Transferring Technology And Licensing

Overview:

The process through which knowledge or information pertaining to technological features is shared within a group or between organizations or entities is known as technology transfer, sometimes known as technology commercialization and transfer of technology (TOT). Expanding on this, we find international technology transfer, which is the exchange of knowledge between nations. This goes beyond information exchange and includes the transfer of skills, manufacturing techniques, physical assets, know-how, and other technical aspects. As a result, the technology is effectively used and eventually incorporated, contributing to the advancement of innovation and technology.

When considering developing countries, technology transfer helps expand access to technologies related to other developed countries and subsequently helps in approaching toward the newer technologies and inventions, i.e. from developed to developing countries. Technology transfer has been used in the movements of technology from the laboratory to industry or from one application to another domain application.

Patents:

The patent owner retains ownership of the patent and then becomes the source of income by collecting predetermined royalties or as per the agreement, while licensing is the permission given by the patent owner to another individual or organization for using the patented invention on predetermined terms and conditions. Therefore, by combining the concepts of technology transfer and licensing, one can assist in reaping the benefits of prior technological research, as licensing establishes the legal framework for the technology to be transferred to a larger group of researchers and engineers. This will help to reduce the costs associated with conducting research as well as those associated with maintaining facilities or development activities, which will aid in the advancement of previously completed technology.

In the current period of technological growth, a multitude of technologies are emerging, that when combined with one another, gives rise to even more cutting-edge technologies.

Thus, in this case, licensing is crucial because it offers a legal framework for utilizing the combination of technologies developed or discovered by other people or organizations that have already made a product, saving time and money that would have otherwise been wasted on developing the earlier inventions.

Types:

There are two types of technology transfer: vertical technology transfer and horizontal technology transfer.

Vertical transfer is the term used to describe the process of transferring new technologies from programs of research and development into science and technology organizations, for example, to applications in the agricultural and industrial sectors. Alternatively, we can define vertical transfer as the process of transferring technology starting with basic research and moving through applied research, development, and finally production.

Alternatively, horizontal technology transfer refers to the migration of a well-known technology from one equipped setting (a corporation to another) to another, or more specifically, the transfer and application of technology from one location or organization to another.

Advantages:

In the modern era of technological advancement, a person can select any path for technology transfer, depending on the connections between the transferor and the transferee's technological advancement chains. The public benefits from manufactured goods that reach the market, and the availability of jobs that arise from the improvement and sale of these products are among the many benefits associated with technology transfer. Consequently, it promotes the application of developed technology and advances society development through tax revenue, increasing researchers' visibility, enabling them to produce and receive royalties, and ultimately achieving financial goals. 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.

Additionally, leading to the commercialization of the studies and discoveries conducted, which was the outcome of the development and patent-protected investment course. From this point on, all of the investments made during the creation of intellectual property are given back to the general public in the form of public goods, increased employment opportunities, and tax revenue. By spotting new business opportunities and boosting the expertise and competitiveness of technology providers, technology transfer helps the industry grow. This eventually leads to a refocus on the technologies and systems that can serve multiple fields and a broadening of the business area. Furthermore, technology transfer encourages a broader use and understanding of systems and technology.

Technology transfer generates income for both technology donors and recipients, which results in new and improved goods, services, and processes that boost productivity and effectiveness, expand market share, and boost profits. Furthermore, technology transfer facilitates the acquisition of rewards that go above and beyond the standard salary through patents, licenses, and other technology transfer awards. These benefits support the advancement of knowledge and career opportunities through cooperative work with colleagues in the industrial sector.

Disadvantages:

Since technology transfer is eager or intended for business-oriented activities, there may be opportunities for financial or commercial risk going forward. This is because, as we all know, patent applications that are not licensed will only cost money. Institutional tensions may emerge within the organization even in cases where the technology transfer program is successful, particularly after technology transfer. These tensions may arise between those who know they will never make useful inventions and those who receive licensing income.

In order to address those situations, institutional policies can be created with the goal of partially redistributing license income among all research groups.

However, employing this tactic may not solve the issue entirely; instead, discoverers will typically feel irritated or let down when their hard-earned money is distributed to other groups. Institutions should be aware of the potential conflicts of interest that arise from technology transfer activities, particularly when the transfer includes the formation of a spin-off company. Furthermore, the licensee's failure to perform may be the cause of the issue. Additionally, unless future patent enhancements are included in the initial agreement and are unrealistic, the licensee may have limited opportunities beyond the license scope.

Indian scenario:

India's technology sector is booming and has contributed significantly to the nation's overall development and economic expansion. The country has chosen a sensible balance between indigenous and imported technology. From this point forward, "technology transfer" is crucial and usually governed by a technology transfer agreement. Developing nations typically don't take the conventional route for technological advancement; instead, they take advantage of the cutting-edge options currently accessible and apply the necessary tools to make use of this contemporary technology. Since technology transfer is predicated on the benefits of research and development shared with developing and underdeveloped nations, national research laboratories have been built by the Indian government for the purpose of R&D.

Small and medium-sized businesses make up majority of India's business sector, which has been expanding since liberalization. This has led to the rise of multinational corporations, which in turn are competing with foreign businesses, boosting India's confidence. The Indian government is about to open Technology Transfer Offices, Universities, and other establishments that will receive funding from the national government and serve as a means of exporting or transferring research that has been done and its results to the intended location.

However, a few Indian institutes have already begun to commercialize their research and have had success transferring their technologies to industry through licenses. Moreover, a number of renowned institutions in India have observed multiple instances of technology transfer.

Conclusion:

Technology transfer and licensing have been essential to the country's overall development and the introduction of new technologies, both of which support the growth of the national economy.

India must focus on technology development and transfer. It must also develop a building strategy that includes the creation of new offices dedicated to technology transfer and the education of young people about the advantages of technology transfer through the establishment of designated universities and an acceleration of technological research and development from a technical standpoint. After all of the discussion, we can finally say that technology transfer may have both benefits and drawbacks. But in order for both our nation and its citizens to gain from this, we must view it from a wider perspective.

Disclaimer: This article was first published in the S&A Law Offices - 'Intellectual Property (IP-Tech)' newsletter in May 2024.