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Technology Assignment Agreement

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A Technology Assignment Agreement is a document that outlines the transfer of intellectual property rights from one party to another in relation to a specific technology or innovation. This legally binding agreement specifies the terms and conditions under which the technology is being assigned, ensuring clarity and protection for all parties involved.

It plays an important role in defining ownership, usage rights, and responsibilities, ultimately safeguarding the interests of both the assignor and the assignee.

Do you need a Technology Assignment Agreement?

The answer is most likely yes.

A technology assignment agreement is essential for transferring ownership of intellectual property rights related to technology projects. It protects both parties involved by clearly outlining ownership, usage rights, and responsibilities. Having a legally binding agreement in place can prevent disputes and ensure a smooth collaboration process.

So, if you are in need of clarity and protection in your technology projects, a technology assignment agreement is a must-have.

Read on to learn more about Technology Assignment Agreements, including:

What's included in a Technology Assignment Agreement?

How do i write a technology assignment agreement.

• Frequently asked questions about Technology Assignment Agreements

Here are some key components that are typically included in a Technology Assignment Agreement:

• Introduction
• Definition of Technology
• Assignment of Rights
• Consideration and Payment Terms
• Representations and Warranties
• Confidentiality
• Indemnification
• Further Assurances
• Governing Law and Jurisdiction
• Entire Agreement and Amendments
• Severability

Below we'll go over the common provisions and include sample language for each to help guide you.

1. Introduction

The introduction sets the stage by clearly outlining the key players involved in the agreement - the assignor and the assignee, along with the date of the agreement.

The primary objective of the agreement is to facilitate the seamless transfer of ownership of specific technology from the assignor to the assignee. This transfer of ownership is crucial for both parties to establish a clear and legal framework for the utilization and management of the technology in question.

This Technology Assignment Agreement ('Agreement') is made effective as of [Date], by and between [Assignor's Name], ('Assignor') and [Assignee's Name], ('Assignee').

2. Definition of Technology

This section provides a comprehensive and detailed description of the specific technology, intellectual property, or innovations being transferred in the Technology Assignment Agreement. It includes a thorough breakdown of any patents, copyrights, software, or proprietary information that is being transferred from the assignor to the assignee.

This detailed description ensures that both parties have a clear understanding of the scope and nature of the technology being assigned, setting the stage for a seamless transfer of ownership.

Technology' shall mean the proprietary technology, software, and intellectual property described in Exhibit A, including all related patents, copyrights, trade secrets, and know-how.

3. Assignment of Rights

This section clearly outlines the comprehensive transfer of rights, title, and interest in the technology from the assignor to the assignee. It specifies the exact scope and limitations of the rights being assigned, ensuring a thorough and precise transfer of ownership.

By detailing the full extent of the rights being transferred, both parties can establish a clear and legally binding agreement that sets the foundation for the seamless utilization and management of the technology in question.

Assignor hereby transfers and assigns to Assignee all rights, title, and interest in and to the Technology, throughout the universe, in perpetuity.

4. Consideration and Payment Terms

In this clause, you can specify the compensation or payment provided in exchange for the technology rights, including any upfront payments, royalties, or other financial terms agreed upon by the parties. This section outlines the financial considerations that solidify the agreement, ensuring that both parties are clear on the value exchange for the transfer of technology ownership.

It includes details on the total sum to be paid, the timeline for payments, any additional royalties or licensing fees, and any other financial arrangements that have been mutually agreed upon. This financial aspect of the Technology Assignment Agreement plays a crucial role in establishing a fair and equitable transaction between the assignor and the assignee.

In consideration of the rights assigned hereunder, Assignee agrees to pay Assignor a sum of [Amount], payable upon execution of this Agreement, and [additional payment terms].

5. Representations and Warranties

This part of the contract describes that both parties are required to provide statements affirming their authority to enter into the agreement, ensuring that they have the legal capacity and authorization to transfer ownership of the technology. Additionally, they must confirm the originality of the technology being assigned, asserting that it is their own creation and not a reproduction or imitation of any existing intellectual property.

Furthermore, both parties must declare the absence of any infringement on third-party rights, guaranteeing that the technology being transferred does not violate any patents, copyrights, or proprietary information held by others. These statements are crucial to establishing the legitimacy and integrity of the technology assignment agreement.

Assignor represents and warrants that it is the sole owner of the Technology and has the full authority to assign the Technology as contemplated by this Agreement.

6. Confidentiality

This section outlines that both parties are bound by a strict obligation to uphold the confidentiality of any proprietary information shared during the course of this agreement. This provision emphasizes the critical importance of safeguarding sensitive data and intellectual property, outlining the specific circumstances under which confidential information may be disclosed.

By establishing clear guidelines for the protection of proprietary information, both parties can ensure the integrity and security of the technology being transferred.

Both parties agree to maintain the confidentiality of proprietary information disclosed during the term of this Agreement and shall not disclose such information without prior written consent.

7. Indemnification

This section requires one party to compensate the other for any losses, damages, or liabilities arising from breaches of the agreement or misrepresentations about the technology. This provision serves as a crucial safeguard to ensure accountability and fairness in the event of any discrepancies or discrepancies in the transfer of technology ownership.

By holding each party responsible for upholding their end of the agreement, it promotes transparency and trust in the business relationship, ultimately protecting the interests of both the assignor and the assignee.

Assignee agrees to indemnify, defend, and hold harmless Assignor from any claims, damages, or liabilities arising from Assignee's use of the Technology.

8. Further Assurances

This section emphasizes the mutual commitment of both parties to actively cooperate and take any additional steps needed to fully implement and comply with the terms of the agreement. This includes the willingness to promptly execute any supplementary documents, provide any necessary information, or undertake any further actions that may be essential to ensure the successful transfer and utilization of the technology as outlined in the Technology Assignment Agreement.

By demonstrating a shared dedication to fulfilling all requirements and obligations, both parties can uphold the integrity and effectiveness of the agreement, fostering a collaborative and productive relationship.

Both parties agree to perform any further acts and execute any documents that may be reasonably necessary to carry out the provisions of this Agreement.

9. Governing Law and Jurisdiction

In this section, you can specify the laws that govern the agreement and the jurisdiction under which any disputes will be resolved. This section serves as a crucial component of the Technology Assignment Agreement, establishing the legal framework within which the agreement operates.

By clearly outlining the governing laws and jurisdiction, both parties can ensure that any potential conflicts or disputes are addressed in a fair and consistent manner. This provision helps to maintain clarity and transparency in the agreement, laying the groundwork for a smooth and effective resolution of any issues that may arise.

This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflict of law provisions.

10. Entire Agreement and Amendments

This clause states that the agreement constitutes the entire understanding between the parties regarding the subject matter and can only be amended in writing with the consent of both parties, thereby safeguarding the clarity and integrity of the agreement.

