innovative
technologies. Strategic alliance could be in form of joint laboratories, research programs, production
and promotion of a new product. Typically, mutual efforts of different partners give better results than
an independent development of a new technology. During joint operations, each company can get the
needed experience in new areas and in different forms of management. The major weakness of strategic
alliances is the complexity in managing companies with different cultures. There will be at least two
teams of managers with different approaches. The companies may have different goals and strategies in
further business development of the new technology.

Foreign Company Acquisition A company may acquire a foreign start-up which is developing a new
technology. As a result, the company will not only get the technology, but also a team capable to
develop it in the future. Moreover, the acquisition of a foreign firm automatically places the company on
the new international market. Among the main risks of buying an existing firm, is the possible
resignation of key employees after the acquisition. Besides, the founders of the successful start-ups
would agree to sell it only for a price significantly higher than the market. This increases the risk of the
profitability in the future. Direct Foreign Investments Direct foreign investments are one of the main
methods of technology transfer at the state level. Generally, a foreign company invests in developing
countries in order to create a new market, remove export barriers and get an access to cheap labour. In
this case, a developing country gets all the benefits of technology transfer, particularly the development
of its own research environment. Besides, it is a way to create new jobs and raise taxes. However, to
attract foreign investors, the developing country’s government, generally, has to make some
concessions in its policy. As we can see in practice, without these concessions large international
corporations are not motivated in long term investments in developing countries.

ADVANTAGES RELATED TO TECHNOLOGY TRANSFER:

The advantages related to technology transfer comprises of the essential gain to the public who
benefits from the manufactured goods that get to the market and ultimately the availability of the
jobs which results from the improvement and sale of the products so formed. And hence it
encourages use of technology developed and the benefiting to the society development which
comes from the revenue of the tax payers. And escalating visibility to researchers and allows
researcher to generate and earn royalty income and henceforth attaining financial profits for the
government and the employees from royalty payments for those technology transfers that involve
patent licenses.

Moreover resulting in commercialization of the researches and the discoveries made, which was
the course of the investment done for the development and being protected by the patent.
Hereafter all the Investments done in the course of the development in intellectual property are
returned to the public through products made for the public, opportunity of more employment,
and revenue in the form of taxes.

Technology transfer strengthens industry by identifying new business opportunities which

contributes to enhancing the know-how and competitiveness of the technology providers, which
ultimately results in broadening the business area and re-focusing to the technologies and
systems to serve several different fields. In addition, technology transfer promotes the wider use
and awareness of technology and systems.

Technology transfer brings economic benefits by increasing revenues for both technology donors
and receiver's benefits with new and better products, processes, and services that lead to
increased efficiency and effectiveness, greater market share and increased profits.

Moreover technology transfer helps in earning rewards which is above and beyond the regular
salary which is received through patents, licenses, and other technology transfer awards which
help in benefiting intellectually and professionally through working collaboratively with their
peers in the industrial sector.

DISADVANTAGES RELATED TO TECHNOLOGY TRANSFER

As technology transfer is keen or meant for the business oriented activity, hence forth there can
be the chances to have financial or commercial risk, as we are well aware that Licences can
generate the income, but patent application which are not licensed will only cost money.

Even when the transfer programme related to the technology transfer is successful or in
particular after technology transfer institutional tensions may arise within the organization which
may be in between the recipient of licensing income and those who know they will never make
utilizable inventions. For the sake of remedy in those circumstances Institutional policies can be
made aiming to have partial rearrangement of income received by license between all research
groups but, using this strategy may not eradicate the problem rather in most of the cases
discoverer will be frustrated or disappointed because the income that they have earned is given to
other groups. Technology transfer activities may put researchers in conflict of interest situations,
especially when the transfer involves the creation of the spin- off company, hence Institutions
should be aware of these possible dangers.

Moreover problem can be because of non performance of licensee. And may be the licensee has
limited chances beyond the license scope unless future enhancements to patent included in initial
agreement and Unrealistic expectations and demands from licensor.
INDIAN SCENARIO REGARDING THE LICENSING AND TECHNOLOGY
TRANSFER

Technology in India is growing exponentially and has played an important role in all round
development and growth of economy in the country, India has opted for a wise mix of original
and imported technology. Henceforth "Technology transfer" plays a very important role and is
generally covered by a technology transfer agreement.

Developing countries like India generally not follow the usual path for development with regard
to technologies but use their advantage in the cutting edge technology options which is now
available and put the tools to use this modern technology.

Technology transfer is assumed to get benefits from R&D which is shared with the developing
and underdeveloped countries , so taking this to the point of consideration National research
laboratories is been constructed by the Indian government for the purpose of R&D which is yet
to be commenced by the private sectors.

India generally comprises of Small and medium enterprises and is growing since liberalization,
which has resulted in growth of The multinational enterprises, which in turn is competing with
the international companies which has enhanced the confidence of India. Not only confined to
the pharmaceuticals but is broadly categorized in other areas too such as agriculture, dairy and
other technologies.

Government of India is in the verge to open Technology Transfer Offices, Universities,

institutions which will be funded by central government and will acts as mechanism for
transferring or exporting the research conducted and its outcome to the desired place.

