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Mode, Price and Negotiation of Technology Transfer


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Published in: Education, Business, Technology

Mode, Price and Negotiation of Technology Transfer

  1. 1. Modes, Pricing & Negotiating of Technological Transfer
  2. 2. Modes of Technology Transfer 1. Passive mode – – – 1. Semi-active mode – – – 1. There is no direct communication from originator Self teaching manuals, how-to-do-it guide User collects technology information from third party The role of technology transfer agent to self-education Agent acts as an interpreter or communicator information for new technology Agent will not participate in the application of the technology Active mode – – Technology agents and his team fully involved They act as a bridge in technology transfer from technology source to entrepreneur
  3. 3. Passive mode of transfer Technology Information Semi-active mode of transfer Technology Partial Information Involvement of Agent Active mode of transfer Technology Fully Information Involvement of Agent Users or entrepreneur Originator or Producer of Technology Figures : Modes of Technology Transfer
  4. 4. PRICING OF TECHNOLOGY TRANSFER 1. Lump-sum payment – – – – – 1. Fees (Remuneration) – – – 1. It is desire to acquire technology by outright purchase It reduces the licensor risk It includes all expenditure i.e. R&D, Transfer cost etc.. It is an advance collection of minimum royalties The licensor may not in position to verify license It is the reward for technical and managerial expertise It is included technical fee and management fee Ex: Trainers, Technical Experts, Technical Assistance Royalties (Lease payment) – – – Percentage of sale value, gross value of production ‘25 Percent Rule’, Industry norms, Return on R&D, Return on sales etc Ex : uses of patented equipments or process
  5. 5. PRICE NEGOTIATION OF TRANSFER 1. 2. 3. It is a powerful method of bringing about an agreement between two parties for technology transfer There is no rigid formula for determining the price of IPR and the estimation is vary from case to case Guidelines for negotiation:      The price of IPR normally ranges between 2% to 10% of projected turnover production for a period of 5 years. The price would depend on the estimation of opportunity value and ‘what the market can stand’. The realization of price could be divided between lumpsum amount and recurring royalties payment. Finalizing a specific price depends on the bargaining strength of two parties Both parties will arrive at their ‘reservation price’ by some assessment of the costs and benefit
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