This document discusses intellectual property rights (IPRs) and technology transfer. It begins by outlining the objectives of understanding the intangible nature of IPRs, appreciating how IPRs provide competitive advantages, and gaining an overview of the legal bases for technology transfer. It then discusses several topics in more detail, including the economic and social rationales for IPRs, how IPRs contribute to intangible assets like reputation and brand value, pressures in enforcing IPRs globally, managing intellectual capital and assets, types of offshore collaboration, legal aspects of technology transfer, risks involved, and frameworks for regulating international transfer of technology and publicly funded technology.

1. Prof. Anil B. Suraj
April 2011

2. Session Objectives
 To understand the “intangibility” of IPRs
 To appreciate the value of protected IP
in gaining competitive advantage
 To gain an overview of the legal bases
for an effective process of technology
transfer

3. IPRs – General Bases
 Economic (and technological) rationale
– aids overall development
 Social benefits – enriches the Public
Domain and Basic Research
 Legal monopoly – towards fair regulation
within the territory

4. The “Intangibles”
 Goodwill, reputation and Consumer perception
 Brand value and intuitive know-how
 Scientific, industrial and literary acclaim
 Stronger balance sheets – short and long-term
 Advertising reach and media coverage
 Traditional usage and “prominence” enjoyed
 Each form of IPR leads into the other!Each form of IPR leads into the other!

5. Pressures of
Enforcement
 IPRs and Global recognition
IPRs are territorial in nature
No single authority or uniform standards
National systems and interests continue to
preside
 IPRs = fiercely competitive usage;
justifies criminal remedies too –
Copyrights and TMs violations

6. Intellectual capital &
assets
Key Principles:
 Aggressive pursuit of IP protection –
internal and external
 Visibility and full exploitation
 Role of Intellectual assets in business
alliances and joint ventures
 Inorganic growth directions
 “Innovation market” analysis – concentration
and pulls of Competition law
 Research clusters – high potential + competitive

7. Intellectual assets …
Key Issues:
 Working with the incentive structure –
taxation and attribution issues
 Identifying the key geographical areas –
for marketing and registration of IPRs
 Study the level of innovative behaviour
among the competitors; and suppliers

8. Offshore Collaboration
 Typically of three types:
Captive entity – wholly owned subsidiary – IP is
usually fully owned by Parent
Joint venture – a new combined company – IP is
based on the Shareholding Agreement
○ BOT/BOOT/BOOST Model – involves transition risks
Contracting – with a local entity – enforcement with
due diligence – e.g., Confidentiality; Parent-
subsidiary relations
 Determining factors = cost, commitment,
control, flexibility and liability models

9. Legalese of Tech
Transfer
 “Technology” = wide ambit including
operational know-how
Mutuality, Exclusivity, and Adaptability
 Mode = licensing based on contracts
Contract enforcement index
JVs; Tech assistance; Project Management; PPPs
 Defined outcomes = products and trade
Fine balancing strategy required – between being
restrictive and allowing direct competition

10. Legal and IP risks
 Sharing regime + sustained ownership
 Disparities in applicable laws & IP rights
Concerns of the legal system’s maturity
 Identify, define and document –
processes and products
 Due diligence & IP Valuation

11. Risks …
 Enforcement across borders – relies heavily
on the commitment of the local entity involved
 Employer-employee relations – towards a
framework of trusteeship
 Data protection and security – lack of uniform
standards across regions and sectors
 Dispute settlement and arbitral enforcement
Cross-border Investment related matters

12. International framework
 Investment and related processes are left
unregulated
 Competition Law and its implementation – major issues
 Political interests trump business reasons!
 Concerted efforts required – PPP mode?
 UN International Code of Conduct on the Transfer of
Technology (drafted in the 1970s)
 Premised on need for equitable grounds between nations
of varying economic strengths
 Technology transfer must be facilitated by an
international mechanism regulating the dimensions
of commercialization and licensed perpetuation

13. Transfer of Public
funded Technology
 The Protection and Utilisation of Public
Funded Intellectual Property, Bill (2008)
Instructions for Technology Transfer and
Intellectual Properties – 1/3rd Royalty sharing
 University and Small Business Patent
Procedures Act (Bayh-Dole), 1980 – USA
Permits universities, not-for-profits, and small
businesses to obtain title to inventions developed
with governmental support
Allows government-owned, government-operated
laboratories to grant exclusive licenses to patents

14. Public funded …
 Federal Technology Transfer Act of 1986
 Provides for exchanging GOGO laboratory personnel, services, and
equipment with their research partners
 Makes it possible to grant and waive rights to GOGO laboratory
inventions and intellectual property
 Allows laboratories to make advance agreements with large and small
companies on title and license to inventions resulting from Cooperative
R&D Agreements (CRDAs) with government laboratories
 The National Technology Transfer and Advancement
Act, 1995
 Makes it easier for businesses to obtain exclusive licenses to technology
and inventions that result from cooperative research with the Federal
government
 The Act made a direct impact on the development of new industrial and
technology standards by requiring that all Federal agencies use privately
developed standards

15. Emerging issues
 Licensing in IPRs
Emerging trends in global supply chain
Minimum level of “reasonable control” – as
evidenced in Contracts and practices
Raises anti-trust and RTP claims as well
 Securitization of IPRs
Methods of valuation and their accuracy
Procedure of affirming “secured interest”

16. absuraj@iimb.ernet.in