INTRODUCTION- ASPECTS

Technology transfer is the process by which a technology, expertise, knowhow or facilities

developed by one individual, enterprise or organization is transferred to another individual,
enterprise or organization. Technology transfer is the term used to describe the processes
by which technological knowledge moves within or between organizations. Technology
transfer may happen from country to country, from industry to industry or from research
laboratory to an existing or new business. Technology transfer results partners in pooling
their expertise to enter new markets, commercialization of a new product or service or
improvement of an existing product or process and to get faster marketing of their products
and services1.1

The sale and purchase of the exclusive rights to a patented technology or of the permission
to use a given technology or know-how, takes place through legal relationships between the
owner of the exclusive rights or the supplier of the know-how, called the "transferor", and
the person or legal entity which acquires those rights or that permission or receives that
know-how, called the "transferee."

The legal relationship between transferor and transferee is essentially contractual in nature,
which means that the transferor of the technology consents to transfer and the transferee
consents to acquire the rights, the permission or the know-how in question. There are
various methods and legal arrangements through which technology may be transferred or
acquired i.e. by way of Sale or Assignment of IP Rights or License Agreement. 2

A contract for technology transfer can either be a licence agreement or a know-how

agreement. The licence agreement normally refers to the licensing of intellectual property
rights such as patents, trade marks, copyrights, etc. whereas a know-how agreement
involves the transfer of information or skills which have not received statutory recognition.
This distinction has an impact on the confidentiality and secrecy aspects of the contract. 3

In some cases, the technology is licensed. However, an organization may also acquire the
technology rights from the current holder, or even acquire the holder itself as a means of
securing the technology. 

This contract is used when a company (Licensor) assigns or licenses to another (Licensee)
registered industrial and intellectual property rights (patents, utility models,
trademarks, copyright etc.) as well as technical assistance and know-how. In the first case,
knowledge and exclusive rights are granted, which are recognised and registered in order to

1
Overview of the Contractual Agreements for the Transfer of
Technology, http://www.wipo.int/export/sites/www/sme/en/documents/pdf/technology_transfer.pdf , (last accessed on
20 February 2014)
2
https://www.mondaq.com/india/contracts-and-commercial-law/382680/technology-transfer-agreement-
intellectual-property-rights-and-competition-law
3
https://www.majmudarindia.com/pdf/Legal%20aspects%20of%20technology%20transfer%20agreements.pdf
manufacture and market products, whilst in the second, knowledge is transferred which has
no legal recognition, but that does have a value in itself. As in the Trademark License
Agreement, in the technology transfer contract the price for the assignment of industrial
and intellectual property rights, as well as the know how is initially paid a certain amount of
money (fee) and during the term of the contract a percentage (royalties) calculated on the
amount of the sales of the products under license, made by the Licensee. The fees for
technical assistance services are paid individually for each service rendered. 4

TYPES OF TECH TRANSFER IN RESEARCH PAPER

IPR

The law in India relating to intellectual property and to the protection of the rights of its
exploitation and use are contained in the Patents Act, 1970 ("Patents Act") (as amended),
Trade Marks Act, 1999 ("TM Act") and Copyright Act, 1957 ("Copyright Act"). The rules of
transfer of intellectual property rights are determined by statute as laid down in the Patents
Act, TM Act and Copyright Act.

Under the Patents Act, the creation of any interest in a patent, including an assignment or
license is not valid unless it is reduced to writing in a document embodying all the terms and
conditions governing the rights and obligations between the parties and an application for
registration of such document is filed with the Controller of the Patents.

Under the TM Act, a registered trademark can be assigned or transmitted with or without
goodwill of the business concerned. An assignment of a trademark must be in writing. No
specific form has been prescribed. Registration of assignment is necessary to establish title
to the registered mark.

Under the Copyright Act, an author assigns the whole or part of his rights to others to
exploit economically for a lump sum consideration. Assignment of copyright is valid only if it
is written and signed by the assignor or by his duly authorized agent. There is no prescribed
form for assignment. Registration of the assignment is not necessary for its validity. The
deed of assignment should contain the following i.e. the identity of the work; the rights
assigned and the duration and territorial extent of such assignment; and the amount of
royalty payable, if any, to the author or his legal heirs during the currency of the
assignment.5

ASSIGNMENT OF IPR

4
https://www.globalnegotiator.com/international-trade/dictionary/technology-transfer-
agreement/#:~:text=Ten%20Ter%20Teu-,Technology%20Transfer%20Agreement,technical%20assistance
%20and%20know%2Dhow.
5
https://www.mondaq.com/india/contracts-and-commercial-law/382680/technology-transfer-agreement-
intellectual-property-rights-and-competition-law
An assignment is a contract (or a provision within a contract) in which intellectual property
is permanently transferred. Sometimes in return for the assignments, the party selling the
property might get either a lump sum or a continuing payment known as royalty and in
some cases an assignment may provide for the return of the intellectual property under
certain conditions. 75 The seller or assignor of the intellectual property rights embodied in a
technology being transferred as expressed either in a purchase price or through the value of
the rights to the other technologies received in return, but can no longer privately
appropriate the intellectual property sold or assigned and if the sale involve a patented
invention, the owner may decide to transfer all the exclusive rights to the patented
invention to another person without any restriction of time or any other condition.76 6