Any modifications or alterations to the terms must be agreed upon by both parties in written form, ensuring that any changes are meticulously documented and mutually acknowledged to maintain the transparency and validity of the Technology Assignment Agreement.

11. Severability

In the event that any provision of this Agreement is deemed invalid, illegal, or unenforceable, it is agreed that the remaining provisions shall remain valid and enforceable, ensuring that the essence and intent of the agreement are preserved.

This provision serves as a safeguard to maintain the overall effectiveness and functionality of the agreement, even in the face of potential challenges or discrepancies.

12. Signatures

The final part where both parties provide their signatures to confirm agreement to the terms laid out serves as the ultimate seal of commitment and understanding in the Technology Assignment Agreement. By signing the document, both the assignor and the assignee signify their acknowledgment and acceptance of the outlined terms, solidifying their mutual agreement and dedication to the successful transfer of technology ownership.

This act of signing not only signifies a legal obligation but also represents a shared commitment to upholding the integrity and effectiveness of the agreement, fostering a collaborative and trusting relationship between the parties involved.

Frequently Asked Questions

Can technology be assigned temporarily through this agreement.

Typically, a Technology Assignment Agreement is used for permanent transfers of rights. For temporary rights transfers, a licensing agreement may be more appropriate. However, specifics can vary, so it's important to specify the nature of the assignment in the agreement.

How is the value of the technology determined?

The value can be determined through various means, including negotiation between the parties, independent valuation by an expert, or based on the projected revenue or cost savings the technology will generate. The agreed-upon value will influence the consideration or compensation detailed in the agreement.

What happens if the technology doesn’t perform as expected after the assignment?

The agreement should include representations and warranties that address the functionality and performance of the technology. If the technology fails to meet these, the assignee may have recourse under these provisions, which could include indemnification or the right to terminate the agreement.

Can the assignor retain any rights to the technology?

Yes, the assignor can negotiate to retain specific rights, such as the right to use the technology for certain purposes. These retained rights should be clearly outlined in the assignment section of the agreement.

What if there are undisclosed encumbrances on the technology?

The agreement typically includes representations and warranties by the assignor regarding the absence of encumbrances. If encumbrances are later discovered, the assignee may seek indemnification or other remedies as provided in the agreement.

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How is technology transferred?

By: Coral Navarro

December 5, 2022

The 4th industrial revolution has brought game-changing technological developments across all industries. In this era, technology transfer acts as a value driver encouraging the entrepreneurial technology ecosystem to participate in innovation and create synergies to promote new developments.

Intangible assets are crucial in the knowledge economy; they generate broader business models and improve collaboration and advancement in technologies. Intellectual Property (IP) protection enhances the commercialization of technologies by providing a solid market penetration strategy, recognition, and comprehensive control over your competitive advantage.

The market success of inventions drives innovation and secures investment toward new developments. This is possible due to technology transfer, the process that allows the transfer of technology and knowledge, such as inventions and scientific discoveries, from one organization or institution to another, enabling the development of new services and purchasable goods. How does it work and how can you make it a reality?

The following steps provide a comprehensive view of the process.

The first step is to analyze the technology and its fields of application, followed by selecting the adequate transfer method and defining a market strategy for its deployment. Finally, agreements for technology exploitation are negotiated.

Analise the technology and its IP rights

To analyze the content of the technology given a technology transfer process we first need a clear identification of its IP rights. It is crucial to know our assets, how they are protected, and their actual value.  An economic legal and technical evaluation of the technology will help to identify all the related IP rights, to see if they are adequately protected, and to obtain an objective value for further commercialization.

For example, if we are planning on transferring a digital platform, is it duly protected? Are other protection methods needed? What is the objective value of the technology? The analysis must cover all these aspects and show the platform IP rights, such as copyright, trade secret, and trademark, and their status.

Choose the transfer method

Now we shall look at the methods and mechanisms or types of agreements to transfer technology and knowledge.

-Direct Assignment or Direct Transfer: Consists of the complete transfer of proprietary technology that implies loss of ownership of the technology.

-License or Franchise Agreement: Involves the transfer of IP rights under established conditions, such as scope, term, and territory, in exchange for an agreed royalty without losing the ownership.

-Product Sharing Agreement or Joint venture: The development uses resources and technologies from the owner and an industrial partner, to develop a production process and the consequent sharing of the outcomes.

-Turnkey Agreement: When a developer agrees to complete the technology, under an initial investment, so that it is ready for use when delivered to the buyer.

-Spin-off company:  Creation of a company through which knowledge and technology and IP Rights are transferred by the parties, and research results are commercially exploited by both.

-M&A: Technology can be transferred in M&A transactions like any other asset of the company.

The methods for technology transfer can be divided into vertical transfer or horizontal transfer.

The vertical transfer is the method from the initial development up to the market. It allows transferring R&D activities into a commercial environment. It is a process that often involves the management of IP rights and may also require obtaining funds and know-how for the technology to develop into finished goods or services. For example. This is usually internal technology transfer. A good example is the creation of a Spinoff company to develop the technology.

Whilst horizontal transfer applies to a particular technology that already exists but can be available for different services or new applications in products. It corresponds to external technology transfer, for example, it could consist of a license agreement for product distribution.

Market Strategy & Commercialization

The market strategy must be based on the market interest in the technology, finding all possible product-market fits. With these fields identified, for each, we must review relevant competitors, possible interested parties, and strategic points such as barriers to market entry, economic viability in the market, and if legal authorizations to operate are required. With a market strategy, the next step is to connect with potentially interested parties, such as possible licensees and collaborators interested in our technology.

Negotiations & Agreements

Finally, we will enter into negotiations with the potentially interested parties which will, fortunately, end up with an agreement for the transfer and the technology’s further exploitation.

Depending on the phase of development of the technology, the economic return will differ, as the holder of the technology will have more or less power of negotiation. This implies that the market value of the technology is not going to be the same at the initial state of development as when the technology is ready to offer newly developed products.

Also, the IP protection level will affect the outcome of the benefit agreed upon. This is due to the difference in the value that an adequately protected IP portfolio offers, considering the risks of non-protected assets or the need for investment to continue with non-reliable or non-profitable developments.

Technology transfer is an open door for innovation and the development of revolutionary ideas. It helps to know the real value of technology and IP rights by their commercialization, allowing inventions and scientific and technological discoveries to hit the market and become profitable.

Publications

Technology Transfer Agreements; Don’t Be an Amateur

It used to be that Olympic athletes competed only for the love of the game, unconcerned about professional and commercial success.  So too, it used to be that university professors and government researchers toiled in laboratories for the Common Good, unconcerned about the commercial success their discoveries and talents might yield.

