Title: Role of Intellectual Property in Technology Transfer

Written By:
Animesh Singh
Xth Semester
Dr. Ram Manohar Lohiya National Law University, Lucknow

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Table of Contents

1. Introduction

Page 3

2. What is Technology transfer

Page 4

3. Intellectual Property Rights and Economic Growth

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4. IPR and International Technological Diffusion

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5. Role of patents and other IPR in technology transfer

Page 7

6. University-Industry Collaboration

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7. Trips Agreement and Technology Transfer

Page 12

8. Article 66.2 of Trips and Its Implications

Page 16

9. Conclusion

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10. Bibliography

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Introduction
Knowledge is typically non-excludable in that it is not possible to prevent others from
applying new knowledge even without the authorization of its creator. If a new technology is
valuable, it is therefore likely to be copied or imitated, reducing the potential profits of the
original inventor and potentially removing the incentive to engage in innovative activities.
Intellectual property rights (IPRs) encourage innovation by granting successful inventors
temporary monopoly power over their innovations. The consequent monopoly profits provide
the returns on successful investment in research and development (R&D), which must be
large enough to compensate for the high share of R&D investment that is unsuccessful.
Once an innovation has been created, its non-rival character suggests that its benefits will be
maximized if its use is free to all at marginal cost. Although this availability to all will yield
benefits in the short run, it will also severely damage the incentive for further innovation.
But, excessive IPR protection is likely to lead to an inadequate dissemination of new
knowledge, which in itself could slow growth to the extent that access to existing technology
is necessary to induce further innovation. Weak IPR protection has actually stimulated R&D
activity in many countries by encouraging knowledge spillovers from transnational
corporations (TNCs) and other domestic firms. Giving innovators too much protection may
also lead to permanent monopoly. Entry by rivals may be impeded, and successful innovators
may have reduced incentives for developing and exploiting subsequent innovations. Choice
of IPR policy then reflects a balancing of these considerations. The awarding of a temporary
monopoly, although second best, is intended to restore the incentive to innovate, which in
turn should encourage long-run growth and improved product quality.
Developed countries, with many potential innovators, have tended to opt for relatively strong
IPR systems, with the aim of encouraging inventive and creative activities that are seen as an
important source of long-run economic growth. With R&D spending concentrated in a
handful of the worlds richest countries, genuinely innovative activities are limited in most
developed and developing countries. The majority of countries in the world have taken a
different approach, providing only weak IPR protection, if any, as a way of allowing the rapid
diffusion of knowledge through imitation as a significant source of technological
development. Providing stronger IPR protection is seen as shifting profits from domestic
imitative firms to foreign firms and reducing output in the domestic economy, rather than
encouraging domestic innovative activity. The counter argument is that stronger IPR
protection can help reward creativity and risk-taking even in developing economies, while
weak IPR protection can make developing countries remain dependent on dynamically
inefficient firms that rely on counterfeiting and imitation.
The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) was
established during the Uruguay Round (1986-1994) of trade negotiations in order to
strengthen the international IPR regime. The TRIPS Agreement is the first comprehensive
and global set of rules covering IPR protection. The TRIPS Agreement specifies minimum
standards that should be attained by a designated time. The areas covered are copyrights and
related rights, trademarks, geographical indications, industrial designs, patents, the layout
designs of integrated circuits and undisclosed information including trade secrets and test
data.

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What is Technology Transfer?

Technology transfer involves sharing of skills, knowledge, expertise, methods of
manufacturing, manufacturing facilities, etc. associated with a particular technology between
two or more parties. Technology transfers ensure that the scientific and technological
developments are accessible to a wider range of users. These users can further develop and
exploit the technology to come up with new products, processes, applications, materials or
services. The parties involved in technology transfer generally are technology companies,
research organizations, universities and colleges, and Government organizations. The process
of technology transfer is generally based on mutual interests of the parties and mutual
agreements between the parties. The objectives behind technology transfers include
commercialization of technology, and dissemination of technology. Thus, technology transfer
enables a wider range of users to have access to the technology for social and economic
development.
Why Technology Transfer?
Technological superiority and intellectual capital undoubtedly provide nations and companies
with cutting edge over their counterparts. However, in current global economy, growth of
trades depends on cross-disciplinary and cross-border collaborations. In this context,
technology transfer serves as a means for synergistic techno-commercial collaborations.
Through technology transfer, the parties involved are mutually benefited. The technology
transfer may take place between two technology companies, or a university and a technology
company.
Further, the parties involved in technology transfer may be located in different countries
thereby resulting in cross-border collaboration. For example, a technology developed by one
technology company may be transferred to another technology company in a different
geographical location. The motive behind this may be expansion of market for technology
using the facilities of another technology company located at different location.
The other objectives of technology transfer may include cost saving benefits associated with
a geographical location. For instance, a technology company or a university may not have
funds to develop the technology or expertise to commercialize the technology. Hence, the
technology may be transferred at a raw stage to another technology company for further
development of the technology. Moreover, companies active in the transferred technology
may come up with innovative applications of the technology to develop better products. Such
cross border collaborations lead to technological development of developing and under
developed nations. For example, the technology transfer in areas like green technology can
bring about a revolution in energy conservation and prevention of pollution worldwide.
Although, technology transfer is mostly based on contractual agreements, IPR also plays an
important role in governing the technology transfer. For a fruitful technology transfer, a
technology should be well guarded by IPR.

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Intellectual property rights and economic growth

