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For third yr Mech students of VIT

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  • Students will have a full-size version of this slide in the Resources section of their binders. Do not go over slide in detail, just the principles. This is an illustration of the typical steps to complete technology transfer. Names and definitions will vary from corporation to corporation. Input items (left ) ,Output ( center ) and Functional action ( right ) principles will remain.
  • IPRVIT 4

    2. 2. <ul><li>UNIT IV </li></ul><ul><li>Creating Wealth out of Knowledge </li></ul><ul><li>- Technology Transfer </li></ul><ul><li>- types </li></ul><ul><li>- issues </li></ul>
    3. 3. Technology transfer <ul><li>T echnology transfer is the process by which basic science research and fundamental discoveries are developed into practical and commercially relevant applications and products. </li></ul>
    4. 4. Tech. Transfer <ul><li>The countries which have well established Research and Development (R&D) dominate in the sphere of patents. In recent times, marked by liberalization and privatization, transnational corporations have become major forces of R&D. </li></ul><ul><li>Technology transfer is implemented at two levels, at the government level between the states and at the private level between transnational corporations. </li></ul>
    5. 5. Technology types <ul><li>A n Emerging Technology is an innovative technology that currently is undergoing bench-scale testing, in which a small version of the technology is tested in a laboratory. An </li></ul><ul><li>Innovative Technology is a technology that has been field-tested and applied to a problem at a site, but lacks a long history of full-scale use. Information about its cost and how well it works may be insufficient to support prediction of its performance under a wide variety of operating conditions. </li></ul><ul><li>An Established Technology is a technology for which cost and performance information is readily available. Only after a technology has been used at many different sites and the results fully documented is that technology considered established. </li></ul>
    6. 6. Modes of technology transfer <ul><li>There are different modes of technology transfer existing in the current international system. </li></ul><ul><ul><li>They include foreign direct investment, licensing and joint ventures that involve the transfer of equipment and materials, skilled manpower, know-how and organizational innovations. </li></ul></ul><ul><ul><li>Other prominent modes of technology transfer include franchising, design and drawing, management contract, marketing contracts technical service contracts, turnkey contracts and international sub-contracting. </li></ul></ul>
    7. 7. Issues in Technology Transfer <ul><li>Some  of  the  problems  faced  by  the  Indian organizations in technology transfer are diverse in nature. Few of them are illustrated hereunder: </li></ul><ul><li>1.    Non-patented technology : </li></ul><ul><li>Non-patented technologies form a major chunk of technology transfer agreement around the globe, especially in the United States and Japan. </li></ul><ul><li>But when such non-patented technology is to be transferred, it creates complex problems of scope, duration and termination. </li></ul><ul><li>If the technology is patented, the transferee pays royalty only for the life of such patent (i.e. 20 years). Whereas, if such technology is non-patented, transferee would have to pay royalty for more than 20 years (since the technology would have no expiry or protection terms). </li></ul>
    8. 8. <ul><li>2.    Black Box problem: </li></ul><ul><li>The second threshold problem is that of maintenance of secrecy during negotiation of such non-patented technology. The buyer of technology is not interested to pay unless he knows what exactly he is paying for and the seller is not interested to disclose his non-patented technology unless he receives payment. This is the so-called ‘black box” problem faced. </li></ul>
    9. 9. <ul><li>3. Strategic importance of Trade secret: </li></ul><ul><li>The Black box problem arise because the owner of such non-patented technology prefers not to file for patent protection. Why the owner of such technology does not file for patent protection is a strategic business decision. Patent provides protection for 20 years while trade secret can be protected indefinitely. Thus, there may be a clear incentive for the owner of such technology to not avail patent protection. For illustration, Coca Cola is a trade secret formula, which was strategically not patented but kept as a confidential trade secret. Thus, when the technology is a trade secret, it creates even further problems </li></ul>
    10. 10. <ul><li>4. Patenting products in India: </li></ul><ul><ul><ul><li>Another major problem in the area of technology transfer is that the Indian Patents Act 1970 recognizes only process patents and not product patents. </li></ul></ul></ul><ul><ul><ul><li>This loophole resulted in problems for the industries, which are based on reverse engineering. Even though IT, biotechnology, Nano technology etc are some of the fast-growing areas, its growth is hampered by patent uncertainty . </li></ul></ul></ul><ul><ul><ul><li>Similarly, when an institution owns such technology patents, it cannot patent it in India creating problems in transfer and policing of such technology. </li></ul></ul></ul>
    11. 11. <ul><li>5. Technical problem in Evaluation of technology: </li></ul><ul><li>The organizations in India face a unique problem of evaluation of the technology. The so-called black box problems present us with a problem of evaluation. </li></ul><ul><li>Unless the organizations know what they are buying, they may not be able to evaluate the economic feasibility of the technology. This may lead the organizations to either underestimate or overestimate the economics of such technology creating a business blunder. </li></ul><ul><li>Furthermore, what are the mechanisms available for a non-profit organization to evaluate technology it wishes to buy? Evaluating the economics of technology is a difficult job for a non-profit organization if it has no such business background </li></ul>