Both of these situations have changed.  The Olympics have gone commercial and professional.  So have the labs.  Universities have discovered that endowments can grow as their own research evolves into a new drug, procedure or computer program.  The Federal Government has discovered that it can retain researchers while reaping more benefits from its grants by allowing the commercialization of discoveries it has paid for.

Maryland lawyers will likely have the opportunity to represent a client involved in the disposition of these discoveries due to the concentration in the region of governmental research facilities and research universities.  Thus, lawyers in the area should have a familiarity with the strategies and basics of handling these matters.

The principal means of allocating rights in discoveries is through a “Technology Transfer.”  While a “Tech Transfer” agreement can relate to any type of license or assignment of intellectual property among any parties, Tech Transfer agreements have become known as -- and this article discusses -- the type of agreement by which a university grants rights in its research to a commercial endeavor.  These agreements are the roadmap of how the discovery gets from the lab to the market.

A Tech Transfer agreement is like any other intellectual property assignment or license, but has a twist.  A “regular” assignment or license of a patent, copyright, trade secret or trademark generally considers only the parties involved.  However, a Tech Transfer must recognize outside interests.  If the Federal Government funded the research, which is a very common practice -- the Government must retain a license to use the technology.  Likewise, when a university exploits the intellectual property, it must consider the rights of the researcher and others at the university, as governed by policies the university probably has in place for all inventions and discoveries.

The Tech Transfer agreement must address the concerns of the university, the researcher, the Government and the entity taking the discoveries to market.  Issues to be resolved in a Tech Transfer agreement include who retains what rights in the discoveries, who directs the future direction of the research and, of course, who gets paid what amount.

The remainder of this article discusses issues a lawyer should address when confronted with a client -- whether a researcher, a university or a commercial entity involved in a Tech Transfer agreement.

First, a bit of history.

Although there has been a recent surge in technology and protection of intellectual property rights, making Tech Transfer agreements more commonplace, the concept of technology transfer is not new. Transferring technology between universities and industry has existed in the United States since at least the 1920’s, when a few universities were commercializing their discoveries.  Technology transfers became of interest in the late 1940’s, when the Manhattan Project proved the value of university research to national defense.  An influential 1945 report to the President titled “Science -- The Endless Frontier” championed the position that university research could be used as a catalyst for economic expansion by increasing the amount of technology available to industry.

The major reason for the current wave of “discovery commercialization” was the Patent and Trademark Law Amendments Act of 1980, or Bayh-Dole Act, which allowed for the transfer of technology between researchers and commercial entities.  The premise of this Act is that inventions created using federal funding should be licensed in a way that promotes their commercial development for the public benefit.  The Act accomplishes this goal primarily by allowing parties developing federally funded technology to retain patents in this research, while retaining in the government a right to use the invention.

Complying with Bayh-Dole

The Act applies to all inventions either conceived or reduced to practice using a federal grant for any portion of the funding. Since most university technology relies on some amount of government funding, applicable university policy must be consistent with the Bayh-Dole Act.

If a researcher using government funds creates an invention, the university must disclose the invention to the government within two months of the university becoming aware of the discovery.  The university then has two years to decide whether or not it wants to retain title to the invention.  If it chooses to retain title, the university must file a United States patent application within one year of this election, stating within the application that the Government has rights in the application.  Within ten months of the U.S. patent application, the university must indicate whether it wishes to file foreign patent applications.

Bayh-Dole also specifies that the university must grant the U.S. government a non-exclusive, irrevocable license to use the invention throughout the world on behalf of the U.S.  The university may license the patent to commercial entities, but the university must give preference to small businesses (less than 500 workers) where feasible, and licensees must substantially manufacture products based on the license in the United States (when feasible).  Generally, the university may not assign its entire right in the patent to a third party.

The government also retains control over assuring that the patent is used efficiently.  The patent-holding university is required to submit periodic patent efficiency reports to the government.  If the patent is not being used within a reasonable time or the use does not meet other guidelines, the government retains the right either to force the university to license a third party, or to take title of the patent itself.

Even with these constraints, Bayh-Dole has generally been deemed a success.  The Act has promoted a substantial transfer of technology from universities through the private sector to the public, with the result being a net benefit to the public.

What the agreement should say

As in any agreement, parties to a Tech Transfer agreement have divergent views of what makes an agreement beneficial to them.  The university/inventor would prefer to retain title to the discovery, license rights to use the discovery, and supply information and technical assistance (for a fee) to the user.  Conversely, the developer/user would prefer title to the invention to be assigned (not licensed) to it, with technical assistance at a minimum (or at least a minimum fee).

Any agreement would include basic contract principles as well as provisions respecting the various intellectual property concerns.  The agreement could be in the structure of an assignment, a license, or a joint venture. In any structure, the agreement should address the important provisions discussed below.

Be careful in the Recitals that unless it is certain a party owns all rights being transferred, such ownership is not stated definitively.  The phrase “Party A owns all patents” may be seen as a representation by party A or an admission by Party B, when in fact neither party intended such promise or admission.

The granting clause should clearly outline the intellectual property rights to be transferred.  Each patent, copyright, trade secret and trademark, should be addressed.  They can each be granted in different ways, or all in the same manner.  The section should address whether each aspect of IP is being assigned or licensed; whether the grant is exclusive or not (for licenses); the geographical areas covered; and whether there are limits on the type or quantity of the use that the grantee can make.

Payment for the grant can be a flat fee, or based on sales, production, or other measurable aspects of the deal.  Universities often receive advances which are later applied against a running royalty.  Royalty rates vary depending on the efficacy of the invention, the proposed market, the breadth of use allowed and any other portion of the agreement.  There is no “set” or “usual” rate.  Compensation can also be in the form of stock issued at the time of the transaction, or stock options.  The payment provisions should also consider who will pay the underlying inventor and who will pay the continuing fees for registering the patent and maintaining the registration.

In a license, the issue of quality control always arises.  Sometimes these provisions can be extensive in which the development must pass through a series of reviews with the university, with the opportunity for the university to suggest or demand revisions to the product.  Sometimes the university will let the developer run with the project with little or no oversight.

The grantor will always want to make as few representations and warranties as possible about the effectiveness and ownership of the technology.  The grantee will always want strong promises that the product will work as described and will not infringe on the rights of any third party.  Good negotiations determine where this issue is resolved.

Any agreement must focus on indemnification and allocation of risk.  Risk of loss always poses a prickly situation.  The invention developed by a researcher often is related to health or medicine.  If the product works properly, everyone benefits.  If the product malfunctions or does not work as expected, plaintiffs look for liability in what might have been a tragic accident.  It is not surprising that universities attempt to gain adequate assurances of protection -- either through confidence in the product, insurance, indemnification, disassociation from the product, or all of these.  Avoiding the risk of loss is one reason why the university might want to assign all rights out of its control, so the university cannot be said to have any connection with a product that later malfunctions.