If we look at the world as being composed of two types of countries: a developed, innovating
North and a developing, imitating South1, then the impact of stronger IPR protection
benefits the innovating North, but its impact in the South where innovation is limited or nonexistent is ambiguous, depending inter alia on the channels through which technology is
transferred. Research indicates that stronger IPR protection is only found to benefit the South
when R&D is highly productive, thus resulting in significant cost reductions, and when the
South comprises a large share of the overall market of the product.
Research also shows that the benefits of increased innovation through stronger IPR protection
become weaker as more and more countries strengthen their IPR regimes, because the extra
market covered and the extra innovation that can be stimulated by such protection diminishes.
Since IPR holders engage in monopoly pricing that distorts consumer choice, strengthening
IPR protection can lead to welfare reductions, particularly in a country that undertakes little
or no R&D and would otherwise be able to free ride on foreign innovations.
Trade channel
When technology is transferred through trade, then successful southern imitation results in
shifting the competitive advantage for the production of imitated products from the North to
the South. Stronger IPR protection in the South decreases southern imitation and increases
northern innovation in the short run, as innovation becomes more profitable. In the long run,
though, innovation in the North may fall, because if new products are produced for a longer
time span in the North, fewer resources are available for innovation there. Stronger IPR
protection in the South may then reduce global growth. But weak IPR protection in the South
may have effects besides reducing the incentive for innovation in the North. Northern
exporters may be able to mask their production technologies, thereby limiting the extent to
which these can be imitated through traded goods. The potential gains from technology
transfer through weak IPR protection in the South might then be offset by increases in
northern masking.
Foreign direct investment channel
When foreign direct investment (FDI) is considered as a source of technology transfer,
northern innovators may shift production to the South, reducing competition for resources in
the North. Stronger IPR protection can then encourage FDI and lead to increased innovation.
However, if it is easier to imitate TNC products produced in the South than products
produced in the North, then production may be shifted back to the North, leaving fewer
resources available for innovation in the South.
Licensing channel
If technology is transferred through licensing, stronger IPR protection in the South results in
greater innovation in the North, and increased licensing to the South. Licensing has the
advantage to northern firms of higher profits due to lower production costs in the South, but
1 The use of the terms North and South is a simplification of reality often used in the literature.
UNIDO (2005) notes that this simplification ignores inequality within the North and the South
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involves other costs in terms of contract negotiations, transferring the necessary technology
and in the rents that the innovator must give to the licensee to discourage imitation. By
reducing the risk of imitation, stronger IPR protection in the South also reduces the costs of
licensing, thus encouraging licensing and freeing up resources in the North for innovation.
In sum, much depends upon the channels of transmission available and the ability of the
South to take advantage of the technology to which it is exposed. While IPR protection would
be expected to enhance growth in countries that move toward free trade and have a
comparative advantage in innovative technology-intensive activities, its impact on countries
lacking such advantages is less clear. An overview of the literature that directly tests whether
stronger IPR protection is likely to result in higher growth is presented in table 2. These
studies tend to measure the strength of IPR protection using indices based on the perceived
strength of a countrys patent law.
The literature reviewed in table 2 provides evidence that strengthening an IPR regime can
enhance growth, depending on country characteristics. IPR protection seems to lead to higher
growth in more open economies, other things equal. It also seems to lead to higher growth in
the developed and least developed countries (LDCs), but has no significant effect on growth
in middle-income countries. The developed countries benefit the most in terms of growth
from stronger IPR protection, because stronger IPR protection encourages domestic
innovation and technology transfer. Findings also imply that the LDCs, with little capacity to
imitate and innovate, benefit from growth from a stronger IPR regime, but the available
evidence is not clear on the exact channels through which the LDCs may benefit: a stronger
IPR regime is found to have little positive impact on many technology diffusion channels,
including trade, FDI and licensing.
The middle-income countries are likely to have some capacity to imitate, and for them
stronger IPR protection can have two offsetting effects, encouraging technology transfer
through increased imports and FDI, on the one hand, but reducing technology transfer by
limiting the extent of imitation on the other.

Intellectual property rights and international technology diffusion

International technology transfer or diffusion refers to the process by which a firm in one
country gains access to and employs technology developed in another country. Some
transfers occur between willing partners in voluntary transactions, but many take place
through non-market transactions or spillovers.
The impact of stronger IPR protection on technology diffusion is ambiguous in theory and
depends on a countrys circumstances. On the one hand, stronger IPR protection could restrict
the diffusion of technology, with patents preventing others from using proprietary knowledge
and the increased market power of IPR holders potentially reducing the dissemination of
knowledge due to lower output and higher prices. On the other hand, IPRs could play a
positive role in knowledge diffusion, since the information available in patent claims is
available to other potential inventors. Moreover, strong IPR protection may encourage
technology transfer through increased trade in goods and services, FDI, technology licensing
and joint ventures. Despite this theoretical ambiguity, the diffusion of technology from
countries at the technological frontier to other countries is considered the main potential

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benefit of the TRIPS Agreement, particularly for developing countries that tend not to
innovate significantly.

Role of Patents and Other IPR in Technology Transfer

IPR regulations of a particular nation provide a legal framework for technology transfer. In
particular, patent system provides an inventor the right to exclude others from utilizing the
technology discovered by him without his consent. Whereas, through technology transfer the
inventor may allow others to utilize his technology on certain terms and conditions.
Therefore, IPR plays an important role in technology transfer. For example, if the technology
to be transferred is protected by a patent or any other form of IPR, the parties involved in the
technology transfer need not solely depend on contractual agreements. Instead, the parties can
form well-defined licensing agreements. A licensing agreement2includes well-defined clauses
such as, royalty rates, exclusivity, etc. Thus, the license agreement may serve as a more
effective tool for a healthy and fruitful technology transfer as compared to contractual
agreements.
On the other hand, if a transferee is located in a country that does not provide patent
protection, the parties may have to rely on contractual agreements. Such arrangements are
associated with high commercial risk, especially for a transferor of the technology. Moreover,
these transactions do not guarantee protection against practicing of the technology by a third
party. In another scenario, the transferor of the technology may belong to a country that does
not have patent protection. In such a case, managing a healthy and fruitful technology transfer
may become difficult. Whereas, technology transfer involving patented technology
guarantees protection against copying and unauthorized use of the patented technology.
A technology well-guarded by patents has more advantages. For instance, a potential
transferee can acquaint himself with a patented technology well before the actual technology
transfer. Whereas, a technology transfer of a non-patented technology may involve the risk of
technology being disclosed prior to the technology transfer. Thus, typically a technology is
disclosed once the parties sign a confidentiality disclosure agreement or through secret
disclosures. Although the parties enter into contractual agreements, there is again a risk
involved in disclosing the technology to a third party. As a result, the transferor may set up
higher royalty rates for the technology to be transferred.

Phases in Technology Transfer

The entire process of technology transfer may be variedly divided into different phases.
However, taking into consideration the focus and scope of this article we divide the process
of technology transfer in following phases:

1. Creation of Intellectual Property (IP)

2 License agreement indicates a consent by the owner of the IP for use of the IP by the licensee in
return of certain value (e.g. royalty).
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2. Protection of IP
3. Identification of a Need for Technology Transfer
4. Identifying the Transferee or Transferor
5. IP Assessment of the technology to be transferred
6. Formulating conditions for Technology Transfer
7. Implementing Conditions for Technology Transfer
8. Monitoring the Conditions

Although, the actual process of technology transfer does not start at the creation of IP and
protection of IP, these two phases have been considered for the sake of completeness of the
process. Creation of IP is about discovering and/or developing a new technology that can be
commercialized. Protection of IP involves securing patent or any other IPR protection for the
new technology. The actual process of technology transfer starts once a need for technology
transfer is identified. Generally, the need for technology transfer is identified based on certain
commercial objectives of the transferor and/or the transferee.
Subsequently, a transferor or a transferee may be identified based on the need for technology
transfer. For example, a university that has developed a technology may identify a technology
company for further development of technology or commercialization of the technology or
both.
Upon identification of the transferor or the transferee, IP assessment of the technology is
performed. The IP assessment may involve assessment of the technology based on technical
evaluation, financial evaluation, commercial evaluation, etc. Based on the IP assessment, if
the parties decide to go ahead with the technology transfer, the conditions for transferring the
technology are formulated by the transferor and/or the transferee. The conditions for
transferring the technology include negotiations and licensing agreements. The actual transfer
of the technology takes place once the conditions are agreed upon by parties involved, after
the transfer of the technology, the transferor monitors the conditions agreed upon.

