TECHNOLOGY TRANSFER AGREEMENTS; TRANSACTIONAL TECHNOLOGY

TRADE SECRET ASSIGNMENT: 2020

Submitted to: Submitted by:

Ms. Richa Yadav Ananya Banerjee 8198

Professor Shreya Elizabeth 8160

Amity Law School, Section C, Semester IV

Noida, U.P. LL.B (2018-21)

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INTRODUCTION

The creation or absorption of new technology has become a vital component for companies to
improve or maintain their competitive position in the marketplace. Companies operating in
sectors where competition takes place on the basis of price alone, such as the extraction or
commercialization of raw materials, may rely on new technologies to improve their
efficiency in the extraction of raw materials by improving their productive processes or
acquiring new machinery and equipment. They may also use new technology to better
commercialize their products or to improve their management structure, control and
communication. Technological innovation is therefore a crucial element of the competitive
strategy of any enterprise, big or small, high-tech or low-tech. Foreign companies are also
showing an avid interest in India for trade in technologies and services as a result of which
intellectual property rights issues have gained significant importance.
While investing in technology creation may be expensive and risky, as there are many
uncertainties linked to the innovation process, it has the advantage of preventing
technological dependence on other companies and enables the company to enhance its
technological capability and to innovate according to its own specific needs. Companies have
to decide whether to develop technology in-house or to obtain it from others.

Technology transfer is the process by which a technology, expertise, knowhow or facilities

developed by one individual, enterprise or organization is transferred to another individual,
enterprise or organization. Technology transfer is the term used to describe the processes by
which technological knowledge moves within or between organizations. Technology transfer
may happen from country to country, from industry to industry or from research laboratory to
an existing or new business.

The topic of technology transfer encompasses commercial aspects and a range of laws
including intellectual property. No generalizations are possible regarding the terms of the
contract and much would depend upon the facts and circumstances underlying a particular
technology transfer.
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NATURE OF THE CONTRACT

A contract for technology transfer can either be a licence agreement or a know-how

agreement. The licence agreement normally refers to the licensing of intellectual property
rights such as patents, trademarks, copyrights, etc. whereas a know-how agreement involves
the transfer of information or skills which have not received statutory recognition. This
distinction has an impact on the confidentiality and secrecy aspects of the contract. Any
technology transfer contract broadly deals with the mode of transfer of technology, its use
under certain terms and conditions. The mode of transfer can take place through documents
or through the provision of technical services, assistance and training, software programs on
diskettes or even through the sale of machinery, raw materials or components that embody
technology.

In simple words, this contract is used when a company (Licensor) assigns or licenses to
another (Licensee) registered industrial and intellectual property rights (patents, utility
models, trademarks, copyright etc.) as well as technical assistance and know-how. In the first
case, knowledge and exclusive rights are granted, which are recognised and registered in
order to manufacture and market products, whilst in the second, knowledge is transferred
which has no legal recognition, but that does have a value in itself.

As in the Trademark License Agreement, in the technology transfer contract the price for the
assignment of industrial and intellectual property rights, as well as the know how is initially
paid a certain amount of money (fee) and during the term of the contract a percentage
(royalties) calculated on the amount of the sales of the products under license, made by the
Licensee. The fees for technical assistance services are paid individually for each service
rendered.

The Technology Transfer Agreement is increasingly being used in technological cooperation

strategies through which companies endeavour to enter into competition in certain sectors or
markets but without having to develop internally the technology necessary for that purpose
and that which is acquired through this type of contract to R&D+ i companies.

CONFIDENTIAL DISCLOSURE AGREEMENTS (CDAS)

A Confidential Disclosure Agreement [(CDA); also referred to as non-disclosure agreement

(NDA) or secrecy agreement] is a legal agreement between a minimum of two parties which
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outlines information the parties wish to share with one another for certain evaluation
purposes, but wish to restrict from wider use and dissemination. The parties agree not to
disclose the non-public information covered by the agreement. A CDA outlines the scope of
the confidential information the parties wish to share with each other for specified purposes.
CDAs are commonly executed when two parties are considering a relationship/collaboration
together and need to understand the other's processes, methods, or technology solely for the
purpose of evaluating the potential for a future relationship.