Though some of the Indian Institutes have been already commercializing their research and are
successful in technology transfer in which they have been licensed as technologies to industry.
Moreover, numerous cases of technology transfer are seen in India by various well-known
institutions.

CONCLUSION

Technology transfer and its licensing have played a crucial role in all round development and the
advent of the technology which in results help in the development of the economy of the country.
Hence forth helps in creating the wealth to the country.

India as a developing country need to work on the technology development and technology
transfer and needs to make a building strategy comprising of the construction of new offices
related to technology transfer and to make youngsters aware to the benefits related to the
technology transfer, by establishing the specified universities and henceforth increasing the pace
of the technology transfer and technical research and development in technical perspective.
Finally as discussed we can conclude that there is the possible advantage and disadvantage of the
technology transfer. But we have to see this in the broader aspect so that our country as well as
the citizen of our country should be benefited

Meaning of Technology. Technology primarily consists of two components: (1) Physical –

includes products, tools, equipment’s, techniques and procedures. (2) Informational – includes
know how in management, marketing, production, quality control, consistency, capable labour
and other functional areas.

Definition of Technology Transfer. Technology Transfer can be defined as (a) the authorized
exchange of ideas, confidential information, materials, and/or intellectual property rights (b)
among laboratories in government/non-profit/academic institutions and industry (c) to facilitate
further research and to enhance development of commercial products (adding value), in support
of the lab’s underlying mission. Meaning of Technology Transfer. Technology Transfer, also
called Transfer of Technology and Technology Commercialisation, is the process of transferring
skills, knowledge, technologies, methods of manufacturing, samples of manufacturing and
facilities among governments or universities and other institutions to ensure that scientific and
technological developments are accessible to a wider range of users, and who can then further
develop and exploit the technology into new products, processes, applications, materials or
services.

Technology Transfer Agreements.

Cooperative Research and Development Agreement (CRADA). A Cooperative Research and

Development Agreement (CRADA) is a written agreement between a private company and a
government agency to work together on a project. It’s one of the principal mechanisms used by
federal labs to engage in collaborative efforts with nonfederal partners to achieve goals of
technology transfer. The purpose of a CRADA is to make available Government facilities,
intellectual property, and expertise for collaborative interactions that lead to useful, marketable
products that benefit public health. • The government, through its laboratories, provides
personnel’s, services, facilities, equipment’s, intellectual properties, or other resources. • No
funds are provided by the government to the private parties. • The private parties provide funds,
personnel’s, services, facilities, equipment’s, intellectual properties, or other resources towards
the conduct of specified research or development efforts that are consistent with the missions.
The CRADA provides the non-Federal collaborator with the option to negotiate an exclusive or
non-exclusive license to any CRADA Subject Invention that results from the research. The
CRADA is the only agreement that permits a license option to intellectual property developed
during a collaborative research project.

Material Transfer Agreements (MTA). Material Transfer Agreements, or MTAs, are

agreements that establish the terms under which one entity or scientist will transfer to another
entity or scientist unique biologic materials for purposes of research, testing and perhaps
distribution for further research and testing. An MTA is intended to define the rights of the
parties primarily in respect to the extent of use of material, confidentiality, publication,
ownership of intellectual property (IP). In general, these agreements do not include payment for
the material, although transport costs may be required. There are two types of MTA: i. An
outgoing MTA covers the transfer of materials owned or controlled by one university to another
university, research institution, company or other external body, generally for research purposes;
and ii. An incoming MTA covers the transfer of materials to the university from another
university, research institution, company or other external body. iii. The MTA is usually
provided by the material provider.

Confidential Disclosure Agreements (CDA). CDA is made when any institution/ university/
company wants to share pre-publication manuscripts, raw data, ideas that might become
inventions, pending patent applications with an outsider (may be an institution/ university/
company). The outsider agrees not to disclose any portion of the agreement to any third party
without prior written permission of the institution providing the information. The outsider will
use reasonable care to maintain the confidentiality of the information with at least the same
degree of care as would be exercised, if the outsider would have been the proprietor of such
information. Key terms in a typical CDA includes: (i) What will be disclosed. (ii) Duty to mark
“CONFIDENTIAL” (iii) Exclusions (e.g., data already public) (iv) Duration of the secrecy (v)
Right/freedom to publish Following information is excluded from the confidentiality obligation:
(a) information that was known to the outsider about the agreement prior to their disclosure. (b)
information about the agreement that is or becomes generally available to the public through no
fault of the outsider. (c) information about the agreement that is subsequently made available to
the outsider from any third party that is not under a confidentiality obligation.

Clinical trial Agreement (CTA). A Clinical Trial Agreement (CTA) is a legally binding
agreement that manages the relationship between the sponsor that may be providing the study
drug or device, the financial support and /or proprietary information and the institution that may
be providing data and/or results, publication, input into further intellectual property. It includes
transfer and use of materials in research involving human subjects under a clinical protocol. It is
important to have a CTA for allocation of risk, responsibility, funds, obligations, and the
protection of academic, legal, intellectual property and integrity. A clinical trials agreement
describes and acknowledges responsibilities, terms of collaboration, requirements for payment
and reimbursement, publication and intellectual property terms, indemnification and or
insurance, guidelines for dispute resolution, etc. Other than this, it is more or less similar to
Material transfer Agreement.