IP Assessment of a Technology to be Transferred

The IP Assessment of the technology to be transferred is done to evaluate the technology on

various factors. In general following factors are considered while evaluating the technology:

1. Uniqueness of the discovered technology

2. Patentability of the technology (if not patented).
3. Place of the technology in an array of other similar technologies.
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4. If the technology is already patented, assessing the strength of the patent.

5. Cost involved in protecting the technology and maintaining the IPR protection, etc.
6. Requirement of additional in-licensing for practicing the technology.
7. Know-how or trade-secret associated with the technology in order to achieve the best
results by practicing the technology.
8. Other exclusive or non-exclusive licensing agreements associated with technology.

In addition to above-mentioned factors, some other factors such as, competitor analysis,
market potential, financial evaluation, technical evaluation and industrial scalability may also
be considered for performing the IP assessment. The objective of the IP assessment will
generally remain same for both the transferor and the transferee. For example, a common
objective of the transferor and the transferee may be to get an insight about the position of the
technology in an array of similar technologies.
However, in certain cases the objective may differ. For instance, the transferee may perform
IP assessment of technology to know whether any additional in licensing is required for
practicing the technology. Whereas, the transferor may under take IP assessment to show the
strength of the patent that protects the technology.
Based on the results of the IP assessment, the transferee and/or the transferor may take
strategic decisions regarding the proposed technology transfer. For example, a licensing
strategy may be developed by the transferor and/or transferee based on the IP assessment.

Technology Transfer and Licensing

The parties involved in technology transfer generally have different interests. However, for
the technology transfer to take place the parties should have some mutually beneficial
interests. Further, these interests should be agreed upon in the contractual agreements,
including technology license for a successful technology transfer. For example, consider a
scenario of technology transfer between a university and a technology company. The interest
of the university may be to acquire expertise to commercialize the technology. On the other
hand, the technology company may be interested in commercializing the technology for
accruing revenues and profit. Thus, a contractual agreement between these two parties will
result in benefit to both the parties.
Generally, when the parties have some common interests in technology, the negotiation for
technology transfer begins. It is important for both the parties to sign confidentiality
agreements (Non-Disclosure Agreements). Additionally, Interim Agreements, Feasibility
Agreements, and Prototype Agreements may also be used depending upon the nature of
technology to be transferred. However, it is not advisable to use memorandum of
understanding and letter of intent in technology transfer transactions as these are not
agreements, but a mere statement of intents and future plans.

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Amongst all the agreements involved in technology transfer, licensing agreement is the most
important agreement. License may be granted for IP that is necessary to further develop,
reproduce, make, use, market, and sell products based on the technology to be transferred.
The terms and conditions of a licensing agreement determine the success of the technology
transfer. Therefore, while formulating the licensing agreement, the parties involved should
define the technology to be transferred without any ambiguity. Certain factors to be
considered while defining the technology in the licensing agreement include:
type of the technology i.e. product, process, facility, software, formula, etc.;
need for additional license for practicing the technology;
industrial standards or specifications associated with the technology; and
details required to practice the technology.
Other factors that need to be considered for a successful technology licensing are:
owner/s of the technology;
nature of ownership;
other non-exclusive or exclusive licensing associated with the technology;
assistance required from the licensor to further develop or practice the technology;
other IPRs such as trademark, copyright, trade secret, etc. associated with the technology;
nature of technology (e.g. standalone technology, platform technology);
scope of rights expected from the technology license;
territory and industry in which the technology can be utilized; and
terms and value of royalty, etc.

University-Industry Collaboration
After independence in 1947, Indian science and technology policy was integrated into the
fabric of the planned economy. A series of five-year plans set out the basic national strategies
for economic growth and industrial development. Over the last ten years however, India
moved gradually from a planned and closed economy to a more open and deregulated one,
with new challenges being set forth for universities and industries. Presently, India is in the
process of implementing its 10th five-year plan. In the area of science and technology (S&T),
the country is being steered by the S&T policy of 2003. It is only in recent years that Indian
industry has really started collaborative programs with universities. Indian success in the
software sector is remarkable. The market share for India in the global IT service business is
now 4.4%. Major global IT companies have outsourced some part of their operations to India
and have established R&D centers there as well. Indian IT engineers are working in many
industrialized countries and contributing to the advancement of information technology. A
few world-famous universities like Indian Institute of Technology have made this success
possible. But overall, few Indian industries are supporting research projects within
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universities. Most of the collaboration is in the form of consultancies, which typically do not
involve large-scale projects. On the other hand, according to the survey questionnaire
conducted by P. Ganguli in the Indian national study, Indian universities are not fully aware
of the importance of intellectual property rights (IPRs) and lack the resources to manage
them. Both sides need to reach out if U-I collaboration is to flourish.
Indian academic institutions became aware of the importance of protecting and disseminating
their knowledge through patents rather recently and the trend seems to be continuing. In
1995, only 35 applications were filed, but it rose to 96 in 2001 and 79 in 2002. Out of the
more than 300 Indian universities, the number of academic institutions that filed patent
applications during the last four years was in the range of 22 to 29 per year (a total of 62 over
the four-year period), and this was still too small compared with the high number of
educational institutions in India that engage in R&D activities (see Table 6). In contrast to
this modest progress, the performance of the Council of Scientific and Industrial Research
(CSIR) has been outstanding. The number of patents filed and granted doubled or tripled
every year after 2001. This is a result of an aggressive and systematic IPR policy as well as
the benefit of 39 networked laboratories. This points to the importance of attitudes and
policies taken by individual research organizations in advancing the protection of inventions.
In India, science and technology policy is determined by the general direction set out in
Science Policy 2003 and its implementation plan. The responsibility of administering S&T
policy is spread out over many government ministries and their departments, each one of
which has jurisdiction over a particular field, such as environment, agriculture, health,
information technology and water. The Department of S&T in the Ministry of S&T is the
central body that deals with the promotion of S&T. But, apart from this department, the
Department of Scientific & Industrial Research (DSIR) was created in 1985, with a mandate
to oversee indigenous technology promotion, development and transfer. DSIR is also
responsible for coordinating the activities of the Council of Scientific and Industrial Research
(CSIR) and two public enterprises, namely National Research Development Corporation
(NRDC) and Central Electronics Limited (CEL). The NRDC provides consulting service to
academia and industry for the protection of their IPRs and the transfer of technologies. This
function of the NRDC is central to supporting and facilitating effective industry-academia
collaboration that result in the commercialization of technologies.
In the last few years, India has amended and enhanced its IPR legislation to be in full
compliance with the TRIPS Agreement of the WTO. But it should be noted that, unlike Korea
or Japan, India does not have any specific law, like the Bayh-Dole Act of the United States,
that dictates the ownership of the inventions that arise from publicly funded R&D. Different
ministries, departments and funding agencies have different policies. For example, the
department of S&T issued general guidelines regarding the ownership of IPRs that resulted
from DST funding. This guideline leaves the question of ownership to the contract made
between the inventor and the enterprise. On the other hand, inventions from projects funded
by the Department of Ocean Development can be owned entirely by the institutions.
Guidelines from other government departments are yet to be formulated, as their IPR Policies
are still being made. Generally speaking, the concept of IPR policy in Indian academic
institutions is still incipient with only a small number of institutions announcing their
policies. Most universities just deal with IPR on a case by case basis.