In an exclusive license, the scope of performance is always an issue to the university.  The university must have some assurance that the licensee is working hard and making the most out of the rights.  Common methods to hold the licensee’s feet to the fire are minimum sales levels, minimum royalties, or adherence to a specified development or marketing plan.  Divergence from these goals can be a breach that would allow the university to find a new developer.  “Best efforts” clauses also work to some degree, but unless well-defined, they become less definite in measuring performance than a set threshold.

Because of ongoing development by the research team and the developer, confidentiality clauses are also essential to protect the secrecy of the technology being transferred, and all of the background information that may not be specifically transferred.  The degree of sensitivity of the technology dictates whether and how the parties must mark the information, where it must be stored, who can review it, and what employees and agents must sign separate confidentiality agreements.

The parties’ activities likely will advance the science already discovered, and the Tech Transfer agreement must address who retains the rights in any technology which evolves out of the progress.

Non-competition can also lead to serious discussions and the parties should determine how, if at all, they wish to limit the rights of either party to deal with third parties on similar technologies.

Both parties have to decide how personal the relationship is with the other side, and whether assignments and sub-licenses of the technology or the agreement itself is allowed.

When patents are involved, there are special considerations.  Be wary of extending royalty payments beyond the term of the underlying patent, charging royalties that unfairly discriminate against certain groups, inserting clauses that prohibit a licensee from challenging the validity of the underlying patent or attempting to extend the underlying patent to prohibit actions of the grantee beyond that allowable by patent law.  These actions may violate law and/or public policy.

Any agreement must also consider the international nature of the proposed use.  In the United States a patent can be applied for within a year of first disclosure; in other countries, however, the right to protection is usually lost if the disclosure is made before filing for the patent in that country.

While much of the technology transfer between universities and industry involves the transfer of high-tech intellectual property, this is not the entire technology transfer universe.  Trademarks can be licensed as the main item under consideration, or as the ancillary add-in to give stature to the final product.  This first type of trademark licensing does not pose much of an issue for the university; a university uses its marks, the marks become worthy of merchandising, and the university enters into licensing agreements with parties to produce licensed merchandise.  There is little risk of exposure for the university in this type of licensing arrangement.

The more sensitive area is where the grantee of patent rights wants to ride on the coat-tails of the university’s prestigious name and announce to the world that the rights came from the university.  Trademark law dictates that one cannot, without permission, use another’s name to show endorsement, sponsorship or affiliation.  Universities take great care in deciding which particular words a grantee may use to show the relationship between the parties.  Parties often fiercely negotiate whether, where and how a university’s name, logo and emblem can be used, and which precise words (“in connection with”, “affiliated with”, “endorsed by”, “with developments from”) most accurately reflect the true nature of the relationship between university and grantee.

Philosophical considerations

While the Bayh-Dole Act opened the door for commercial exploitation of university research, some would argue that there is no screen in place to keep the bugs out.  The practice of universities commercializing their research has been in place for the better part of the last century, although most academic researchers have until recently eschewed exclusivity in protecting the intellectual property rights inherent in their discoveries.  The psyche of an academic researcher has been to make their discoveries publicly known (“publish or perish” is their credo) or to use intellectual property law as a means of prohibiting third parties from creating a monopoly based on the discovery.  Some universities had policies discouraging professors from seeking patents or otherwise protecting the intellectual properties surrounding the professors’ discoveries.

Most universities’ perspectives on academic-commercial alliances have changed dramatically in the last few decades.  In the recent times of decreased research funding combined with increased pressure to expand departmental budgets, many academic institutions have turned to corporate ventures as a means of salving these problems.

The primary concern on the academic side has been that mixing commercialization with academic research will entice university researchers to abandon their core focus of searching for knowledge and focus instead only on commercially promising technology.  Universities believed corporate funds would “sully’ the hands of the institution.

Another concern of academics has been that the drive to commercialize products will lead researchers to restrict access to their research, and to withhold announcement of early discoveries until after a commercially feasible product has been developed (“Publish early and perish” could be the warning of those who want to withhold information).

A third concern is that industry backing will pressure researchers, either consciously or unconsciously, to report on research in a way that favors their sponsors.

Over the last few years, there have been several reports of undue influence upon research studies by the corporate backers of certain studies.  These have included allegations ranging from pressure to report positive results to pressure to falsify test data.  One company went so far as to bring a claim for defamation against researchers publishing a report unfavorable to the corporate product under examination.  Some corporations even structure Tech Transfer agreements to gain control over the release of unfavorable study reports, allowing the corporations to postpone such releases.

As with any discussion, this one has two sides.  Corporations have asserted that ventures between academic and commercial entities benefit the schools search.  Another position advanced by corporations is that corporate-academic relationships provide personal benefits to research professors, thus enticing them to stay at a university when they might otherwise leave for the private sector.  Corporations also believe that the interaction with industry allows universities to keep their fingers on the pulse of industry.  This allows schools to better prepare their students for life after graduation.

Corporations see as positive the influence of corporate money on the focus of university research. They say that the financial influence provides incentive to universities to focus on research that will be beneficial to society as opposed to esoteric research with little practical application.  This argument finds support in the premise of the Bayh-Dole Act.  By holding a stake in research, corporations have a vested interest in seeing inventions progress from the laboratory to the marketplace as quickly and efficiently as possible.

In grappling with these issues, universities and research facilities have gone to great lengths to set out policies and procedures for all of their Tech Transfer activities.  A lawyer dealing with these entities should be aware of the regulations and rules used by each entity.  Many of these guidelines are posted on the Internet, such as http://www.otc.umd.edu/ (University of Maryland Office of Technology Commercialization); http: //resource.ca.jhu.edu/˜ott/ Johns Hopkins University Office of Technology Transfer); http://www.umbc.edu/otd/ (University of Maryland, Baltimore County Office of Technology Development); and http://ott.od.nih.gov/ (National Institutes of Health (NIH) Office of Technology Transfer).

The proliferation of Tech Transfer agreements combined with the regional concentration of governmental research facilities and research universities make it increasingly likely that Maryland practitioners will come in contact with these agreements.  By becoming familiar with the issues particular to Tech Transfer agreements, a practitioner can move a client beyond the rank of amateur and can be seen as an olympic-class lawyer who is seemingly “Citius, Altus, Fortius” than the adversary.

Ned T. Himmelrich co-wrote this article with Jonathan M. Holda for The Maryland Bar Journal Volume XXXIV, Number 6, November/December 2001.

December 17, 2001

Himmelrich, Ned T.

Technology & Intellectual Property

Creating a Successful Technology Transfer Agreement

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

Definitions (feel free to skip).

