A buy-back contract is a form of agreement between developing countries and large foreign companies. Under this agreement, a foreign company supplies industrial equipment in exchange for profits derived from the sale of raw materials or goods produced on this equipment. This kind of technology transfer is often used in the construction of new plants in the developing countries. In that case the state becomes a shareholder in the created enterprise.
The process of making a product, process, service, or other resource available to a wider market.
A legal right granting limited exclusionary rights to the creator of an original work for its use and distribution. Copyrightable works may include books, software, music, choreography, movies, architectural designs, and more.
Direct Foreign Investments
Direct foreign investments are one of the main methods of technology transfer at the state level. Generally, a foreign company invests in developing countries in order to create a new market, remove export barriers and get an access to cheap labour.
- The distribution of information describing an invention. Disclosure may occur in writing, via oral communication, through demonstrations, or by some other means.
- Part of a formal process (often through an institutional office such as a technology transfer or patent office) through which an inventor shares details about his or her invention. Patent disclosures typically must contain sufficient detail to allow someone who is “skilled in the art” to make or use the described invention.
Equipment Acquisition is a simple and, therefore, one of the most common methods of technology transfer. The main disadvantage of this method is the fact that the company limits itself to mere technical knowledge incorporated in the equipment and does not get any new competences in the management and production. Moreover, equipment available on the market does not give unique privilege to the buyer, as this equipment may be purchased by any other competitor.
Foreign Company Acquisition
A company may acquire a foreign startup which is developing a new technology. As a result, the company will not only get the technology, but also a team capable to develop it in the future. Moreover, the acquisition of a foreign firm automatically places the company on the new international market.
Franchising is an agreement where one company grants to another the right to use its trademark and business model. The buyer of the franchise starts manufacturing and selling the goods according to the seller’s specification. Normally, the company owner of a trademark also shares its experience in operating and managing the franchised product/technology.
Intellectual Property (IP)
Tangible or intangible products/outcomes of University-based scholarship, research, development, teaching, or other intellectual activity. IP may include patents, copyrights, copyrightable works, trademarks, inventions, data, classroom instructional materials, creative works, and web- or electronic-based research and instructional materials, among other things.
A joint venture is an agreement concluded between two or more companies in order to execute a particular business. The joint venture implies mutual assets, management, risks, profit sharing, co-production, services and marketing.
A legal instrument conferring the right to make, use, and sell a product or service utilizing protected intellectual property. A licensee is an entity which has obtained the legal right to use protected intellectual property
Technology can be transferred through a competent expert, who could be “entice” from another company.
This method of technology transfers involves minimum costs. But, generally, it can be effective only for small projects with relatively simple technology. Furthermore, technology should not be patented.
Materials Transfer Agreement
Contract governing inter-organizational transfer of tangible research materials, where it is the intent of the recipient of such materials to use them for research purposes.
Original equipment manufacturer (OEM)
OEM can be considered as a form of subcontracting, where a local firm starts manufacturing according to the foreign company specifications.
A foreign company transfers a part of its technologies and equipment. It conducts training and management reorganization. Afterwards, the foreign company sells produced goods through its own channels and under its own trademark.
A legal instrument granting a property right to an inventor. Patents typically give the inventor the right to prevent competitors from making, using, marketing, or selling their invention for a period of time.
Payment made to the legal owner of a patent, copyright, or other property for its use. Royalties are commonly structured as a percentage of revenues generated from products or activities pertaining to the property, although they can also consist of lump-sum payments or other forms of compensation.
A strategic alliance agreement is usually concluded between two or more big companies in order to use specific skills of each of them in the development of new innovative technologies. Strategic alliance could be in form of joint laboratories, research programs, production and promotion of a new product.
According to this agreement, the technology owner participates in the technology implementation, providing at each stage of the transfer technical support, as well as personnel training.
The involvement of technology developer in the technology transfer process ensures a closer cooperation between two parties which favors a complete transfer of all knowledge and skills related to the technology. In this way, the support contract may be a part of the licensing agreement, in order to improve the transfer efficiency.
A practice, process, or recipe that is unknown to those outside a company. Companies must take reasonable precautions to conceal trade secret information. Legal protections are typically limited to non-disclosure or non-compete agreements with employees or other partners. Trade secrets may be attractive intellectual property options if an invention will be relevant for longer than the term of a patent (for example, Coca Cola), if disclosure would enable competitors to engineer functionally equivalent solutions that do not explicitly violate IP rights (often the case in software), or if the innovation is not patentable.
In case of a turnkey agreement, the general contractor is responsible for all the procedures related to technology transfer, such as technology design, financing, equipment supply, construction and commissioning.