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In India, most of the R&D funding comes from government ministries. In the year 2001-2,
universities accounted for 51% of the total projects in number, but only about 28% in terms
of funding. The national laboratories spend 38% of the total funding. It is possible that
universities undertake more basic research, which is less expensive, while national labs
conduct research at more advanced stages, which tends to be more expensive. Like many
other Asian countries, engineering and life sciences (biotechnology and medical sciences) are
the two biggest fields for national research funding. In addition to general funding, some
government departments, such as the Department of Scientific and Industrial Research
administer specific programs for collaboration with the private sector at various stages of
development. Among them, the University Grant Commission (UGC) provides seed funds on
condition that the outcome is patented.

TRIPS agreement and technology transfer

The careful attention that our contemporary society pays to the process of international
technology transfer is caused by the fact that technologies are a deciding factor of economic,
social and innovative development at both regional and global levels. The provision of access
to technology for developing and more especially for least developed countries (LDCs) is a
paramount item of global Agenda. The list of more sensitive technologies for LDCs is needed
each day for development. Multiplicity of technological innovations may be needed for
information technology, water treatment, waste management, renewable energy technology,
biotechnology, marine technology and sustainable forest management and usage of forests.
With respect to all these, it should be stressed that international transfer of technology to
LDCs is one of the most actively discussed issues of international economic relations and
international relations in the area of aid to development in past fifty years. International
technology transfer is considered to be significant tool that is able to reduce the remaining,
permanently modifying knowledge and technology gap between developed and developing
countries. Results of international technology transfer depend, at best, on modes of the latter
having, inter alia, some negative aspects such as conservation of technological dependence of
LDCs on developed countries, i. e. technological colonialism. That is why various
international instruments assign obligations of developed countries to carry out technology
transfer to developing countries having the low technology and innovative capabilities. So,
Article 66.2 of the Agreement on trade-related aspects of intellectual property rights (TRIPS
Agreement) imposes some obligations on developed countries to create incentive for
enterprises and institutions in their territory with the aim of increasing of transfer
technologies to LDCs.
The problems associated with the transfer of technology to developing countries and
particularly to LDCs had been discussed during the past five decades. Results of these
discussions are numerous bilateral and multilateral initiatives at the international levels.
These initiatives have become the basis for the elaboration of legal norms laid down in
national legislation and international instruments, such as various sources of soft and hard
international laws. Concurrently, in a given international documents, the right of developing
countries to access technologies has been recognised. I should stress that this right may be
voiced as a consequence of extreme interest of developing and especially to LDCs in
obtaining these technologies, particularly related to innovative technologies. Due to
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international technology transfer, developing countries globally could gain access to

technologies that may be new to them. More so, the right to access new technologies should
be understood as one of the elements of right to development. Hence, the transfer of
technology to developing countries is of a great concern. Discussions on setting up the New
International Economic Order (NIEO), which is an integral part of the New International
Technology Order (NITO) include the new order of international technology transfer. The
relevant content and extent of intellectual property rights (IPRs), as well as regime of IPRs
protection are as part of the latter. The contemporary conception of international technology
transfer goes beyond a purely economic approach3. The conception of knowledge and
technology as public goods lays down the foundation of modern concept of international
technology transfer4. Hence, the idea that knowledge, information and technologies are both
public and individual goods is the focus of the Draft of the Treaty on access to knowledge 5.
In seeking to promote the transfer of technology and knowledge to developing countries, the
core objective of this project is to take into account the need for a balanced vector of
development of IPRs and protection of them (part 3, part 4).
I want to underscore that, technologies are global public goods of intellectual nature. They
enable us form appropriate conditions which are necessary for the realisation of human right
and protection of life from one generation to the next generations. Hence, the core challenge
for policy in international cooperation is to set up and maintain an effective access to
technological information and knowledge. Another challenge is to devise the special
mechanisms for deploying them effectively within an economy and other sectors of society. It
is true for all range of countries, since the right to development in conjunction with the right
to access to technology is universal. The central theme of my paper is that the IPRs is
necessary for the transfer and diffusion of technologies but do not factor their restriction. It
implies that, there is a potential need to use the Intellectual Property (IP) international system
to act as a horizon for national and international regulation for the technology transfer. This
will thereby provide the path for implementing the provisions of international instruments on
technology transfer with additional IPRs protection. However, patent security is a subordinate
aspect of technology transfer and diffusion of technologies. It is germane to understand that
technologies are global goods, and the implicit aim of an international system of IPRs
protection is to facilitate technology transfer to LDCs other than to restrict them. This
paradigm articulated in conventional instruments concluding provisions on technology
transfer covers international instruments in the sphere of IPRs protection. In effect, this
demonstrates not only the TRIPS Agreement but also other instruments of the WTO.

3 Breitwieser, A. and N. Foster (2012). Intellectual property rights, innovation and

technology transfer: a survey. Munich Personal RePEc Archive Paper No. 36094,
Germany (Pages: 75). Available at http://mpra.ub.uni-muenchen.de/36094.
4 Maskus, K. E. and J. H. Reichman (eds.) (2005). The globalization of private
knowledge goods and the privatization of global public goods. In: International
public goods and transfer of technology under a globalized intellectual property
regime. Cambridge: Cambridge University Press, pp. 3-45
5 http://www.cptech.org/a2k /a2k_treaty_may9.pdf.
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Transferred technologies, including technology transfer for development goals, may also be
proprietary, for example, biotechnologies. This moment is taken in consideration by
international instruments. Consequently, international instruments referring to technology
transfer imply protected and non-protected technologies. Un-proprietary technologies,
namely technological knowledge as the public goods, are used freely. They are free of charge.
This is a feature of access to them. Proprietary technologies, in essence, also are accessible,
albeit their accessibility demands authorisation. One of key instruments regulating the
transfer of proprietary technologies is the TRIPS Agreement setting up the congruent minimal
standards of IPRs protection around the world. International technology transfer, being a
critical factor of sustainable rate of economic growth and development in whole, is very
sensitive to implications of IPRs protection. At one time, it should be stressed that role of
protection and enforcement of IPRs in international technology transfer is the issue of special
global policy in the area that influences all countries, including LDCs. This may be quite
said that the concept of technology transfer also includes, viewing the IPRs, especially patent
rights and trade secrets, and in certain degree, the copyright addressing the ICTs and
software, in kind of its necessary aspect. Besides the approach to technology transfer as
transfer of information and technical knowledge that are results of intellectual activity, the
great significance has a specifying of issue on what IPRs do mean as regards technology
transfer. With increasing of transnational trade flows, especially flows of sophisticated
production and exclusive rights to it, linkage between patents and technology transfer has
been getting an overarching recognition not only at the national but also at the international
levels.

