Technology Transfer Agreement

A technology transfer agreement is like any other IP transfer or license, but has a turning point. A “regular” assignment or license of a patent, copyright, business secret or trademark generally takes into account only the parties. However, technology transfer must recognize external interests. If the federal government funds research, which is a very common practice — the government must retain a licence to use the technology. Similarly, when a university exploits intellectual property, it must take into account the rights of the researcher and others at the university, as they are governed by a policy that the university probably has for all inventions and discoveries. The Indian Competition Commission (ICC), established by the Competition Act 2002, is responsible for prohibiting anti-competitive agreements that have or may have significant negative effects on competition in markets and also prohibits abuse of dominant position by firms. The holder of the technology has the right to limit the violation of one of its rights or to establish appropriate conditions that are only necessary to protect one of its intellectual property rights (section 3, paragraph 5, points a) to f), of the Competition Act 2002). Technology transfer agreements beyond these market share thresholds cannot be considered to fall within the scope of Article 101, paragraph 1, of the Treaty. For example, exclusive licensing agreements between non-competing companies often fall outside the scope of Article 101, paragraph 1. Nor can it be considered that technology transfer agreements within the scope of Article 101, paragraph 1, do not meet the exemption requirements beyond these market share thresholds. However, they cannot be considered to generally provide objective benefits of a large nature and size to compensate for the disadvantages they cause for competition. In order to strengthen the monitoring of parallel networks of technology transfer agreements with similar restrictive effects and covering more than 50% of a given market, the Commission may, by regulation, declare this regulation unenforceable to technology transfer agreements that contain specific restrictions on the relevant market, thereby restoring the full application of Article 101 of the Treaty to such agreements.

Of course, most companies are not independently established or contracts are used to create all the technology in their operation and management. Technology transfer agreements therefore play an essential role in the efficient operation of businesses in all sectors. In some cases, the technology is licensed.