Applicable Laws: Regulations and legal requirements that are relevant to a particular situation. Case Law: Precedent set by legal decisions of courts. Tax Implications: Potential financial effects of certain payments or actions on taxes owed. Patents: A government-granted right to an inventor to exclude others from making, using, or selling an invention. Copyrights: A legal protection given to authors, artists, and other creators that grants exclusive rights to their works. Intellectual Property: Something that is created with the mind and is protected by legal rights. Financial Statements: A document showing the financial position of an individual or entity. Articles of Incorporation: A document that defines the purpose, ownership, and management structure of a business. Confidentiality Requirements: Regulations or expectations for keeping certain information private. Payment Terms: The conditions and timing of payments for goods or services. Late Payments: Payments that are received after the due date. Interest: Money paid for the use of borrowed money. Penalties: A punishment or fine imposed for breaking a law or agreement. Rights and Obligations: The legal or contractual duties and privileges of a person or entity. Limitations: Restrictions that are placed on a person or an action. Conditions: Circumstances that must be met in order for something to happen. Approvals: Official permission or acceptance of something. Executing: Formally carrying out or completing an action. Notarizations: Documents that have been verified and authenticated by a Notary Public.

Researching the applicable laws for the agreement

Identifying and considering any tax implications, gathering the necessary documents from each party, establishing the terms of the agreement, identifying the rights and obligations of each party, establishing the conditions for payment, determining the confidentiality requirements, drafting the agreement, negotiating the terms of the agreement, obtaining any necessary approvals, executing the agreement, reviewing the agreement for compliance with applicable laws, ensuring the agreement is updated to reflect any changes in technology or the parties’ circumstances, filing the agreement with the appropriate government offices, as required, maintaining a copy of the agreement, monitoring the agreement for compliance with the terms of the agreement, get started.

• Research relevant local, state, and federal laws and regulations related to the technology transfer agreement.
• Understand any licensing and patent regulations that could affect the agreement.
• Speak with an attorney who is knowledgeable in technology transfer agreements to make sure that the agreement complies with all applicable laws.
• When all applicable laws have been identified and researched, you can move on to the next step of identifying and considering any tax implications.
• Contact a tax expert to determine the tax implications of the technology transfer agreement.
• Ask the expert to advise you on the tax laws relevant to the agreement and to identify any tax incentives or other benefits that may be available to the parties involved.
• Consider any potential tax liabilities that may arise if the agreement is not structured properly and if the parties do not comply with the applicable tax laws.
• Make sure that all tax liabilities are addressed in the agreement and that the parties understand their respective obligations under the agreement.
• When you have identified and considered all of the applicable tax implications, you can move on to gathering the necessary documents from each party.
• Determine the documents required from each party to complete the Technology Transfer Agreement (e.g. invention disclosure forms, patent applications, license agreements, etc.)
• Obtain and review the documents submitted by each party
• Confirm that the documents are complete and accurate
• Address any discrepancies between the documents and the agreement

Once all documents are gathered, reviewed and confirmed to be accurate, you can move on to the next step of establishing the terms of the agreement.

• Outline the purpose and scope of the agreement
• Define the responsibilities of each party
• Determine the timeline of the agreement
• Agree on the ownership, use, and control of the technology
• Discuss the financial terms, such as any transfer fees, royalty payments, and other payments
• Resolve any potential conflicts, such as liability and indemnification
• Address confidentiality and intellectual property issues
• Include provisions for dispute resolution

When you can check this off your list and move on to the next step:

• When all parties have agreed on the terms of the agreement and have signed off on them.
• Research and review any existing licenses, patents, agreements, or other documents relevant to the technology being transferred
• Outline the specific rights and obligations of both parties, such as the scope of the agreement, the rights of the technology holder, and the obligations of the receiving party
• Define the technology that will be transferred
• Set expectations for the level of technical support and maintenance provided
• Confirm that all intellectual property rights and confidentiality agreements are in place
• Establish a timeline for the full completion of the technology transfer
• When all rights and obligations have been identified and agreed upon, document them and have both parties sign the agreement

You can check this off your list and move on to the next step when all rights and obligations have been identified, agreed upon, and documented in the agreement.

• Decide on the type of payment, such as a lump sum or royalties
• Agree on the total sum of payment and when it will be disbursed
• Specify the currency for the payment
• Determine the payment schedule and payment method
• If royalties are being paid, determine the rate and payment period
• Include any additional payment provisions, such as bonuses or penalties
• Once all conditions for payment have been agreed upon, the details should be documented in the agreement
• Once the conditions for payment have been finalized, you can move on to the next step of determining the confidentiality requirements.
• Identify potential confidentiality requirements and consider their implications, such as what information needs to remain confidential
• Discuss with both parties about the scope of confidential information and determine the necessary protection
• Draft confidentiality provisions that cover what information needs to be kept confidential and the duration of the confidentiality
• Confirm the confidentiality protection is suitable for both parties and can be implemented easily
• Once the confidentiality requirements have been determined, the step can be marked as completed and the next step can be taken.
• Consult the parties involved, such as the technology transfer partner, to agree on the scope of the transfer and the desired outcome
• Identify the parties involved, including the transferor and transferee, and the technology being transferred
• Draft a written agreement outlining the terms of the transfer, including the scope of the transfer, expected deadlines, and the required process
• Outline the obligations of the transferor and transferee, including who owns the technology and who is responsible for maintaining it
• Include a section defining the intellectual property rights of each party
• Include a section outlining the confidentiality requirements
• Include a section outlining the payment terms for technology transfer
• When you have finished drafting the agreement, it is important to have the agreement reviewed by a lawyer to determine its legal validity
• When the agreement is approved by all the parties involved, the technology transfer can be completed
• You will know when you can check this off your list and move on to the next step when the agreement is finalized and accepted by all parties involved.

• Discuss and agree on the terms of the agreement with all parties involved. • Make sure the agreement is clear and all parties fully understand the terms. • Include any details such as payment terms, payment amount, timelines, and other important details. • Make sure all parties are comfortable with the terms and make any changes, if necessary. • Once all parties are in agreement and have signed the agreement, you can move on to the next step.