Review Analysis and Respective Implications

1. The role of the TRIPS Agreement for the development of an international technology
transfer: concise analysis; Despite the fact that the TRIPS Agreement was inspired by
pharmaceutical TNCs, it provides the scope and extent of IPRs disciplines that is
unprecedented at the international level. The adoption of the TRIPS has become as starting
point for globalization of IPRs as a new level of development of an international system of
IPRs protection. This protocol had made international standards to become the basis for an
essential evolution for national systems in directing their convergence around the world 6. It is
well-known that the TRIPS as the first comprehensive agreement contains set of minimum
standards covering IPR protection in main IPRs areas. These standards as a requirement
should be provided by each Member of the WTO. Moreover, the TRIPS require the member
countries to develop appropriate mechanisms to enforce protected IPRs. The adoption of the
TRIPS which was conditioned by the globalization of markets has been accompanied by
dynamic growth of investment, trade of technology and high tech products (doubled between
1980 and 1994)7 . Differences in IPRs protection having been conferred by national laws
globally have restricted cross-boundary technology exchange. Thus, this had rendered weak
the patent protection in many developing countries. Firms from developing countries with
weak regime of IP protection have striven to obtain the access to foreign high tech products
in order to copy it and also gain the benefits associated thereof. This demand has led firms
6 Archibugi, D. and A. Filippetti (2010). The globalization of IPRs: four learned
lessons and four theses. Global Policy, 1(2), 137-149
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which have heavily invested in Research and Development (R&D) to put pressure on their
national governments to strengthen their international IPRs regime 8. TRIPS as central part of
global legal system in the area of IPRs, has had important implications for global economic
growth. This global trend in economic growth had also significantly affected international
technology transfer. Some analytics underscore emerging significant changes and specificity
of international technology transfer after the adoption of the TRIPS in 1994 9. Indeed, the
TRIPS encompasses majority of countries, therefore its implications for global economy and
international technology transfer are certain.
It should be remembered that until the TRIPS
in 1970-1980, the policy of world society for development had focused on questions of
imperfections in the transfer technology mechanisms and possible conditions for increasing
their effectiveness. Some issues raised with this policy included how to reduce costs
connected with transfer transactions and how to also remove negative obstacles of market
character, for example, defects in international market. It seems that the adoption of the
TRIPS led to an increase in market. To be precise, trade approach to international technology
transfer and departures from above mentioned coordinated paradigm of international
technology transfer, taking into account the interests of developing countries. Before the
adoption of the TRIPS, IPRs created artificial barriers instead of promoting the innovation.
This practice made dissemination of the knowledge costly. Thus, the close connection
between patents, trade and technology transfer was recognised in Articles 7, 8 and 66.2 of the
TRIPS Agreement. For that reason, discussion on IPRs protection was displaced to focus on
global policy on technology transfer. This shift rests on the basis that, IPRs protection is the
vehicle for economic development through trade. Nonetheless, this shift does not mean a
negation approach to technology transfer as tool for the realization of the right to access to
technologies in the context of the right to development. It may be expounded by the fact
that, the trade and trade aspects of IPRs as well as a new way posing technology transfer,
continue to have the profound human rights foundation. Moreover, the TRIPS seek to invoke
the setting of basic principles for the balance between protection and enforcement of IPRs.
On the one hand, it also seeks the promotion of technology development as well as the
transfer and dissemination of technologies. Under the preamble of this Agreement, there is a
stipulation of terms due to the coordination between goals of national systems of IPRs
protection and goals of development and technology progress. In accordance with Article 7
of the TRIPS, protection and enforcement of IPRs should contribute to the promotion of
7 Fink, C. and Primo Braga (2005). How stronger protection of IPRs affects
international trade flows. In: Fink, C. and K. E. Maskus (eds.). Intellectual Property
and Development: Lessons from Recent Economic Research. A copublication of
the World Bank and Oxford University Press. Washington, DC, Oxford, pp. 19-40
8 Correa, C. M. (2000). Intellectual property rights, the WTO and developing
countries: The TRIPS Agreement and policy options. London: Zed Books (Pages:
268).
9 Latif, A. A. (2013). From the UNCTAD Code of Conduct to the WTOs TRIPS
Agreement: global efforts for technology transfer. WIPO Regional Consultation on
Technology Transfer, ICTSD, Algeria (Pages: 24). Available at
http://www.inapi.org/PDF/WIPO_WORKSHOP/ UNCTAD%20Presentation
%20Algeria.AAL%2029%201%202012.pdf.
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technological innovation, transfer and dissemination of technology, mutual advantage of

producers and users of technological knowledge. Also, it provides the balance between rights
and obligations in a manner conducive to social and economic welfare. In the opinion of J.
He, this balance as an objective is formulated ambiguously and, hence, cannot be actively
considered by the WTO panels10. I can agree with this suggestion in view of the complex
content of the balance as a needed objective. It appears that the balance is an idea rather than
a principle though, in reality, it is a principle rather than an idea. This is because, it
materialises in a multitude of provisions in flexible mechanisms (so-called flexibilities). The
provisions in the preamble and Article 7 reflect a new paradigm of economic development.
This paradigm postulates that economic development should be estimated in terms of human
development. According to Dutfield and Suthersanen, supplements, in turn, should entail
economic development by incorporating social welfare considerations and sustainable
development. Also, the goals of welfare and development achieved through technology
transfer, diffusion and application of technologies particularly meaningful for developing
countries have been embodied in flexible mechanisms of the TRIPS. These include;
compulsory licensing, parallel import, transitional period and so on. In respect to the
international technology transfer depending on patent system, much can be noted in Article
29.1 - regarding the disclosure requirement, Article 30 and 31 - concerning exceptions and
limitations to the exclusive rights, and Article 40 - with respect to control over anticompetitive practices in contractual licenses. It is well-known that for developing countries,
there is a desirable path to adopt technologies without paying monopoly rents through, for
example, compulsory licensing. The TRIPS assigns legal principles in accordance with which
the sovereignty and the independence of developing states to adopt decisions on exploiting
the flexibilities enumerated in Agreement are respected. Flexibilities give developing
countries the latitude to acquire technologies without paying the rights holders their full
reward for using protected result of intellectual activity. Appropriate measures provided for,
include the fact that, they are consistent with the provision of the Agreement, and may be
needed to prevent the abuse of IPRs rights by rights holders or to resort to practices that
unreasonably restrain trade, or adversely affect the international transfer of technology.

