PATENT AND TRANSFER OF TECHNOLOGY

8.1: Intellectual Property Rights

Submitted by
MAYANK TRIPATHI
UID: UG2017-58
4 Year-8th Semester
th

Academic Year: 2020-21

Submitted to
Prof. (Dr.) Ragini Kubhalkar
(Assistant Professor of Law)
Ms. Anuja Misra
(Assistant Professor of Law)

February 2021

MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

Table of Contents

Introduction................................................................................................................................3

Research Methodology...............................................................................................................4

Aim and Objectives....................................................................................................................4

Research Questions....................................................................................................................4

Forms of Technology Transfer...................................................................................................4

Advantages Related to Technology Transfer.............................................................................5

Disadvantages Related to Technology Transfer........................................................................6

Indian Scenario Regarding the Licensing and Technology Transfer.........................................7

Conclusion..................................................................................................................................8

Bibliography
Introduction

Technology Transfer1 (also called Transfer of Technology (TOT) and Technology

Commercialization) 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.2
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 does 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

1
Ganguli, P., Development of University-Industry Partnerships for the Promotion of Innovation and Transfer of
Technology: India.
2
MacWright R. and Ritter, J., “A Systematic Approach to Technology Marketing,” in AUTM, Technology
Transfer Practice Manual.

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which has been created earlier, and hereafter prevents from wastage of the time and the
research cost incurred in developing the earlier inventions.3

Research Methodology

The researcher has adopted the doctrinal method of research given the limitation of resources,
also reference to book, research paper, articles, websites and online journals have been made
for the conceptual clarity. Also, the researcher has based his conclusion on the basis of
secondary data available across platforms and has limited his research to the Indian context
only.

Aim and Objectives

The aim of the researcher is to counter analyze the existing provisions by reverse engineering
the concept attached with limitation and frame hypothesis, which includes but isn’t limited to
the following factors, which has been understood by analyzing the concept, that cover the
following questions:
 To understand the ambit and scope of technology transfer?
 Does technology transfer infringe on the rights of the original developers?
 Does Technology Transfer help the cause of mankind?

Research Questions

 What is the meaning of Technology Transfer?

 What are the roles of developed countries like India in terms of enhancing the scope
of Technology Transfer?
 What impact does it have on R&D in case of Technology Transfer?

Forms of Technology Transfer

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

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

3
Andersen, S.O. et al. (2007). Technology Transfer for the Ozone Layer: Lessons for Climate Change.
Earthscan, London. Quoted in Khor (2008b).

4
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.4

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,
Habibie (1990), often referred to as the architect of the Indonesian aircraft industry, states
that, “technology receivers must be prepared to implement manufacturing plans on a step-by
step basis, with the ultimate objective of eventually matching the added-value percentage
obtained by the technology transferring firm.” He refers to such an approach as “progressive
manufacturing” and popularized the slogan, I “begin at the end and end at the beginning”
implying that a transferee firm should start with production and move backwards to research.5

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.6

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

4
Evans (1999), quoted in Ockwell et al. (2007), p. 29.
5
Khor (2008a); UNCTAD (1996). See also Correa (2000), pp. 26-37.
6
Saad and Zawdie (2005), quoted in Ockwell et al. (2007), p. 29.

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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.7
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.8

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

7
UNDP (1999), p. 73. See also Gerster (2001).
8
See Article 40.4 of the TRIPS Agreement, available at: http://www.wto.org/ english/docs_e/legal_e/27-
trips_04d_e.htm.

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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.9
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
9
See, e.g., Article 4.1(c) of the UNFCCC and Article 10 of the Kyoto Protocol.

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industry. Moreover, numerous cases of technology transfer are seen in India by various well-
known institutions.10

10
Andersen, S.O. et al. (2007). Technology Transfer for the Ozone Layer: Lessons for Climate Change.
Earthscan, London. Quoted in Khor (2008b).

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Conclusion

While few would consider IPR protection to be a panacea for developing countries, views on
the importance of IPR protection tend to be polarized. On one side, it is believed that stronger
IPR protection can encourage innovation, technology diffusion and enhance growth. On the
other it is thought that stronger IPR protection leads to monopoly power for patent holders,
reduces the incentive to innovate and limits the diffusion of knowledge. The evidence
reviewed and presented here supports neither claim. The impact of IPR protection on growth,
innovation and technology diffusion in developing countries is likely to depend upon a
number of factors. While stronger IPR protection in the poorest countries is not likely to lead
to substantial benefits in terms of innovation or technology diffusion, the administrative cost
of developing a patent system and the enforcement of TRIPS, along with the potential abuses
of market power in small closed markets suggests that such countries could lose out from
TRIPS. Stronger IPR protection in the poorest countries may also inhibit or lengthen the
imitative stage of development that seems to be necessary in order to develop innovative
capacity in many industries. Policies aimed at improving the business environment and
encouraging imports of technology embodied in goods could potentially reduce such costs,
though their impact on other development-related goals needs to be carefully weighed. In
other developing countries the potential for benefits from TRIPS is stronger. 11 Here existing
firms engaging in imitation could be encouraged through stronger IPR protection to shift
resources towards adaptive innovation, while stronger IPR protection is likely to increase
trade and FDI flows into countries with existing imitative ability, thus enhancing technology
transfer. Policies to enhance the benefits of TRIPS would help develop the domestic
innovative sector through encouraging R&D and investment in education, along with policies
aimed at opening markets to foreign imports and encouraging inward FDI.12
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

11
Enercon GmbH vs. International Trade Commission, 151 F.3d 1376 (CAFC 1998).
12
Federal Trade Commission vs. Xerox Corporation, 86 F.T.C. 364 (1975).

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transfer and technical research and development in technical perspective. 13 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.14

Bibliography

13
42 USC Sec 2183. See also http://www4.law.cornell.edu/uscode/42/2183.html.
14
Sec, e.g., Article 4.1(c) of the UNFCCC and Article 10 of the Kyoto Protocol.

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%20Transfer%20Mechanisms/ An%20overview%20of%20TT%20and%20TT
%20Models.pdf.
 http://unfccc.int/ttclear/pdf/EGTT/11%20Bonn
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 Shashikant, Sangeeta (2008). Meeting on patent law, as Secretariat issues report.
South-North Development Monitor (SUNS), No. 6501, 23 June.
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available at http://www.twnside.org.sg.
 Stilwell, Matthew (2008b)F2􏰁Use of Compulsory Licenses: Selected Practice and
Provisions in the United States and International Law. Memo prepared for Third
World Network.
 TWN (2008). Possible Elements of an Enhanced Institutional Architecture for
Cooperation on Technology Development and Transfer under the UNFCCC. Third
World Network, available at http://www.twnside.org.sg.

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