• Contact the relevant regulatory bodies and request any necessary approvals.
• Make sure to provide all the required information and documents in order to obtain the necessary approvals.
• Follow up with the regulatory bodies to ensure that the process is moving along as expected.
• When the necessary approvals have been obtained, you can move on to the next step of executing the agreement.
• Execute the agreement in accordance with the terms and conditions of the agreement
• Have all parties sign the agreement
• Obtain a copy of the executed agreement for each party
• Have the signed agreement witnessed, if required by local law
• Ensure that any required payment is made in accordance with the terms of the agreement
• Once all steps have been completed, the agreement is in effect and the parties’ obligations and rights created by the agreement are enforceable
• Check off this step, and proceed to the next step: Reviewing the agreement for compliance with applicable laws
• Research the applicable laws in the jurisdiction where the agreement will be enforced
• Confirm that the agreement does not violate any applicable laws
• Ensure that the agreement follows all guidelines set forth in the applicable laws
• Have a legal professional review the agreement for compliance with applicable laws
• Confirm that all parties involved are in agreement with the terms of the technology transfer agreement
• When the agreement is confirmed to be in compliance with applicable laws, you can proceed to the next step of ensuring the agreement is updated to reflect any changes in technology or the parties’ circumstances.
• Monitor the technology and the parties’ circumstances regularly to ensure that the agreement is up-to-date.
• Gather input from all parties when changes are necessary and make revisions to the agreement accordingly.
• Ensure that all changes are properly documented and signed off by all parties.
• Keep a record of all changes and updates to the agreement.
• When the agreement is up-to-date, you can check this off your list and move on to the next step.
• Research the specific government offices and agencies that require the agreement to be filed
• Determine the appropriate filing procedures, fees, and paperwork needed for each agency
• Gather all the required documentation and prepare the filing
• File the agreement with the appropriate government offices
• Confirm the filing has been accepted by each agency
• You will know you can check off this step and move on to the next one once all the filings have been accepted by the respective government agencies.
• Ensure that a copy of the technology transfer agreement is securely kept for future reference.
• Make sure that the agreement is stored in a safe, secure location and that it is regularly backed-up.
• When the agreement has been properly stored and backed-up, check it off your list and move on to the next step.
• Designate a point person to be responsible for monitoring the agreement and its compliance
• Establish a timeline and process for checking on the agreement’s status
• Establish a method for reporting any issues with compliance
• Implement a system for tracking and recording any changes to the agreement
• Monitor the agreement on a regular basis to ensure compliance with all terms of the agreement
• Ensure that any changes to the agreement are agreed upon and documented by both parties
• Be prepared to take legal action if the agreement is not being followed

Once you have established a system for monitoring the agreement for compliance, you can check this step off your list and move on to the next step.

Q: How would a successful Technology Transfer Agreement be enforced?

Asked by Tyler on 20th April 2022. A: A successful Technology Transfer Agreement (TTA) is enforced in the same way as any other contract. It is based on the mutual understanding of both parties that they will fulfil their obligations under the agreement and in case of any breach, the other party can take legal action and pursue any remedies available to them. The specifics of how the TTA is enforced will depend on the jurisdiction in which it is signed and the laws of that jurisdiction. It is important to ensure that both parties understand the repercussions of not fulfilling their obligations, and that both parties are in agreement about what constitutes a breach.

Q: What if I want to transfer technology to a customer based in another country?

Asked by Jonathan on 2nd May 2022. A: If you want to transfer technology to a customer based in another country, you should consider seeking legal advice from a qualified lawyer who is familiar with international law, as well as the laws of both countries involved. They will be able to provide advice on additional considerations such as local laws, taxes, export controls and any other applicable regulations which may differ from those in your jurisdiction. Depending on your circumstances, it may also be necessary to obtain approvals from the relevant government regulators before proceeding with a Technology Transfer Agreement.

Q: What are the different types of Technology Transfer Agreements?

Asked by Madison on 14th May 2022. A: There are several different types of Technology Transfer Agreements (TTAs) which can be used depending on the particular circumstances. The three main types of TTAs are licence agreements, research agreements, and technology development agreements. Licence agreements are used when transferring an existing technology or invention; research agreements are used for collaborative research projects; and technology development agreements are used for developing new technologies or inventions. Additionally, there may also be other types of TTAs such as service or distribution agreements which may be applicable depending on your business needs.

Q: What should I include in my Technology Transfer Agreement?

Asked by Matthew on 5th June 2022. A: A Technology Transfer Agreement (TTA) should include all relevant details about the transfer including information about the parties involved, details of the technology being transferred (including any intellectual property rights associated with it), any restrictions or limitations on use/disclosure of information, obligations of confidentiality, remuneration/payment terms, warranties/guarantees, dispute resolution procedures and any other applicable terms and conditions. It is important to ensure that all relevant details have been included in order to ensure that both parties have a clear understanding of their rights and responsibilities under the agreement.

Q: How do I ensure my Technology Transfer Agreement is legally enforceable?

Asked by Chloe on 18th June 2022. A: To ensure that your Technology Transfer Agreement (TTA) is legally enforceable, it must include all relevant details about the transfer including information about the parties involved, details of the technology being transferred (including any intellectual property rights associated with it), any restrictions or limitations on use/disclosure of information, obligations of confidentiality, remuneration/payment terms, warranties/guarantees, dispute resolution procedures and any other applicable terms and conditions. Additionally, it should be written in accordance with applicable laws and signed by all relevant parties to show mutual agreement and consent to its terms.

Q: How do I protect my intellectual property when transferring technology?

Asked by Ashley on 1st July 2022. A: It is important to protect your intellectual property when transferring technology through a Technology Transfer Agreement (TTA). The TTA should clearly define which intellectual property rights are being transferred (i.e., patents, trademarks, copyright etc.), as well as associated restrictions/limitations on use/disclosure of information or obligations of confidentiality for example. Additionally, you should ensure that all relevant parties involved in the transfer are aware of their responsibilities under the agreement in order to protect your intellectual property from unauthorised use or disclosure.

Q: What legal considerations do I need to take into account when creating a Technology Transfer Agreement?

Asked by Joshua on 14th July 2022. A: When creating a Technology Transfer Agreement (TTA), you need to take into account various legal considerations such as applicable laws and regulations in your country/jurisdiction; compliance requirements; tax implications; export control rules; anti-bribery laws; data protection regulations; and competition laws etc., depending on your particular circumstances and industry sector/business model (e.g., SaaS or B2B). Additionally, you should also seek legal advice from a qualified lawyer who is familiar with international law if you wish to transfer technology to customers based outside your jurisdiction.

Q: What happens if there is a dispute regarding a Technology Transfer Agreement?

Asked by Emily on 27th July 2022. A: If there is a dispute regarding a Technology Transfer Agreement (TTA), then it is important to seek legal advice from a qualified lawyer who is familiar with international law as well as applicable laws in your jurisdiction and that of any other parties involved in the dispute. Depending on your circumstances it may be necessary for both parties to enter arbitration or mediation proceedings in order to resolve any disputes amicably without having to resort to costly litigation proceedings further down the line. It may also be necessary for both parties to agree upon specific procedures for resolving disputes before signing the TTA so that any issues can be dealt with promptly if they arise at any point during its duration.

Example dispute

Suing for breach of technology transfer agreement.

• A plaintiff may sue for breach of technology transfer agreement if the defendant has failed to comply with the terms of the agreement.
• This could include failing to pay the agreed-upon licensing fees, failing to transfer the technology as agreed, or infringing on the intellectual property rights associated with the agreement.
• The plaintiff must be able to prove that the defendant was in breach of the agreement and that they suffered damages as a result.
• Damages could include lost profits, lost opportunities, or other economic losses.
• The plaintiff may seek to have the agreement enforced or seek monetary damages to compensate them for the breach.
• Settlements may also be negotiated where the defendant agrees to pay a certain amount of compensation to the plaintiff, or to take certain actions to rectify the breach.

