Essentials of Technology Transfer Agreement
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Technology Transfer Agreement having clauses conducive to both licensor and licensee is important and determines how the relationship is going to be in future. This presentation talks about essentials of Technology Transfer Agreement.
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Essentials of Technology Transfer Agreement
- 1. Essentials of Technology Transfer Agreement Bindu Sharma Origiin IP Solutions LLP Email: bindu@origiin.com Phone: 9845693459
- 2. Technology transfer, also called Transfer of Technology (TOT), is the process of transferring technology from a person or organization that owns or holds it to another person or organization.
- 3. • Buyer wants new technology • Seller wants a ecosystem where Buyer can buy, manufacture and market the technology • Win-win for both Buyer and Seller License Assignment Joint Venture Out-License in-License
- 4. What gets transferred? Process Intellectual Property Know-how Techniques
- 7. Exclusive or non-exclusive Agreement In case of exclusive agreement, buyer has exclusive rights on the technology and he can prevent seller also from using its own technology
- 8. Grant of rights Manufacture Market Sell Import Territory
- 10. Royalty
- 11. Audit of accounts Revenue generated Auditing accounts of the buyer
- 13. Governing law This Agreement is governed by and shall be construed in accordance with the laws of India.
- 15. Indemnity • Compensate the buyer for any losses from third- party intellectual property infringement claims resulting from use of the licensed technology. • For damages in the event you breach confidentiality or misuse the product or technology
- 16. Confidentiality • A breach of confidentiality can occur either during the early stage of negotiation or during the duration of the agreement; • The breach could also occur after the expiry of the agreement.
- 17. IP & Know-how Registered or unregistered IP Know how: Practical knowledge or skill or expertise
- 19. Conclusion • Technology Transfer is an exciting time for both buyer and seller of Technology • Since it is long term relationship, having good agreement is important
- 20. info@origiin.com (for IP services) info@origiinipa.com (for IP trainings) Subscribe to our
Editor's Notes
- Hello friends, This video, “ESSENTIALS OF TECHNOLOGY TRANSFTER AGREEMENT” is brought to you by Origiin IP Solutions Bangalore, a leading intellectual property and legal firm in India. My name is Bindu Sharma and I request you to watch this video till the end. Like and share this video and subscribe to our youtube channel so that you don’t miss any further updates from us.
- Lets FIRST understand what technology transfter is. Well Technology transfer, also called Transfer of Technology (TOT), is the process of transferring technology from a person or organization that owns or holds it to another person or organization.
- Technology may be developed by an individual inventor, academic or research institution or industry. And such technology may be transferred to the industry sothat technology can be utilized, brought to the market in order to generate revenue. Part of revenue, generated by the industry is often shared with owner of the technology in the form of Royalty When license to use technology is given to other entity by owner of the technology, technology is said to be out licensed. However when license to use the technology is taken, the technology is said to be in-licensed. There are 3 common modes of technology transfer, i.e., license, where transfer of rights is for a specific period of time, assignment where transfer of technology is done permanently by assigning all rights and joint venture where buyer and seller come together to develop and sell technology.
- Its important to know what gets transferred in technology transfer deals . Well, When a technology is transferred, usually the process, intellectual property like patent, copyright, design etc along with the know –how and techniques gets transferred .
- Broadly speaking, the steps involved in transfer of technology are: Technology validation to make sure that the technology actually is capable of working at pilot or industrial level. Before buying technology, the buyer would like to assess value of the technology. There are specific methods that help in valuation of the technology After right value has been assigned to the technology, its easier to negotiate the terms and conditions of the agreement. And finally execution of the agreement takes please to complete the process of technology transfer..
- Technology Transfer Agreement is executed between seller and buyer of the technology and its usually called technology transfer agreement. This agreement shall be carefully drafted sothat the relationship between the parties works well in the long way…Good agreement is the one which is favorable to both parties.
- Technology transfer agreement is either exclusive or non exclusive. Exclusive agreement is the one where seller grants rights only to one party. The seller of the technology shall define type of the agreement right in the beginning. Please note that in case of exclusive agreement, buyer has exclusive rights on the technology and he can prevent seller also from using its own technology
- Seller is owner of the technology and shall be careful about the rights it Is going to grant the buyer with respect to the technology. Such rights could be…Right to manufacture, market, right to sell,, import the technology Right to manufacture & sell product in a specific territory or the country may also be specified in the agreement.
- In the agreement, since there are 2 parties, the obligations of each party shall be clearly written. As a developer of the technology the seller is thorough with each and every aspect of the technology and shall provide assistance to the buyer to execute the technology. He may be required to impart training to the staff of buyer as well. Obligations of the buyer could be successful execution of the technology followed by putting best efforts to market and sell it. Further, the buyer shall pay royalty to the inventor as agreed mutually
- Royalty is one of the important clauses of a technology transfer agreement. One can be as creative as he wants when it comes to the way royalty shall be paid. Part of it could be paid as down payment whereas rest can be paid as a percentage on profit sharing. Mode of payment, like payment by cheque or Demand draft or wire transction shall also be mentioned in the agreement.
- Like any other relationship, in technology transfer also, its important to have transparency in terms of how the buyer is utilizing technology as well as revenue being generated due to implementation and usage of technology. Its better to have a clause in agreement that gives right to seller of technology to audit accounts of the buyer periodically
- In case any disputes arise between the parties in due course of time, there must be a process to sort it out by mutual discussion. However, there may be option to resolve disputes by arbitration. It is open to the parties to select the procedure and venue of arbitration. If the venue is not in India, but in say Paris or London, the Indian entity must consider the high costs of arbitration and examine the enforceability of the awards in that country.
- A “Governing Law” clause is used in legal agreements where you can declare which rules and laws will govern the agreement if legal issues arise.. It is therefore sensible to state in a contract which set of laws will govern it. Governing law clause usually reads as…This Agreement is governed by and shall be construed in accordance with the laws of [India].
- When buyer starts using the technology, in due course of time, some improvements may come up. Now the question arises that who owns such improvements. Buyer, seller or both of them might agree to jointly own IP on such improvements.
- Indemnity is a very critical clause in any agreement. It is recommended to read and understand this clause carefully. Indemnification Clause typically Protects Both Parties. If you’re the seller of technology, you might agree to compensate the buyer for any losses from third-party intellectual property infringement claims resulting from use of the technology. If you’re the buyer, you might agree to compensate the seller for damages in the event you breach confidentiality or misuse the product or technology.
- Confidentiality is of utmost importance in any technology transfer agreement and particularly in cases where unpatented know-how is involved. A breach of confidentiality can occur either during the early stage of negotiation or during the duration of the agreement; The breach could also occur after the expiry of the agreement. Therefore, the confidentiality provision usually survive the termination of the agreemrnt
- Transfer of IP & Know-how is extremely critical in TT agreements. IP involved in the transaction could be patent, copyright, trademark, design, confidential information or trade secret. And such IP may be registered or unregistered. Know how means Practical knowledge or skill or expertise and it has to be clearly written in the agreement with the extent such know-how would be transferred and how would confidentiality of it ill be maintained.
- Every agreement has a specific term like 5 years or 7 years. However, continued use of technology by the buyer may be a matter of concern post agreement termination. The seller may insist that know-how in the form of documents, equipment, . reverts back to the seller upon termination of the agreement and that the buyer is not permitted the use of know-how. The termination normally does not liberate the buyer from its obligations regarding confidentiality or payment of royalty. Buyer may be permitted to manufacture the product beyond the life of the agreement.
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