Purpose: Permits the transfer or exchange of proprietary information between parties

Benefits and Limitations:

● Is often the first step in partnering

● Permits viewing or obtaining information related to patent applications prior to public

release

● States the obligations of both parties and any exclusions that may be wanted

● Allows option to specify one-way or two-way exchanges

Confidential Disclosure Agreements (CDA) protect from disclosure or inappropriate use,

information identified as "confidential" by the two or more parties wishing to discuss
research efforts prior to a decision on whether to pursue a collaborative partnership.

MATERIAL TRANSFER AGREEMENTS (MTAS)

Material Transfer Agreements (MTAs) are contractual documents used for the acquisition of
various biological and research materials, and occasionally, data, developed by non-profit,
government and private industry. Often these materials are a necessary component of a
research project and are available only from a sole source, often industry.

Industry may view their materials as important proprietary resources, and may want to assert
ownership of any inventions made with those materials, or restrict publication of
unfavourable results.

They are utilized when any proprietary material is exchanged, when the receiving party
intends to use another’s material for his/her own research purposes, and when an informal or
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no-research collaboration between scientists from either party is planned. Included in the
MTA are provisions addressing use of the transferred material, confidentiality, data access
and dissemination, publication, and the requirement that the material be used only for
research purposes.

Purpose: Specifies the transfer and use of research materials for internal use between parties

Benefits and Limitations:

● Controls materials and information by identifying the parties involved, the materials
to be exchanged, and the expected use of the material

● Typically prohibits human use

● Requires non-commercial use of materials

● Is used with universities and non-profits

● Typically requires for-profit entities to have a Biological Material License to obtain

NIH-developed materials and technologies

CLINICAL TRIAL AGREEMENT

The agreement (CTA) is also known as a clinical study agreement or a clinical research
agreement. It is a contract between an academic institution and another party regarding a
clinical trial or study.

It is a legally binding agreement that manages the relationship between the sponsor that may
be providing the study drug or device, the financial support and /or proprietary information
and the institution that may be providing data and/or results, publication, input into further
intellectual property.

It is important to have a CTA for allocation of risk, responsibility, funds, obligations, and the
protection of academic, legal, intellectual property and integrity.

A clinical trials agreement should describe and acknowledge responsibilities, terms of

collaboration, requirements for payment and reimbursement, publication and intellectual
property terms, indemnification and or insurance, subject injury coverage, guidelines for
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dispute resolution, grounds for termination of contract, and possibility of amending contract
terms in the future.

Types of Clinical Trial Agreements

1. Clinical Trial Agreement with an Industry Sponsor

This type of agreement can be initiated by either a sponsor or investigator. A sponsor

initiated clinical trial agreement is required when the drug or device to be studied has
funding provided.

2. Investigator Initiated Clinical Trial

An investigator initiated clinical trial agreement is required when an industry sponsor

supplies the device or drug to be studied and/or the funding necessary for the trial.

3. Clinical Trial Agreement with an Academic Institution

This agreement is either a subcontract or a sub-award that has a lead site recruiting
one or more sub-sites where the clinical trial will be conducted.

COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT (CRADA)

A Cooperative Research and Development Agreement, commonly referenced by the acronym

CRADA, is a written agreement between a private company and a government agency to
work together on a project such as research and development of new technologies. It’s one of
the principal mechanisms used by federal labs to engage in collaborative efforts with non-
federal partners to achieve goals of technology transfer. It intended to be a flexible
mechanism that can be adapted to a variety of types of collaborative efforts between federal
and non-federal organizations and that can be implemented relatively easily within a
relatively short time. As a technology transfer mechanism, the CRADA is an extremely
useful tool in moving federally funded R&D into the private sector.

CRADAs are especially valuable to small, high-tech companies, which often struggle with
developing contacts inside defense laboratories. But once these firms identify a defense
laboratory they want to work with, usually by reading technical papers, a CRADA offers a
low-risk opportunity to collaborate and build valuable relationships.
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CRADAs are one of the primary tools by which technology and technical expertise can be
transferred from federal laboratories to non-federal partners

CRADA is therefore any formal written agreement between one or more Federal laboratories
and one or more non-Federal parties under which:

● The government, through its laboratories, provides personnel, services, facilities,

equipment, intellectual property, or other resources.
● No funds may be provided by the Federal laboratories to the non-Federal parties.
● The non-Federal parties may provide funds, personnel, services, facilities, equipment,
intellectual property, or other resources toward the conduct of specified research or
development efforts that are consistent with the missions of the bureau.
● Any property and equipment provided under technology transfer mechanisms will be
provided in accordance with established property management policies and
procedures.