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Technology Transfer

Technology transfer is the process by which technology is transferred from federal labs, universities, or other research institutions to industry where it can be developed into a commercial product or service.

The U.S. government funds over $100 billion in research and development activity annually, which leads to a continuous pipeline of new inventions and technologies. Technology transfer enables the commercialization of many of these technologies by industry partners who may further develop, scale up, and commercially deploy them.

Beginning with the Stevenson-Wydler Technology Innovation Act of 1980, Congress enacted a series of laws to promote and incentivize technology transfer. These laws encourage the private sector to commercialize federally funded technology through technology transfer mechanisms such as Cooperative Research and Development Agreements (CRADAs), start-up companies, patent license agreements, educational partnership agreements, and state/local government partnerships.

Stevenson-Wydler Technology Innovation Act of 1980

The Stevenson-Wydler Technology Innovation Act of 1980 (Pub. L. 96–480) (94 Stat. 2311) was the first major U.S. technology transfer law. It requires federal laboratories to actively participate in and budget for technology transfer activities and for each federal lab to establish an Office of Research and Technology Applications in order to coordinate and promote technology transfer.

The Bayh Dole Act

The Bayh-Dole Act or Patent and Trademark Law Amendments Act (“Bayh-Dole”) (Pub. L. 96-517), 35 U.S.C. § 200–212, was passed in 1980 to incentivize and accelerate the commercial exploitation of federally funded research results. It allows institutions and grant recipients, such as universities, to hold the title to patents on inventions stemming from government funded research and to license the rights to those inventions to industry partners. This can generate valuable royalties for the research institution if the technology is successfully commercialized.

Bayh-Dole led to the remarkable growth of patenting and licensing activity by U.S. universities. Bayh-Dole has also spurred significant growth in the number of start-up companies formed to develop and commercialize these federally funded technologies, pursuant to licenses from universities.

Federal Technology Transfer Act (FTTA) of 1986

The Federal Technology Transfer Act (Pub. L. 99-502), 15 U.S.C 3710, was enacted by Congress in 1986 and amends the Stevenson-Wydler Act of 1980. The FTTA improves industry access to technologies from federal laboratories. The act established the Federal Laboratory Consortium for Technology Transfer, a nationwide network of over 300 federal laboratories, agencies, and research centers that promote the commercialization of technologies from the federal labs. The FTTA also enabled federal laboratories to negotiate licenses for patented inventions made at the laboratory and to enter into Cooperative Research and Development Agreements (CRADAs). CRADAs are formal written agreements between one or more federal laboratories and one or more non-federal parties under which the government, through its laboratories, provides personnel, services, facilities, equipment, intellectual property, or other resources. Under the FTTA, no funds, however, may be provided by the federal laboratories to the non-federal parties.

National Technology Transfer and Advancement Act of 1995

The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113)(110 Stat. 775) amended the Stevenson-Wydler Act to make CRADAs more attractive to both federal laboratories and private industry. The law provides assurances to U.S. companies that they will be granted sufficient intellectual property rights to justify prompt commercialization of inventions arising from a CRADA. The Act promoted the development of new technology standards by requiring that all federal agencies use cooperatively developed standards, particularly those developed by standards developing organizations.

The USPTO facilitates the voluntary licensing and commercialization of innovations in a variety of key technologies from many public sources through its Patents 4 Partnerships platform, a searchable repository of patents and published patent applications that are available for licensing. Additionally, the USPTO supports a number of federal agencies, U.S. universities, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, and the Federal Laboratory Consortium for Technology Transfer in their technology transfer efforts to commercialize federally funded inventions.

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Technology Assignment Agreement: Key Legal Considerations

• December 22, 2023
• digitalpitakoppa

Technology Assignment Agreement: Everything You Need to Know

As technology continues to advance at an unprecedented rate, the need to protect intellectual property rights has become increasingly important. One of the key legal documents used in this regard is the technology assignment agreement. This agreement is a crucial tool for businesses and individuals looking to transfer ownership of technology and intellectual property. In this blog post, we will delve into the intricacies of technology assignment agreements and why they are essential in today`s tech-driven world.

What is a Technology Assignment Agreement?

A technology assignment agreement is a legal document that outlines the transfer of ownership of technology and intellectual property from one party to another. This agreement typically includes details of the technology being transferred, the rights and obligations of both parties, and any conditions or restrictions associated with the transfer.

Why Technology Assignment Agreements Important?

Technology assignment agreements are crucial for several reasons. Firstly, they provide clarity and legal certainty regarding the ownership and rights associated with a particular technology or intellectual property. This can help avoid disputes conflicts future.

Secondly, these agreements are essential for businesses looking to protect their proprietary technology and ensure that it remains their exclusive property. By formally transferring ownership through a technology assignment agreement, businesses can safeguard their intellectual property rights and prevent unauthorized use or exploitation by third parties.

Case Study: The Importance Technology Assignment Agreements

Key elements a technology assignment agreement.

When drafting a technology assignment agreement, it is important to include certain key elements to ensure that the transfer of technology and intellectual property is legally valid and enforceable. These elements may include:

• Detailed description technology being transferred
• Clear identification parties involved
• Transfer ownership rights
• Confidentiality provisions
• Warranties representations
• Remedies breach agreement

Technology assignment agreements play a crucial role in the protection and transfer of intellectual property rights. Whether you are a business looking to safeguard your proprietary technology or an individual seeking to transfer ownership of a valuable invention, a well-drafted technology assignment agreement is essential for ensuring legal clarity and certainty. By understanding the importance of these agreements and their key elements, you can effectively navigate the complex landscape of technology ownership and protection in today`s digital age.

Essential FAQs about Technology Assignment Agreements

Technology assignment agreement.

This Technology Assignment Agreement (the “Agreement”) is entered into as of [Date], by and between [Assignor Name] (“Assignor”) and [Assignee Name] (“Assignee”).

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Patent Assignment Agreement

This Patent Assignment Agreement is a comprehensive document designed to facilitate the transfer of patent ownership from the original patent owner, known as the assignor, to another party, known as the assignee .

A patent is a legal grant issued by the United States Patent and Trademark Office (USPTO) to an inventor, providing exclusive rights to make, use, and sell their invention for a limited period , typically 20 years from the filing date. This protection is granted in exchange for the public disclosure of the invention. This system encourages innovation and lets inventors benefit from their creations for a specified period of time.

An assignment is the legal transfer of ownership or rights of a patent from one party (assignor) to another (assignee) . Using a Patent Assignment Agreement, the assignor forever relinquishes their rights to the patent, and the assignee assumes control and ownership of those rights for the duration of the patent.

