It’s really mind-bending to consider human development in relation to the passage of time. If the Earth was only 24 hours old, modern humans have been around since 23:59:59 – for just one second of time. Despite this relatively short stint on Earth, human technological progress has been incredible.

Modern technology has paved the way for multi-functional devices like the smartwatch and the smartphone. Computers are now more powerful, portable, and faster than before. Technology has improved, sped up, and simplified our lives with all of these revolutions.

The first question that arises is what do we mean by the term “technology”? Technology, in the simplest terms, can be defined as “the medium of transforming an idea into reality”. It entails the application of knowledge to reach specific goals in the most efficient and reproducible manner. Technology is instrumental in the evolution of mankind by resolving challenges faced by mankind.

The technology once developed can be transferred for multiple reasons such as to increase production, reach new customers, reduce costs, develop customized products or services, gain competitive advantage, and enable global collaboration, etc.

The phrase “technology transfer” refers to the process of technology moving from one entity or country to another. The transfer is considered successful if the receiving entity, the transferee, can successfully use and eventually integrate the technology transmitted with or without customization. Physical assets, know-how, and technical expertise including design, drawings, and IPR rights may all be included in the transfer.

Another question that arises is why it is necessary to transfer technology. The answer to this question lies in the fact that the fundamental growth of civilization became possible because we learned to share, transfer and benefit from each other’s experience and knowledge, were it not for this, each of us would have individually learned that fire burns by touching it or, to put it another way, we would still be Neanderthals today.

Technology transfer helps develop the early-stage intellectual property into tools for direct use by the research community, or into bases for new platforms, products, or services to be made into products for mass use. The ultimate beneficiary of technology transfer is the general public, who benefits from both the products that reach the market and the job creation which results from the research, development, production, sale and support services, etc.

Technology can be transferred in vertical and horizontal manner –

  • Vertical transfer refers to the transfer of technology commencing from basic research to applied research, from applied research to development followed by development to production.
  • While horizontal technology transfer is the movement of a well-known technology from one equipped environment to another (from one company to another).

An overview of Technology Transfer in India:

STEP-WISE ELABORATION OF TECHNOLOGY TRANSFER

The first and foremost step for the transfer of technology is the granting of license and rights for the technology to the transferee. It involves the transfer of one or more intellectual property rights from one party to another, usually for a fee. The license agreement should contain all the necessary details regarding the IPR rights being transferred, the conditions of the transfer, and other terms and conditions.

The parties involved in the transfer must also enter into a confidentiality agreement to ensure that the technology remains confidential and is not disclosed to any third party.

The next step is the development of the Proof-of-Concept (PoC) projects, which are small-scale projects that demonstrate the feasibility of a technology concept or prototype.  In India, the use of PoCs has become increasingly popular as the country strives to become an innovation hub. PoCs are a great way for start-ups and entrepreneurs to prove their ideas and show that their products or services can deliver tangible value to customers. In addition, companies in India have started to use PoCs to assess the potential of emerging technologies such as artificial intelligence, machine learning, blockchain, and the Internet of Things. This helps them understand the potential benefits and risks of investing in such technologies, as well as gauge their readiness for deployment.

Another important aspect of technology Transfer is the continuous Research & Development (R&D) of the technology so as to cater to all future updates and new challenges. Sometimes it is implicit in the technology transfer agreement to carry out the continuous R&D and may also need to customise the same for conditions adaptable to location, consumer or specific needs or regulations of a particular country. The technology transfer agreement in such envisages setting up of R&D base for such enhancements. Legallands has requisite expertise in incorporating such clauses in the technology transfer agreements and license agreements for setting up of R&D centres.

The major aspect of technology transfer is the setting up of production plants or operations unit. The setting up manufacturing base is the most critical aspect of technology transfer as through this process the end result in the form of a product or service takes shape for the ultimate consumer or industrial requirements. The technology transfer agreement specifies the requirements of plant layout, the area required, location, plant & machinery required, equipment selection, product environment, infrastructure conditions, raw materials and components specifications (BOM), packaging requirements and quality, storage & delivery instructions and many such aspects of production, planning etc. We at LEGALLANDS have dealt with many such arrangements where the technology transfer includes these requirements of production plant setup.

