October, 2009

Technology Transfer is an important issue in the field of Intellectual Property Rights. There is often a Technology Transfer Office (TTO) attached to the research institutions or the Universities which deal with the Technology Transfer and act as a bridge between the research Institutions which are engaged in the inventions and the industries which are ready for making investments in such inventions and Technologies. Technology Transfer broadly means purchase of Technology either from the foreign market or from the domestic market in exchange of payment in the form of royalty or one-time upfront payment for the license to use such technology on exclusive or non-exclusive basis. In India, the Reserve Bank of India has prescribed certain restrictions on the payment of royalty in its policy for foreign technology agreements which allows such payments under automatic route and also through approval granted by the Project Approval Board on the applications made to the Secretary for Industrial Approval, Ministry of Commerce, Government of India.

The guideline for automatic approval for Foreign Technology Collaboration Agreements prescribe for a lump sum payment not exceeding US$ 2 Million and the payment of royalty limited to 5% for domestic sales and 8% for export sales over 10 year period. Payment for royalty up to 2% for export sales and 1% for domestic sales is also allowed under automatic route for use of Trademark or Brand name without Technology Transfer.

The Government of India is concerned about huge foreign exchange outgo on account of foreign Technology Transfer and also for unutilized Inventions pending commercialization with the publicly funded research institutions. In 1980, the United States Government had passed the "Bayh Dole Act, 1980" for effective commercial use of the Technology in the research institutions which are funded by the Federal Government. A similar step is now being undertaken by Government of India by placing a bill "The Protection and Utilisation of Public Funded Intellectual Property Bill" in the Rajya Sabha on 3rd Dec, 2008 and is seeking public opinion on the same for effective commercial use of Intellectual Property being developed by the Research Institutions like CSIR, IIT's and others. The bill provides for sharing of royalty being 30% to the creator of the Intellectual Property. At present the Ministry of Science & Technology regulates the technology transfer through a guideline in the form of "Instructions for Technology Transfer and Intellectual Properties" which prescribe for the share of the inventor up to one-third of the actual earnings generated through IPR's by the Research Institutions. It also provides for creation of a patent facilitation fund by setting apart not less than 25% of the revenue generated from IPRs under the supervision of Technology Transfer, Forecasting and Assessment Council (TIFAC). This bill is likely to generate good amount of revenue to publicly funded institutions and also help technology transfer to industries.

ITAG is the premiere organization in the country to deal with the issues on Technology Transfer as a link between the Research Institutions and the industry to bridge the invention-investor gap. It implements it through its various arms engaged in IP Broking, IP Auction, IP Licensing and IP Commercialisation through its expert team engaged in IP valuation and IP Due Diligence for an effective and smooth transfer of technology within and outside the country.

--Dr. D. R. Agarwal