Article 66.2 of the TRIPS and problems of its implementation

The empirical generalizations of technology transfer to LDCs 11 show that technologies
protected by patents are not reaching them. As a result, the TRIPS Agreement, in itself, is
hardly capable to improve situation with technology acquisition for poor countries. However,
the TRIPS have great potential reflected in its preamble. This conclusion was recognized by
negotiators and became the basis for introducing Article 66.2, which obligates the developed
10 He, J. (2011). Developing countries pursuit of an intellectual property law
balance under the WTO TRIPS Agreement. Chinese Journal of International Law,
10(4), 827-863
11 Correa, C. M. (2007). Intellectual property in the LDCs: strategies for
enhancing technology transfer and dissemination. Background paper No. 4 for
UNCTAD, The Least Developed Countries Report (Pages: 40). Available at
http://unctad.org/Sections/ldc_ dir/docs/ldcr2007_Correa-en.pdf.
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countries to encourage the technology transfer to LDCs. As Article 66.2 stipulates,

Developed country Members shall provide incentives to enterprises and institutions in their
territories for the purpose of promoting and encouraging technology transfer to leastdeveloped country Members in order to enable them to create a sound and viable
technological base. It should mean that transferred technologies are protected by patents and
other intellectual property rights. Concomitantly, developed countries are required not to be
distressed concerning issues about the protection of IPRs to transfer technologies, but also to
intend that these technologies would promote technical development of developing countries.
Clearly, LDCs are in want of more effective implementation of requirements of Article 66.2.
The TRIPS Council in 1996 agreed that developed country members would provide annually
information on the technical cooperation activities in order to facilitate the Article 66.2
implementation [27]. The WTO has shown up certain concern on the implementation of
Article 66.2 in the Doha Decision on Implementation-Related Issues and Concerns that has
been adopted by the WTO Ministerial Conference in November 2001. Reaffirming that the
provisions of Article 66.2 of the TRIPS Agreement are mandatory, ministers agreed that the
TRIPS Council shall put in place mechanism for ensuring the monitoring and full
implementation of the obligations in question. In accordance with Para 11.2 of this Decision,
developed country members shall submit prior to the end of 2002, detailed report on the
functioning in practice of an activity to stimulate their enterprises for the transfer of
technology in pursuance of their commitments under Article 66.2. These submissions shall be
subject to review in the TRIPS Council and information shall be updated annually. The
TRIPS Council in 2003 also decided on the procedures for submission and reviewed the
reports of developed country members, and agreed on the list of issues to be reported 12.
Following the Decision of 19 February, developed countries have to submit reports on their
technology transfer incentives for implementation of Article 66.2 of the TRIPS Agreement on
an annual basis. Decision has detailed the information that developed countries have to
supply by the end of the year on how their incentives are functioning in practice. This
decision was reviewed in full when the TRIPS Council met in September and November
2003. At the same times, various decisions of the TRIPS Council have raised the question of
technology transfer and reiterated the commitment to implement Article 66.2. The WTO
Declaration on the TRIPS Agreement and public health13 also reaffirmed the commitment of
developed country members to provide incentives to their enterprises and institutions to
encourage and promote technology transfer to LDCs-members pursuant to Article 66.2. This
will provide a permanent updating sequence in the monitoring mechanism of Article 66.2
implementation and equal performance of decisions passed by the WTO with regards to
increasing effectiveness of technology transfer to LDCs [30, 31]. The implementation of the
provision in Article 66.2 is in a critical focus of experts and international organizations, for
example the WHO. As remarked by C. Correa, Article 66.2 does not provide assessment of
12 Implementation of Article 66.2 of the TRIPS Agreement. Decision of the
Council for TRIPS of 19 February 2003. WTO Document IP/C/28 (20 February
2003). Available at
http://www.wto.org/english/tratop_e/TRIPS_e/ta_docs_e/ipc28_e.pdf.
13 Doha Declaration on the TRIPS Agreement and Public Health (Doha
Declaration). WT/MIN(01)/DEC/2, adopted 20 November 2001, para 4. Available
at http://www.wto.org /english/thewto_e/minist_e/min01_e/mindecl_TRIPS_e.htm.
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nature and magnitude of the incentives that should be applied to enterprises and institutions in
developed countries in process of fostering technology transfer to developing countries. Some
experts have questioned the effectiveness of Article 66.2 because its provisions are restricted
by technology transfer to LDCs and are not applied to developing countries. S. Moon has
stressed that the submissions concerning to Article 66.2 by developed countries to the
Council of TRIPS were irregular and did not provide sufficiently detailed data to determine
whether Article 66.2 led to any additional incentive beyond business as usual 14, . In addition,
as noted in Para 7 of Report of European Communities, there are two factors that limited the
efforts of developed countries to encourage and promote transfer of technology to LDCs.
These factors are; (a) they do not own the vast majority of such technologies and (b) they
cannot force the private sector to transfer its technologies.
During the meeting of the
Council for TRIPS on February 17, 2011, some WTO Members made various proposals on
how to streamline the notification process under TRIPS Article 66.2. Issues raised by WTO
Members were related to underline the content and format of the Article 66.2 reporting
mechanism, as well as to substantive aspects of the implementation of its provision. As a
substantive aspect, Members raised questions about the scope and definition of transfer of
technology in general terms in relation to Article 66.2 in itself, and in other specific contexts.
Furthermore, attention was paid to the specificity of reported programmes provided for LDCs
in particular, the nature of incentives for technology transfer, and the choice of appropriate
technology in line with priority needs identified by the LDCs themselves. Moreover, WTO
Members have held in focus, the sustainably in ensuring continued access to technology in a
view of the distinction between incentives for technology transfer to be reported upon under
Article 66.2 and the technical assistance activities to be reported upon under Article 67 15.
Despite of lacks of Article 66.2 implementation, it is indispensable to state that the TRIPS
have, in general, great potential for realization of purported benefits, specifically from
technology transfer. As above-mentioned, definition of technology is enshrined in the
convention concluding provisions on technological cooperation. In the framework of the
implementation of Article 66.2 of the TRIPS Agreement, the lack of definition was viewed by
some commentators as allowing reporting Member to stretch the definition of technology
transfer to meet the obligations under that provision without making the necessary policy
changes. 3. Impact of the TRIPS on international technology transfer to LDCs After the
adoption of the TRIPS, issues on impact of stronger IPRs on technology transfer, especially
to developing countries and LDCs are largely in focus of attention by international
organizations and experts . As C. Correa explains, this interest arises from the continuing
technology gap between the North and South that is growing since the TRIPS was been
adopted. He stated that, the fear about the enhanced protection given to IPRs will not
effectively promote the development process but will rather limit instead, the access to
technology which has been voiced by many developing countries. The new circumstances of
14 Moon, S. (2008). Does TRIPS Art. 66.2 encourage technology transfer to LDCs?
An Analysis of Country Submissions to the TRIPS Council (1999-2007). ICTSDUNCTAD. Policy Brief No. 2, December 2008, Geneva (Pages: 12). Available at
http://www.iprsonline.org/New%202009 /Policy%20Briefs/policy-brief-2.pdf
15 Minutes of Meeting of the Council for TRIPS (17 February 2011). WTO
document IP/C/M/64, para 337. Available at http://www.wto.org/english/news_e
/news11_e/ trip_24oct11_e.htm.
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functioning concerning international technology transfer which is connected with the coming
of TRIPS into force resulted in new content of discussion on the impact of IPRs on
international technology transfer. It should be remembered that, developed countries having
initiated negotiation of the TRIPS have referred to arguments that stronger IPRs would entail
some positive effects, for example, the increasing of FDI and technology flows in developing
countries and the stimulating the domestic innovation. IPRs are the real vehicles of
technology transfer that can foster the exchange of technology. In a different way, stronger
IPRs protection is expected to expand formal channels of transfer and diffusion of
technology. At the same time, it is necessary to avoid overstating, insofar as pointed findings
is applied only to recipient countries with good imitative potential. In other cases, an
aftermath of such strengthening is zero. Most broadly, more strong IPRs protection is capable
of increasing the formal channels of technology transfer vie international trade, inflows of
FDI and licensing but into countries imitating technologies and having certain technologic
potential. Consequently, there seems to be a certain evidence for positive impact of IPRs on
formal technology transfer, at least, at the bilateral level. Thus, results of stronger IPRs
protection is ambiguous in theory and practice and depends on concrete conditions of
different countries. R. Rasian having analysed an experience of India, NIEs, Pakistan, Sri
Lanka and other countries has preferred to given conditions like the technological capabilities
and IPRs infrastructure. He has induced that poorer economies are unlikely to enjoy a
compliance with obligations under the TRIPS 16.
Like these conclusion R. Mashelkar