A CRADA can:

● Provide incentives that help speed the commercialization of federally-developed

technology.
● Protect any proprietary information brought to the CRADA effort by the partner.
● Allow all parties to the CRADA to keep research results emerging from the CRADA
confidential and free from disclosure
● Allow the government and the partner to share patents and patent licenses.
● Permit one partner to retain exclusive rights to a patent or patent license.

The CRADA is also intended to take into account the needs and desires of private industry
when commercializing a product (e.g., the need for confidentiality and perhaps for exclusive
rights to a product), as well as a reward structure for government initiators (e.g., sharing in
royalties).

CRADAs establish the terms of sponsored collaborative research, generally with non-federal
industry partners and are specifically designed to protect the parties’ prior inventions while
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allowing the government and private sector research partner(s) to negotiate management of
any new discovery or intellectual property that may result from the collaboration.

1. R&D Facilities

Most defense laboratories have unique facilities with capabilities beyond what CRADA
partners can afford to build. Through a CRADA, a defense lab may allow partners to use their
facilities, though they remain subject to the facilities legal and policy requirements. This
includes access to specialized equipment. Federal laboratories often have access to equipment
and facilities that are of interest to small businesses with limited resources.
Through collaboration, a small business can gain access to what would otherwise be cost
prohibitive. Outside partners can leverage the government’s investment in science and
technology in support of mutually-beneficial research and development. The defense labs that
TechLink works with can perform specific tests and experiments in collaboration with the
CRADA partner.

2. Contacts and relationships

While a CRADA may limit the collaborative work between a federal laboratory and a partner
from the private sector, the relationships formed often prove invaluable to small businesses.

Under a CRADA, businesses can learn about the government’s needs, and become better
positioned to engage on other contracts and opportunities. Joint research through a CRADA
allows strong relationships to be built with defense researchers, as well as a thorough
understanding of the mission and capabilities of federal laboratories. A CRADA is often an
opportunity for a business to grow its network of contacts in the federal laboratory system.

3. Intellectual property

If collaboration under a CRADA results in emergent technology, then the federal laboratory
or the collaborator can apply for a patent, accounting for all inventors. Typically, the
collaborator would be given the first option to negotiate an exclusive commercial license and
the government would retain a right to use the invention for non-commercial purposes.

But through research completed under a CRADA, either party may invent a new technology
leading to new intellectual property. This can raise questions with nuanced answers but the
general principle surrounding intellectual property remains, what’s theirs is theirs, what’s
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ours is ours, and what is invented together is shared. And in cases where a party’s interests
are no longer being served, the CRADA can typically be terminated 30 days after notice.

4. Pooling talents

After executing a CRADA with a defense laboratory, collaboration gets much easier.
CRADAs allow federal researchers, scientists, and engineers to share technical knowledge
with private industry, and to accept reimbursement for research conducted under the
CRADA. When industry and defense laboratories collaborate, they’re able to utilize the
experience, knowledge and skills of all parties involved. A CRADA helps the federal and
non-federal researchers to pursue the best solution to the research problem or capability
development. This teamwork supports the chances of significant achievement in a shorter
time.

5. Innovation

The CRADAs that TechLink facilitates are often directly related to a business’s interest in
licensing a patented DoD technology or vice-versa. Sometimes a defense laboratory or centre
wants to experiment with a patented invention in their facility in ways that could identify new
attributes or capabilities that will make the technology valuable for DoD purposes.

And when the parties interact and share ideas, they see and understand how others address
research problems, negotiate administrative tasks, and generally operate. This gives all sides
a chance to learn from their teammates or counterparts and build upon their capabilities.
These new skills can then be put to use in their other work, giving new perspectives and
insights that advance technologies.

6. Confidential

CRADAs require that both parties keep the technical data resulting from their collaboration
confidential for up to five years. This allows industry partners to work without fear that their
efforts will be disclosed to others including competitors.