The real test of technology is the quality of the product or service which the ultimate consumer is going to get. Accordingly, quality checks are important steps in the entire process of transferring a Technology for the manufacturing of product or various processes from one company to another. During the technology transfer process, the receiving company must ensure that the technology is properly received, understood, and implemented. Quality checks are then performed to ensure that the technology is functioning correctly and meets the requirements of the receiving company. Quality checks may involve testing the technology in various environments, verifying that the technology functions correctly and meets the requirements of the receiving company, and performing any necessary maintenance and repairs. Quality checks also involve ensuring that the technology is properly documented and that the necessary training is provided to ensure proper use of the technology. The various check and controls at different process level ensures the ultimate quality of the product or services.

The last but not the least step in the process of technology transfer is the arrangements for the sales and marketing of the product or service which can be defined in the technology transfer agreements and separately through various sales arrangements such as joint collaboration, buy back agreement, and exclusive rights of the transferee. Companies may also offer after-sales services such as maintenance and repair, as well as upgrades and enhancements. Legallands has the expertise to guide its clients on various aspects of technology transfer and takes care of their interest.

It is since ages that India has been a leader in technological development, promotion, and transfer to other countries. To keep its distinct nature the Indian government has established several programs to promote technology transfer in India, including the Technology Transfer Promotion Programme (TTPP). This program was established in 2008 to facilitate and promote the transfer of technology from the public and private research and development (R&D) institutions to industry and other users.

The Technology Transfer Promotion Programme (TTPP) provides a platform for public and private research institutions to collaborate with industry partners in the development of new products and technologies. It also provides incentives to industry partners to invest in new technologies and to encourage the development of new products and services.

Under the Technology Transfer and Commercialization Rules, 2020 (TTCR), technology transfer can be done through various means such as licensing, joint ventures, technology transfer agreements, and the like.

The process of technology transfer in India is regulated by the Indian Patent Office. The patent office reviews the application and provides the patent applicant with an examination report. The report includes an analysis of the patentability of the invention, any prior art, and other information related to the invention. The patent office also provides guidance on the best practices for technology transfer in India.

The Make in India initiative, launched by the Government of India in September 2014, is a major policy-driven initiative to encourage companies, both domestic and foreign, to manufacture their products in India. The initiative is aimed at making India a global manufacturing hub and providing job opportunities to millions of Indians.

Under the initiative, the government has encouraged foreign firms to set up production facilities in India and to transfer technology to Indian companies. The initiative also seeks to create an enabling ecosystem for technology transfer, including increasing the availability of venture capital and other sources of financing, improving the regulatory and legal environment, and improving the availability of skilled workers.

The initiative has resulted in several investments by foreign companies in India, with many of them looking to set up manufacturing facilities and transfer technology to Indian companies. Companies such as Foxconn, Microsoft, Samsung, and Apple have all set up manufacturing facilities in India and have transferred technology to Indian companies. Additionally, many small and medium-sized enterprises (SMEs) have also benefited from the Make in India initiative by gaining access to technology and resources that were previously unavailable to them.

The Government of India has offered many incentives for Make in India initiative for technology transfer such as:

  1. Tax Incentives: Tax exemptions for the transfer of technology and certain profits related to technology transfer, including profits from registered international transactions.
  2. Financial Incentives: Government subsidies and loans for domestic companies to invest in technology transfer projects, including foreign technology.
  3. Regulatory Incentives: Streamlined regulations and procedures for technology transfer and foreign direct investment in India.
  4. Intellectual Property Rights Protection: Strengthened laws and enforcement for the protection of intellectual property rights, including patents, trademarks, and copyrights.
  5. Training and Education: Educational programs and incentives for domestic companies to develop skills and knowledge in technology transfer activities.
  6. Research and Development: Government funding and incentives for technology transfer-related research and development activities.

Thus, India is on the cusp of a technology revolution and the transfer of technology through a variety of channels is essential in order to unlock the potential of its economy. Although India has made tremendous progress in the adoption of modern technologies, there is still much to be done to improve the rate of technology transfer. The government must create an enabling environment for the development of open markets and the flow of resources between India and the rest of the world. Policies to support the growth of Digitalisation in India, increased investment in R&D, and the promotion of global partnerships will help India to become a leader in technology transfer. With the right focus and effort, India has the potential to be a major player in the global technology industry.

LEGALLANDS has the requisite experience and skills and has been instrumental in such transfer of technology in various sectors, such as Healthcare, Infrastructure, Information Technology, etc. Our Expert professional team can study, interpret, research strategies, negotiate, formulate, and draft contracts involved in the process of technology transfer.

Thanks & Best Regards,
RAJIV TULI
LEGALLANDS
E. [email protected], W. www.legallands.com

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