indicated that impact of the TRIPS provisions on developing countries will be according to
level of their economic and technology development. Middle-income countries, for example,
Brazil and Malaysia are likely to benefit from spur to local innovation under stronger IPRs.
Other countries, for example, India and Chine that are endowed with appropriate intellectual
property infrastructure, can gain in the long term some benefits from stronger IPRs. He
summarizes further that LDCs with their minimal level of innovative development will face
higher costs without the offsetting benefits Insofar as the modern world economy is the
economy of IP, international technology markets are very sensitive to broadening of scope of
IPRs protection, in particular to extension of patent duration. The significant broadening of
scope and duration covered, for example, in the TRIPS Agreement may lead to difficulties in
international transfer of technology. There are concerns about the impact of stronger IPRs
protection on international technology transfer. As a result, the potential of increasing of IPRs
protection is not always clear for developing countries . The reforming of patent systems in
developing countries in the direction of establishing stronger patent laws after the TRIPS
adoption have positive impact on technology import to these countries. In addition, there was
a reduction of possibilities to imitate the patented technologies. That has meant a strengthen
position of foreign firms but have not resulted in solving the problem of capacity building. K.
Maskus, for example, stressed that empirical evidence show that enforceable patents can
increase inward flows of international technology transfer in middleincome and large
developing countries but probably have little impact in LDCs. This conclusion is similar to B.
Hall's viewing in accordance with which stringent patent rights protection. Indeed, it is
believed that it encourages FDI and technology transfer to developing countries with middle
level of development, though, very little evidence exists to the effect that stronger patent
protection can encourage indigenous innovation in developing countries . Accordingly,
16 Rasiah, R. (2002). TRIPS an industrial technology development in East and
South Asia. The European Journal of Development Research, 14(1), 171-199
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international technology transfer should lead not only to technologies influx but also to
stimulate domestic innovation. Referring to previous quantitative researches, he reasoned that
IPRs do not often contribute to economic growth and development of countries with
threshold of GDP below US 3,400. Countries with low level of development have no
possibility to make R&D, appropriate potential to imitate, absorb, assimilate foreign
inventions in order to meet consumption needs and fulfil economic goals. Finally, the
reinforcing of IPRs protection in accordance with global standards restricts free use of
knowledge and technological public goods, as well as increases the cost of technology
acquisition. A positive impact of strengthening of IPRs protection on technology transfer
and, accordingly, on economic growth and innovation depend on economic and technology
level of concrete country. The demonstration of positive impacts in respect of non-innovative
developing countries, including LDCs, is likely to be the foremost problem of global policy
in area the of IPRs protection and of international technology transfer. With regards to the
poorest countries, stronger IPRs do not lead to all appearances of substantial benefits for
innovation growth and technology diffusion. Moreover, high level of administrative cost for
developing patent systems and potential abuse of market power in small closed markets along
with enforcement of the TRIPS will result in losing out from acceding to the TRIPS. In
addition, regime of stronger IPRs may create difficulties for technology imitation as
significant lever designed to develop the innovative potential of various industries in LDCs
with some slight technological potential. Into the bargain, the TRIPS restrict free use of
technologies and knowledge but these restrictions are not absolute. It should not be supposed
that LDCs are absolute antagonists of any protection of rights to results of intellectual
activity. As M. Islam stated, LDCs like Bangladesh could benefits from increasing demand of
IPRs protection especially for patented agricultural and pharmaceutical goods17. With the aid
of expert departures from that through appropriate rights, these countries can use their
comparative advantage of reverse-engineering, thereby adding value through adaptation of
existing technological goods accessed due to formal and non-formal channels. According to
Islam, the TRIPS Agreement however obliges its Members, irrespective of their level of
development, to strength IPRs protection, including comprehensive control over technology
diffusion. Indeed, as I suppose, the TRIPS increase position of rights holders. In
consequence, it must not be forgotten that this consolidation is balanced by provided
flexibilities, being a repercussion of compromise between developed and developing
countries. In consideration of these flexible mechanisms, the TRIPS should not be regarded
as international instrument serving only the interest of one group of countries.
Unconditionally, the logic of development within the international system of IPRs protection
is that protection is strengthening, but the latter includes development of regimes of limits
and exceptions as a part of flexibilities. That is why the strengthening of IPRs protection may
fully be consistent not only with interests of developing countries having succeeded in
technology and industrial development and transforming now to technologic donors, but also
with interests of LDCs. At the same time, regarding LDCs, indeed, there are many
forthcoming problems. A similar conclusion has been made by Falvey et al. having
investigated the effect of IPRs protection under the TRIPS standards on economic growth in
79 countries. These experts in their article have shown that such effect depends upon the level
17 Islam, M. T. (2010). TRIPS Agreement and economic development:
implications and challenges for least-developed countries like Bangladesh. Nordic
Journal of Commercial Law, [2010] 2, 1-48.
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of development, although positive, significant effect took place not only in high-income
countries but also in low-income countries. In the first case, economic growth was based on
encouraging innovation by stronger IPRs protection. Additionally, change in relation of LDCs
to IPRs protection led to enhancing the technology flows. Nevertheless, Falvey et al.
proposed that, middle-income countries may have offsetting losses and reduced scope for
imitation of technologies that a long period of time might have laid down in the background
of their economic growth .18In spite of the TRIPS, definition of sufficiency expressly refers to
stimulation of technology transfer which is rather concerned with the scope, use and
enforcement of IPRs. Therefore, mechanisms for implementing the balance between the IPRs
protection and the technology development stimulation through transfer of technology have
not been provided. This had led at the level of international organizations to discussions about
mechanisms of impact of IPRs upon technology transfer disciplines. In contrast to LDCs,
potential of the TRIPS for technologically and economically advanced developing countries,
certainly, will be realized in positive manner. Stronger IPRs protection seems to be a key
factor in order to foster the firms engaged in imitation of technology to shift their resources
towards generation domestic innovation and their commercialization, as well as the
development of high-tech business as a strategy for these countries. India, for example, sets
itself a task to transit to high tech export structure. This is a task of state and business. A. Lal
and R. Clement emphasised, among other things, that India is posed to generate new
business startups in the high tech area that can help it become a major competition in the
world economy [45, p. 96]. Countries having succeeded in innovative activities in recent
years, for example China, may obtain the benefits from stronger IPRs. In contrast to poorest
countries, advanced developing countries have possibilities to obtain the benefits from formal
channels of technology transfer and integration to R&D activities of developed countries.
This had led to a track of age where the policy of IPRs protection was at the national level
where various flexibilities have facilitated technology diffusion. The TRIPS Agreement has
also shifted the bargaining on flexibilities from the national to the international levels, having
uniformed these mechanisms within the international system of IPRs based on minimum
standards of protection. Reality created by the TRIPS Agreement obviously drives at question
that does benefit most from these changes. It is clear that developed countries, their
innovators and right holders, or rather TNCs, have benefitted most from these changes.
However, developing countries, in whole, continue to depend on either spill overs or formal
technology transfer from signed countries and their R&D centers. Increasing the strength of
IPRs protection in pursuant to the TRIPS reduces the possibility of technology transfer via
free of charge transmission from North to South. Thus, it restricts the means of obtaining
technologies by channels of formal transfer that is associated with substantial costs. It means
that there is a correlation between potential increasing of price and reduction of access to
available technologies, on the one hand, and high tech production, on the other hand. An
important element worth stressing is that, both advanced developing countries and LDCs
need informal channels of transfer of technologies that provide development or create their
innovative sector. This channel should not be diminished in its importance. According to C.
Correa, LDCs policies in the field of technology transfer should be focused on mobilizing the
informal modes of technology acquisition and should address the situation of firms at more
advanced stage of technological development. In addition, the given policies should include
18 Falvey, R., Foster, N. and D. Greenaway (2006). Intellectual property rights
and economic growth. Review of Development Economics, 10(4), 700-719.
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mechanisms to expand acquisition and to ensure the exploitation of equipment and

