The Role of Patents in Technology Transfer

By Bindu Sharma, CEO & Founder, Origiin IP

Technology transfer in simple words means a process wherein owner of the technology transfers its skills, knowledge, and know-how to another party. In return owner of the technology often gets royalty which is determined based on various parameters, such as, market value of the technology, the effort needed to implement technology and initial investment etc. However one of the extremely important parameter that is to be taken into consideration is whether the technology has legal protection in the form of patent or not, though there might be possibility of protection in the form of trademark, copyright, design as well.

If worked out well, technology transfer is an extremely effective way to commercialize the patented invention. It plays an important role as a catalyst for the further development of technology and patents play a very vital role in case of technology transfer because patent is one of the best ways to protect a technology. Technology transferred without even filed for a patent is a very risky affair. At least a patent application for the technology should have been filed before negotiating on technology transfer for the reason that after grant of the patent, the certificate obtained from the patent office serves as a proof of ownership. A Patent also confers certain statutory rights to the patent holder that the technology transfer process.

Technology transfer happens by means of executing an agreement between owner of technology or Patentee and the buyer. Practically speaking, taking a patent to the level of technology transfer is a very big challenge where strength and value of the patent shall be assessed vigilantly and at the same time it is important for the patent holder to examine capacity of the buyer to manufacture, market and sell his patented invention. Technology transfer is beneficial to the patentee because he gets a channel to commercialize his invention and still have ownership of the patent with him. For the buyer, getting access to patented technology can give him cutting edge over his competitors.

Though the process of technology transfer is not as simple as it sounds, there are various success stories. As reported by The Chronicle of Higher Education, in academic research in the 2011 fiscal year, Northwestern University earned the most of any institution reporting, with more than $191-million in licensing income. The revenue mainly came from the invention related to new breeds of wheat, a new drug for the treatment of HIV, and from longstanding arrangements over enduring products like Gatorade.

Having a patent is one of the essential pre-requisites before transfer of technology though there are several other factors that determine fate of the invention to be commercialized by means of technology transfer. Well negotiated agreement between patentee and buyer can lead to a real profitable and symbiotic relationship.

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