Licensing and Transfer of Technology
Licensing and Transfer of Technology The process of sharing of technologies, skills, knowledge, manufacturing methods, and physical assets, etc. among governments and other institutions is called technology transfer. It ensures that technological and scientific developments are available to a large number of users, who can exploit and further develop the transferred technology into new applications, methods, processes, etc.
Technology transfer is an important means through which developing countries gain access to new technologies. Most technology transfers between developed and developing countries happen through commercial technology transfers by the private sector.
Licensing, on the other hand, is the permission granted by the patent holder to another person or entity for use of the patented technology on terms and conditions agreed upon by both parties. The patent holder continues to retain the patent and earns income in the form of predetermined royalties or according to the terms and conditions agreed upon. INSIDER TRADING
Thus, the transfer of technology in combination with licensing allows for the advancement of technology. Licensing provides a permissible structure for the transfer of technology to a wider group of researchers and engineers, thereby diffusing the expenditure of further research and the costs incurred in ongoing development activities and facilities for the same.
Many technological developments happen by combining pre-existing technologies that lead to new inventions and newer ways of doing things. Licensing provides the legal framework to make technologies available to a wider body of researchers in this regard. It also ensures the commercialization of new technologies.
In developed countries such as the United States, market forces, Intellectual Property laws and federal commitment make sure that new developments in the technological field are licensed to existing and new businesses for development and commercialization. Research institutes and universities that come up with new technological inventions better understand the importance of technology transfer and have adopted various approaches to implementing it to their advantage.
In Germany, the research and development system involves minimum governmental interference, making use of inherent technological strengths and the stratification of research areas. All this provides the right environment for commercialization of technology and technological development. On the other hand, technology transfer scenario in India has not been encouraging despite government efforts. There are numerous reasons for this:
- Minimal private sector involvement in research and development support programs
- Public institutions that lack in policy and decision-making ability
- Inflexible bureaucratic resource allocation procedures
- Preference is given to a conservative and safe approach as opposed to high-risk ventures
- Lack of monitoring, accountability and utilization of fiscal incentives by the industry and private sector
Technology transfers benefit society through the commercialization of technology and the consequent job creation. New technology benefits the public and the licensing and the consequent economic gains encourage further research and development activities. Technology transfers also strengthen the industry by identifying new business opportunities that aid the advancement of expertise and competitiveness of the technology providers. It broadens the scope of businesses and results in the re-focusing of technology and systems to serve different fields. Ultimately, technology transfers promote the wider use and awareness of technology and systems.