machinery, and should elevate bargaining capacity of the more advanced firms to obtain
technologies through licensing agreements . LDCs are more vulnerable to any strengthening
of IPRs protection. Therefore, they are very interested in extension of the transition period in
process of the TRIPS implementation. Article 66.1 clearly ascertains that the Council of
TRIPS shall, upon duly motivated request by a leastdeveloped country Members, accord
extensions of this period. This provision is premise on the right of LCDs to extent transitional
period. These countries are very interested in comprehensive stocktaking of technology
transfer obligations that have been accepted by developed countries. They should demand the
effective implementation of these obligations under Article 66.2 of the TRIPS. Nonetheless,
S. Moon detailed that, there was almost no evidence of new incentives that had been put in
place as result of Article 66.219. As the consequence of this problem, it is believed to be
needed to develop the new models of partnership between developed countries and LDCs.
This call of the times has been articulated by D. Foray brilliantly.20

Conclusion
Technology is one of the main stays in economic development of industries and nations.
Technology needs to be disseminated so that a large number of users have access to the
technology for developing new products and for further developing the technology. IPR plays
a very important role in technology transfer. For the success of technology transfer the
technology to be transferred needs to be protected by IPR. If the technology is not protected
by IPR then the success of the technology transfer depends solely on the contractual
obligations between the parties. Technology transfer based on the contractual agreements is
again prone to leakage of technology to the third parties thereby hindering effectiveness of
the technology transfer. If the technology is well-protected with patents, the effectiveness of
technology transfer can be monitored through licensing agreements. The problem of
international technology transfer to LDCs gains in special importance in the context of
transition to sustainable development. It is a clear that multilateral agreements on IPRs,
especially the TRIPS Agreement, are implicitly oriented to sustainable development due to
postulating the balance between interests of public and interests of rights holders. Continuing
discussions within global policy in the area of international technology transfer to LDCs will
continue to concentrate on adapting the TRIPS provisions to new tasks of international
development. These are done with regard to the potential use of Article 66.2 and other TRIPS
mechanisms to facilitate the transfer of sustainable/clear technologies to LDCs. In the end,
there should be wider discussions of these issues.
19 Moon, S. (2011). Meaningful Technology transfer to the LDCs: A Proposal for a
Monitoring Mechanism for TRIPS Article 66.2. Policy Brief No 9. International
Center for Trade and Sustainable Development.
20 Foray, D. (2009). Technology transfer in the TRIPS Age: the need for new
types of partnerships between the least developed and most advanced
economies. ICTSD, Issue paper No. 23, Geneva (Pages: 75). Available at
http://www.ictsd.org/themes/intellectual-properties/ technology-transfer-in-theTRIPS-age-the-need-for-new-types-of.
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BIBLIOGRAPHY
Websites
1. https://en.wikipedia.org/wiki/Technology_transfer
2. https://www.wto.org/english/tratop_e/trips_e/techtransfer_e.htm
Articles:

1. Trips Agreement, International technology transfer and Least Developed Countries by

Mark. V. Shugurov
2. The Role of Intellectual Property Rights in Technology Transfer and Economic
Growth: Theory and Evidence By: Rod Falvey
3. The Relationship Between IP, Technology Transfer, and Development available at
http://www.ip-watch.org/2010/08/30/the-relationship-between-ip-technology-transferand-development/
4. Technology Transfer in the TRIPS Age: The Need for New Types of Partnerships
between the Least Developed and Most Advanced Economies by: Dominique Foray
Books:

1. International Technology transfer to developing countries by: Kamal Saggi

2. Technology Transfer and Intellectual Propety Rights by : Linsu Kim
3. Methodological and Technological Issues in Technology Transfer By: Bert Metz

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