    12. 12. <ul><li>6. Absence of Technology Transfer Center: </li></ul><ul><li>The Indian organizations need Technology Transfer Center on the basis of National Technology Transfer Center (NTTC) in the United States. </li></ul><ul><li>NTTC is a full-service technology-management center, providing access to federal technology information, knowledge management and digital learning services, technology assessment, technology marketing, assistance in finding strategic partners, and electronic-business development services. </li></ul><ul><li>The NTTC fosters relationships with national clients, showcases technologies and facilitates partnerships between clients and industry. </li></ul>
    13. 13. Role of Technology Transfer in Economic Development <ul><ul><li> Increase in physical stock of productive and innovative resources </li></ul></ul><ul><ul><li> Further exploitation of economical resources </li></ul></ul><ul><ul><li>- natural resources </li></ul></ul><ul><ul><li>- manpower </li></ul></ul><ul><ul><li>- innovation </li></ul></ul><ul><ul><li>- physical resources </li></ul></ul><ul><ul><li> Productivity increase </li></ul></ul><ul><ul><li>- labour </li></ul></ul><ul><ul><li>- capital </li></ul></ul><ul><ul><li>- natural resources </li></ul></ul><ul><ul><li>- innovation capacity </li></ul></ul>
    14. 14. Why are you Transferring Technology? <ul><li>Optimize Intellectual Assets return </li></ul><ul><li>Optimize R&D resources </li></ul><ul><li>Take Strategic decision </li></ul><ul><li>Establish standards </li></ul><ul><li>Entering or exiting a business </li></ul><ul><li>Freedom of action </li></ul><ul><li>As Compulsory license </li></ul><ul><li>Protect a business position </li></ul>
    15. 15. Technology Transfer Process Steps <ul><li>Input </li></ul><ul><li> Need identification </li></ul><ul><li> Sourcing </li></ul><ul><li> Assessment </li></ul><ul><li> Negotiation </li></ul><ul><li> Financing </li></ul><ul><li> Transfer of Technology </li></ul><ul><li> Implementation </li></ul><ul><li> Termination </li></ul><ul><li>Output </li></ul><ul><li>Invention </li></ul><ul><li>Secrecy agreement </li></ul><ul><li>Option agreement </li></ul><ul><li>Agreement </li></ul><ul><li>Management approval </li></ul><ul><li>Review of documents, Intellectual Property </li></ul><ul><li>Amendment - Royalty reports </li></ul>
    16. 16. Types of Agreements involved in Technology Transfer  Preliminary agreements  IP rights agreements  Developments and collaboration agreements  Implementation agreements
    17. 17. General Principles of Agreements <ul><li> Take the business perspective </li></ul><ul><li> Define the issues </li></ul><ul><li>Prepare before you negotiate </li></ul><ul><li>Communications internal & external </li></ul><ul><li> Negotiate before you draft </li></ul><ul><li> Use a mirror </li></ul><ul><li> Plan before you sign </li></ul><ul><li> Use appropriate resources when needed </li></ul><ul><li> Be flexible and fair </li></ul><ul><li> Take your time </li></ul>
    18. 18. The WIN-WIN Approach (Principled negotiation)  Contract should be correct, fair and balanced  Play role reversal  What could reasonably go wrong  Minimize litigation potential  Establish close post agreement cooperation Contract is only as good as the parties are willing to implement it
    19. 19. Technology Transfer Steps <ul><li> Identify and define technology </li></ul><ul><li> Evaluate potential </li></ul><ul><li> Identify targets </li></ul><ul><li> Plan and prepare approach to targets </li></ul><ul><li> Negotiate the agreement </li></ul><ul><li> Transfer the technology </li></ul><ul><li> Monitor the license </li></ul><ul><li> Terminate the deal </li></ul>
    20. 20. Grant and Exclusivity <ul><li>Scope and Field of use </li></ul><ul><li>Exclusivity </li></ul><ul><li>Exclusive </li></ul><ul><li>Non exclusive </li></ul><ul><li>Rights of licensor </li></ul>
    21. 21. Commercial Considerations  Terms - Running royalties, if any - Minimums - Down-payments/milestones/installments/ options (creditable or not) - Basis of computation of payment calculations ( net sales , volume) - Penalties and effects for late or insufficient payment
    22. 22. General Commercial Terms  Duration - Limited - Life of patent(s) - Multiple countries - Know-how - Restrictions by US European Union/ Govt/ any country  Scope - Territory - Quantity - Make, have made, use, sell
    23. 23. Valuing The Technology <ul><li> Costs </li></ul><ul><ul><li>- Avoidance </li></ul></ul><ul><ul><li>- Development </li></ul></ul><ul><li> Market </li></ul><ul><ul><li>- Comparables </li></ul></ul><ul><li> Benefit </li></ul><ul><li> - Share of future benefits </li></ul><ul><li> - Avoidance of payments </li></ul>
    24. 24. Technical and Engineering Assistance  Scope  Cost  Duration  Training issues  Liabilities and performance guarantees  Personnel
    25. 25. Tech Transfer Strategic Process Criteria Strategic Fit Competitive Intelligence (Gap Analysis) Due Diligence Negotiations Final Due Diligence Integration Initial Review Opportunity Corporate Development R & D Marketing Approval to Proceed External Partner Confidentiality Agreement Business Development Management Approval Business, Corporate, Legal Stakeholder Review & Approval Tech Transfer Team Contract Signing Implementation Team Corporate Development Internal Opportunity Assessment External Fact Finding Assessment Letter of Interest Contract Tech Transfer Monitoring Objectives
    26. 26. ADVANTAGES <ul><li>If the IP has good success potential, then this is a profitable way to go </li></ul><ul><li>DISADVANTAGES </li></ul><ul><li>Without the right research, you may be giving away the future and profits </li></ul>