Technology plays an important and increasing role in the business world, even in industries that may not at first impression appear to be technology-based. Technology impacts everything from the efficiency of production and the nature of services offered to clients to a company’s management systems and marketing effectiveness. Having access to the right technology transfer agreements can be key to an organization’s ability to compete in the modern business world, and relevant technology is always evolving.
Technology Transfer Agreements
Of course, most businesses will not independently create or contract for the creation of all the technology employed in their operations and management. Thus, technology transfer agreements play an integral role in the efficient operation of businesses across industries.In some cases, the technology is licensed. However, an organization may also acquire the technology rights from the current holder, or even acquire the holder itself as a means of securing the technology. In addition, the parties may enter into one of the several different types of agreement in which technology transfer is just one element.
Acquiring Technology is a Complex Process
An outright acquisition may sound simple, but acquiring technology is not like acquiring a building or new office furniture. It is important for any business transferring technology or acquiring technology to understand the complexities of the process, and the interconnections between the legal and practical considerations. An attorney with technology transfer experience can be your best resource for ensuring that agreements are properly constructed and the transfer occurs as smoothly as possible.
The Nature of the Technology Transfer
One of the first issues to be decided in connection with a transfer of technology is whether the rights to the technology will be purchased outright by the recipient and assigned by the current holder, the acquiring party will simply license the use of the technology, or some other type of business arrangement will be established between the parties.
Special Considerations
The pros and cons of each arrangement will depend on a number of factors, including the needs of the recipient, the cost effectiveness of each model, the extent to which the technology will be integral to the acquiring party’s operations, potential liability issues and the potential competitive impact of a less-than-complete acquisition. It is also important to consider the speed with which technology advances and the potential necessity for updates and adaptations. A company that does not have the internal resources to make those adjustments as necessary may find a licensing agreement or another arrangement more beneficial, since the responsibility for updating the technology may be allocated to the original holder.
Methods of Acquisition
Some many ways in which technology transfer can be achieved include, singly or in combination:
- Assignment of intellectual property rights directly
- Acquisition of intellectual property rights as part of a purchase or merger
- A joint venture agreement
- A franchise agreement
- A licensing agreement
Whether you are unsure of the best type of transfer for your needs or simply need an agreement drafted that achieves your goals and protects you from pitfalls and unanticipated consequences, the experienced technology transfer attorneys in our firm can help.
Negotiating a Technology Transfer Agreement
The nature of the transfer is just one aspect of a potentially extensive negotiation between the rights holder and the acquiring party. Even where the parties have agreed in principle, creating a contract that adequately reflects the intentions of the parties, provides the necessary protections and anticipates potential issues and conflicts can be complicated, and requires a solid knowledge of both contract law and the practicalities of transferring technology.
Some frequent considerations include:
- The extent to which transfer of physical material is necessary or desirable
- The extent to which the technology may require adaptation for the transferee’s purposes and which party is responsible for such adaptation
- If the transfer is less than an outright assignment, the ramifications of integrating the technology into the transferee’s existing technology or processes
- The extent of training, consulting and/or documentary instruction necessary or desirable for the transferee to make effective use of the technology
- Any potential conflicts of interest or competition between the transferor and transferee
Talk to a Technology Transfer Attorney Before You Act
Technology transfer can be critical to your business, but is a complex process with special considerations. The role of a technology transfer attorney extends far beyond the preparation of an effective technology transfer agreement. To best protect your rights and the future of your business, speak to an experienced attorney at KPPB LAW as early in the process as possible, before you begin negotiations.
