Introduction
Technology is an essential element in today's world due to the ease it provides in almost every aspect of human activity. As a result of its importance, it is continuously evolving in order to provide more effective and suitable solutions to problems. Technology Transfer Agreement (TTA) is a means through which entities and individuals can create business relationships in order to exploit the various opportunities available in the technology sector.
Technology Transfer Agreements (TTAs) are Agreements entered into between a party which holds certain rights associated with a technology (transferor) and another party (the transferee), in which the transferor transfers certain rights or interests associated with the technology to the other party usually for the purpose of exploiting such technology on a larger scale or in another jurisdiction.
The objectives sought to be achieved by the parties to the Agreement, determines Introduction the type of TTA to be entered into. Where the transferor intends to be a key player in the exploitation of the technology on a large scale (which requires heavy financing) a joint venture TTA may be entered into. Where it seeks to exploit such invention through the transferee on a larger scale covering another or different jurisdictions without being a major player in the other jurisdictions, a franchise TTA may be created.
TTAs can also serve as a medium for investment. Similarly, the type of TTA which may be entered into by an investor depends on the objective sought to be achieved. For instance, where the investor seeks to provide financing for the exploitation of the technology in return for a stake in the technology or a percentage of profit from such exploitation, it may consider a joint venture TTA and where it has the human capital and facilities to exploit such technology across certain jurisdictions, a franchise TTA may be entered into.
Due to various factors which discourage foreign investments in Nigeria including the high cost of establishing subsidiaries, TTAs are the vehicle through which a number of businesses have established their presence in Nigeria.
In Nigeria, the National Office for Technology Acquisition and Promotion (NOTAP) is responsible for registering all agreements for the transfer of technology into Nigeria and also ensuring that TTAs registered in Nigeria are economically and technologically favourable to Nigeria1. This article will highlight the various categories of Agreements needed and further attempt to assesses whether TTAs indeed promote the economic and technological growth of Nigeria.
The NOTAP Guidelines2 for the purpose of registration, categorizes TTAs as follows
Licensing Agreements3
Licensing Agreements are Agreements entered into between a transferor and a transferee where the transferor grants certain intellectual property rights such as patents, trademarks and designs in a technology to the transferee to sell, market or exploit such technology commercially.
Patents are registered inventions while trademarks and designs are distinctive marks, signs, logos and patterns associated with a brand or business.
Where a patent right is sought, parties enter into a Patent Licensing Agreement and where a trademark right is desired, a Trademark Licensing Agreement is entered into.
NOTAP requires all Trademark License Agreements to be accompanied with a Technical Know - How Agreement in order to ensure that the products for which the trademark is granted meets the required standard4.
For a Trademark License Agreement to be registered, the trademark must be recognized internationally and registered in Nigeria5. Furthermore, for a transferor or its affiliate to grant trademark rights to a transferee in Nigeria, they must not own more than 75% of the equity of the transferee company6. Trademark Licensing Agreements are registered for a period of 3 years and are renewable.7
Some businesses which have established their presence in Nigeria through licensing are Cadbury Nigeria, General Motors Nigeria and Nigerian Bottling Company.
Technical Know- How Agreements8
These are Agreements entered into for the transfer of the technical knowledge associated with a certain technology. It is an Agreement usually for the provision of skills, knowledge and information on the raw materials sourcing, processing and manufacturing of the products.
The technology fee chargeable under this type of Agreement is usually based on a percentage of the turnover of the transferee 02 and ranges between 0 - 5% of the net sales of the transferee depending on the complexity of the technology involved9. It is usually registered for a period of 3 years taking into consideration the period of earning turnover or profit from the transferee company10. It may be renewable for a subsequent period of 3 years".
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Footnotes
Section 4 of the National Office for Technology Acquisition and Promotion Act, Cap N68 LFN, 2004.
Revised Guidelines for Registration and Monitoring of Technology Transfer Agreements in Nigeria, 2020.
2.2.1 of the NOTAP Revised Guidelines For Registration and Monitoring of Technology Transfer Agreements in Nigeria.
2.2.1 of the NOTAP Revised Guidelines For Registration and Monitoring of Technology Transfer Agreements in Nigeria.
Ibid.
Ibid.
Ibid.
2.2.2 of the NOTAP Revised Guidelines For Registration and Monitoring of Technology Transfer Agreements in Nigeria.
Ibid.
2.2.2 of the NOTAP Revised Guidelines For Registration and Monitoring of Technology Transfer Agreements in Nigeria.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