LICENSING AGREEMENT

A license is a contract by which the owner of intellectual property gives someone permission
to use or exploit intellectual property rights for a limited time or in a limited way. A license
may be exclusive or non exclusive77 and may be restricted by territory, time, media,
purpose, or virtually any other factor desired by the parties. 7

TYPES OF LICENSING AGREEMENTS IN RESEARCH PAPER

COMPETITION LAW

Competition Commission of India (CCI) established by the Competition Act, 2002 is

mandated to prohibit anticompetitive agreements that cause or likely to cause appreciable
adverse effects on competition in markets and also prohibits abuse of dominance by
enterprises. Technology holder has every right to restrain the infringement of any of his
rights or impose reasonable conditions only necessary for the protection of any of his
intellectual property right (Section 3(5) (a) to (f ) of the Competition Act, 2002).

The goal of competition law is not to prohibit monopoly. Instead, the goal is to prohibit anti-
competitive conduct. An industry that achieves a monopoly without entering into
anticompetitive conduct will not violate the principles of competition law at all. Intellectual
property is a grant of monopoly by the state as a reward for innovation. Mere monopoly
does not reflect adverse effect in the competition. But the monopoly granted to a holder of
an intellectual property right can create barriers to entry and give rise to market power, the
abuse of which is prohibited by competition law.8

6
RESEARCH PAPER 28
7
RESEARCH PAPER 29
8
https://www.mondaq.com/india/contracts-and-commercial-law/382680/technology-transfer-agreement-
intellectual-property-rights-and-competition-law
Any technology transfer agreements which lead to an abuse of a market position by
imposing unreasonable conditions or other than essential for protection of such intellectual
property rights would be considered as anticompetitive. Following instances of technology
transfer agreement may be called anticompetitive, such as: (1) Patent Pooling wherein two
or more companies come together and cross license the technology relating to a particular
technology to each other so as to restrict others to acquire it. (2) Tie in arrangements to tie
a product with other product which is patented so that the acquirer has to get the other
product also from the patentee. (3) Prohibiting licensee to use technology from rival
company. (4) Prohibiting licensee from challenging validity of intellectual property rights. (5)
Price-fixation for the licensee to sell the licensed product, etc. These types of clauses
imposed in the technology transfer agreements by the intellectual property right holder or
licensee are called anticompetitive for the market, hence shall be void 2.9

Some of arrangements described above in technology transfer agreements are likely to

affect adversely the prices, quantities, quality or varieties of goods and services will fall
within the contours of competition law as long as they are not in reasonable juxtaposition
with the bundle of rights that go with intellectual property rights. Therefore the
unreasonable conditions are not covered under the protection given by Section 3 (5) of the
Competition Act 2002 and therefore Competition Commission of India may be called upon
to take note of anti-competitive agreement under Section 19 of the Competition Act 2002
and such agreements can be declared void.10

ISSUES IN CONTRACTS

 The extent to which transfer of physical material is necessary or desirable

 The extent to which the technology may require adaptation for the transferee’s
purposes and which party is responsible for such adaptation
 If the transfer is less than an outright assignment, the ramifications of integrating the
technology into the transferee’s existing technology or processes
 The extent of training, consulting and/or documentary instruction necessary or
desirable for the transferee to make effective use of the technology
 Any potential conflicts of interest or competition between the transferor and
transferee

https://www.legaleraonline.com/articles/dos-and-donts-of-technology-transfer-agreements

9
Technology Transfer Agreements in High Tech Industries: A Competition Law
Analysis http://cci.gov.in/images/media/ResearchReports/Technology%20Transfer%20Agreements%20in%20High-
Tech%20Industries%20_A%20Competition%20Law%20Analysis.pdf , February 2103, (last accessed on 20 February
2014
10
https://www.mondaq.com/india/contracts-and-commercial-law/382680/technology-transfer-agreement-
intellectual-property-rights-and-competition-law
TECH TRANSFER: COVID 19

CLAUSES

https://www.majmudarindia.com/pdf/Legal%20aspects%20of%20technology%20transfer
%20agreements.pdf

pg 29 research paper Prashant Kumar, Technology Transfer Agreement: Intellectual Property Rights and
Competition Law, MODAQ (Mar. 20, 2015), https://www.mondaq.com/india/contracts-and-commercial-
law/382680/technology-transfer-agreement-intellectual-property-rights-and-competition-law.