India: Licensing And Technology Transfer: A Glance On Indian Scenario

Last Updated: 13 October 2014
Article by Priyanka Rastogi

Most Read Contributor in India, September 2016


Technology Transfer (also called Transfer of Technology (TOT) and Technology Commercialization)1 are the processes by which the information or knowledge related to the technological aspects travel within the group or between the organizations or entity. Taking this to the broader scenario, give rise to International technology transfer in which the knowledge travels in between the countries, which is not only limited to the Knowledge and information, rather includes skill transferring, methods of manufacturing, physical assets, know-how, and other technical aspects, and henceforth helps in further development of the technology and innovation, by effectively utilizing the technology transferred and finally incorporating it.

Technology transfer has been used in the movements of technology from the laboratory to industry or from one application to another domain application or taking developing countries into consideration technology transfer helps in growing access to technologies which are related to other developed countries and henceforth helps in approaching towards the newer technologies and inventions i.e. from Developed to developing countries.

On the other hand licensing is allowance granted by the patent owner to another person or organization for using the patented invention on agreed terms and conditions, while the patent owner continues maintaining his ownership to the patent and hereafter becomes the source of income by receiving the predetermined royalties or as per the condition.

So by combining the concept of the technology transfer with the licensing one can help in taking the benefit of the technology research that has been done previously, as licensing creates the permissible structure for the transfer of the technology to a larger assembly of researchers and engineers, which will help in saving the expenses of conducting the research and the costs of maintaining development activities or facilities and hence will help in the further development of the technology which has already been done.

As now a days in the era of the advancement in the technologies there are many technologies which with the combination with the other technologies is giving birth to the other new advent technologies. so here the licensing do play the important role in providing the legal platform to utilize the combination of the technologies made or discovered by the other persons or the organization which has been created earlier, and hereafter prevents from wastage of the time and the research cost incurred in developing the earlier inventions.


Technology transfer can be classified into vertical and horizontal technology transfer2

Vertical transfer refers to transfer of technology where transmission of new technologies is done from the generation of new technology during the research and development programs into the science and technology organizations, for instance, to the application related to the industrial and agricultural sectors, or we can say that vertical transfer is the technology transfer commencing from basic research to applied research, from applied research to development followed by development to production.

While the horizontal technology transfer is the movement of a well-known technology from one equipped environment to another (from one company to another) or say refers to the transfer and use of technology used in one place or organization to another place or organization.

As discussed above generally developed countries follow the route:-

Research -> Development -> Design -> Production

While less advanced and developing countries follow the route:-

Production -> Design -> Development -> Research

Generally there are the reverse trends in the developing countries because the path to be followed depends upon the transfer, absorption, and adaptation of existing technology

(Habibie (1990), often referred to as the architect of the Indonesian aircraft industry, states that, "technology receivers must be prepared to implement manufacturing plans on a step-by step basis, with the ultimate objective of eventually matching the added-value percentage obtained by the technology transferring firm." He refers to such an approach as "progressive manufacturing" and popularized the slogan, "begin at the end and end at the beginning" implying that a transferee firm should start with production and move backwards to research.)

Today in the era of advent in technology one could choose any of the routes of the technology transfer which depends upon how the technology advancement chains of the transferor and transferee are associated.


The advantages related to technology transfer comprises of the essential gain to the public who benefits from the manufactured goods that get to the market and ultimately the availability of the jobs which results from the improvement and sale of the products so formed. And hence it encourages use of technology developed and the benefiting to the society development which comes from the revenue of the tax payers. And escalating visibility to researchers and allows researcher to generate and earn royalty income and henceforth attaining financial profits for the government and the employees from royalty payments for those technology transfers that involve patent licenses.

Moreover resulting in commercialization of the researches and the discoveries made, which was the course of the investment done for the development and being protected by the patent. Hereafter all the Investments done in the course of the development in intellectual property are returned to the public through products made for the public, opportunity of more employment, and revenue in the form of taxes.

Technology transfer strengthens industry by identifying new business opportunities which contributes to enhancing the know-how and competitiveness of the technology providers, which ultimately results in broadening the business area and re-focusing to the technologies and systems to serve several different fields. In addition, technology transfer promotes the wider use and awareness of technology and systems.

Technology transfer brings economic benefits by increasing revenues for both technology donors and receiver's benefits with new and better products, processes, and services that lead to increased efficiency and effectiveness, greater market share and increased profits.

Moreover technology transfer helps in earning rewards which is above and beyond the regular salary which is received through patents, licenses, and other technology transfer awards which help in benefiting intellectually and professionally through working collaboratively with their peers in the industrial sector.


As technology transfer is keen or meant for the business oriented activity, hence forth there can be the chances to have financial or commercial risk, as we are well aware that Licences can generate the income, but patent application which are not licensed will only cost money.

Even when the transfer programme related to the technology transfer is successful or in particular after technology transfer institutional tensions may arise within the organization which may be in between the recipient of licensing income and those who know they will never make utilizable inventions. For the sake of remedy in those circumstances Institutional policies can be made aiming to have partial rearrangement of income received by license between all research groups but, using this strategy may not eradicate the problem rather in most of the cases discoverer will be frustrated or disappointed because the income that they have earned is given to other groups. Technology transfer activities may put researchers in conflict of interest situations, especially when the transfer involves the creation of the spin- off company, hence Institutions should be aware of these possible dangers.

Moreover problem can be because of non performance of licensee. And may be the licensee has limited chances beyond the license scope unless future enhancements to patent included in initial agreement and Unrealistic expectations and demands from licensor.


Technology in India is growing exponentially and has played an important role in all round development and growth of economy in the country, India has opted for a wise mix of original and imported technology. Henceforth "Technology transfer" plays a very important role and is generally covered by a technology transfer agreement.

Developing countries like India generally not follow the usual path for development with regard to technologies but use their advantage in the cutting edge technology options which is now available and put the tools to use this modern technology.

Technology transfer is assumed to get benefits from R&D which is shared with the developing and underdeveloped countries , so taking this to the point of consideration National research laboratories is been constructed by the Indian government for the purpose of R&D which is yet to be commenced by the private sectors.

India generally comprises of Small and medium enterprises and is growing since liberalization, which has resulted in growth of The multinational enterprises, which in turn is competing with the international companies which has enhanced the confidence of India. Not only confined to the pharmaceuticals but is broadly categorized in other areas too such as agriculture, dairy and other technologies.

Government of India is in the verge to open Technology Transfer Offices, Universities, institutions which will be funded by central government and will acts as mechanism for transferring or exporting the research conducted and its outcome to the desired place.

Though some of the Indian Institutes have been already commercializing their research and are successful in technology transfer in which they have been licensed as technologies to industry. Moreover, numerous cases of technology transfer are seen in India by various well-known institutions.


Technology transfer and its licensing have played a crucial role in all round development and the advent of the technology which in results help in the development of the economy of the country. Hence forth helps in creating the wealth to the country.

India as a developing country need to work on the technology development and technology transfer and needs to make a building strategy comprising of the construction of new offices related to technology transfer and to make youngsters aware to the benefits related to the technology transfer, by establishing the specified universities and henceforth increasing the pace of the technology transfer and technical research and development in technical perspective.

Finally as discussed we can conclude that there is the possible advantage and disadvantage of the technology transfer. But we have to see this in the broader aspect so that our country as well as the citizen of our country should be benefited.



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