This assignment can be made either before or after a patent application has been issued as a patent. By law, a patent is considered personal property and, so, can be sold or transferred in the same way one could sell a car or a piece of furniture. This document formally initiates the transfer process, providing clarity and protection for both parties involved. This agreement is particularly useful when inventors, companies, or individuals who wish to transfer their patent rights, whether for financial considerations, strategic partnerships, or other business transactions.

This document is different from a Trademark Assignment Agreement, which is used for the transfer of a different kind of intellectual property, known as a trademark. A trademark is usually a brand name or logo, unlike a patent, which is usually an invention of some sort. This is also slightly different from an Intellectual Property Release . Although that form could be used for a patent, it is generally used for copyrighted material, like works of art or pieces of music. In that case, payment is not made and, instead, the copyrighted works are simply "released," or given to another party. This document can also be distinguished from an Intellectual Property Permission Letter, as there, one party is writing to request permission to use the intellectual property of another. The Patent Assignment Agreement would then come after the letter, but the letter is not the formal legal document that initiates the transfer.

How to use this document

This document includes all the information necessary to transfer the ownership of a patent from one party to another. This document should be used when the transfer will be permanent, usually for a one-time fee , and no royalties will be due after the assignment. This document allows the parties to fill in details of the patent to be transferred, such as the patent name, original recordation number, and date the patent was initially issued . This ensures that everything needed for new recordation with the United States Patent and Trademark Office (USPTO) is present.

Once the document has been completed, both parties should sign the document in front of a notary and have the notary complete the notary page. The document must then be recorded with the USPTO within three months of its signing, or it becomes void. The current cost for filing an assignment with the USPTO is $40 per patent. The assignment can be filed either online or by mail.

Applicable law

In the United States, specific federal laws govern patent assignments, primarily under Title 35 of the United States Code , which pertains to the country's patent system. Section 261 of Title 35 outlines the general provisions related to patent ownership and transfers. According to this statute, patent assignments must be in writing to be valid, and they require the signature of the owner of the patent or their authorized representative. The law also specifies that the assignment must be recorded with the USPTO to establish priority and provide notice to the public.

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Other names for the document:

Patent Assignment Contract, Intellectual Property Transfer Agreement, Technology Rights Conveyance Agreement, Innovation Assignment and Transfer Accord, Assignation of Patent Rights Contract

Country: United States

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How federal tech transfer propels rapid market growth for companies like Cor-Tuf

News | Jun 13, 2023

What is Technology Transfer?

How federally funded inventions become problem-solving products and services

Technology transfer is your bridge to a portfolio of world-class technologies that can be commercialized.

via Pixabay

From prosthetics to photonics to robotics, new technologies constantly emerge from the federal laboratory system. But how do these technologies get out of the lab and into the market?

One path is technology transfer. Also known as tech transfer, intellectual property transfer, or T2, technology transfer is the process of transferring an invention from one person or organization to another. The goal is for the receiving entity to evolve that invention into a commercial product or service.

Federal tech transfer – when intellectual property is transferred from a federal laboratory to another institution or private business – is one way for federally developed inventions to reach the public.

The federal government employs thousands of scientists and engineers who conduct research and develop solutions to strengthen our nation. Many of these inventions, although developed with a specific use in mind for the government, also have the potential to serve broad commercial purposes. So, to make the most of the funding that goes into these inventions, the federal government requires its labs to make technologies available for private industry partners to license and commercialize. 

Through public-private partnerships, federal labs and the private sector use technology transfer to create jobs, spark economic development and innovation, and sustain the U.S.’s competitive advantage in the global marketplace. The process helps businesses design new products and services, evolve existing ones, or start new companies. And it’s more common than you might think: intellectual property is shared frequently across universities, research centers, federal labs, and private businesses to unlock dual use cases.

As the official technology transfer intermediary for the U.S Department of Defense (DOD) and Veterans Affairs (VA), TechLink helps companies navigate the licensing process and acquire the rights to technologies that support their business goals.

Browse available technologies from the DOD and VA

Take for example CyberKnight,  a Navy-developed cybersecurity tool that automates compliance analysis to ensure systems meet requirements set by the Defense Information Systems Agency. Initially created for the Coast Guard, the tool was recently licensed to Ignyte Assurance Platform, a private cybersecurity company, to bolster its Governance, Risk, and Compliance offerings. 

And CyberKnight is just one out of many DOD tech transfer successes. Through the DOD and VA labs alone, there are   thousands of federally developed inventions that are licensable to businesses that can bring them to market. For nearly 30 years TechLink has guided thousands of companies to form technology transfer partnerships that help them innovate, stay competitive and meet market demands.

Why Technology Transfer?

Businesses face growing pressure to drive innovation and stay competitive while controlling costs. With technology transfer, companies can sidestep incremental innovation to create new products and services. By leveraging existing intellectual property, licensees can avert the risk — and costs — associated with early-phase research that may never lead to a marketable product.

60% of innovation leaders collaborate with federal laboratories, versus just 35% of other companies. Read TechLink’s  R&D Innovation Performance Study to learn more.

Technology transfer offers businesses lower-risk opportunities to innovate and evolve, especially during economic downturns. In addition to licensing, cooperative research and development agreements (CRADAs) are another type of partnership companies can pursue to develop new capabilities with world class labs and scientists. CRADAs allow federal labs and private companies or institutions to collaborate on research and development projects based on mutually beneficial goals, pooling knowledge and resources around new developments that advance intended interests.

Patent licenses and CRADAs not only support U.S. economic development, but also give private industry partners access to cutting-edge R&D capabilities that may not be available within their own organizations. This access can help companies manage costs while accelerating innovation to meet demand and outrun competitors.

In fact, technology transfer legislation mandates (via 15 U.S.C. 3710) that federal labs engage the U.S. private sector in commercializing government inventions as a driver for economic growth, so companies can often address innovation competency gaps on favorable financial terms: most licensing fees come in under $10K.

For Ignyte Assurance Platform, accessing new soltions through technology transfer was key to meet the cybersecurity demand coming from its private healthcare and defense contractor clients. With CyberKnight, Ignyte is better positioned to help its clients keep up with evolving compliance standards. “The process of [compliance] can be very time consuming... and the efficiency aspects of CyberKnight are attractive in this context,” said Ignyte president Max Aulakh.

How TechLink Helps

At TechLink, we help companies evaluate and navigate federal technology licensing and partnership opportunities from more than 100 labs operated by the DOD and VA. And we do it at no cost. We do the legwork to connect businesses with the country's best scientists and engineers and help them gain the rights to inventions. Licensees can then use these technologies to develop problem-solving products and services.

“We help companies of all sizes, from small businesses to Fortune 500 companies, tap into the incredible research and discovery occurring in our nation’s labs in virtually all technology fields,” said Brett Cusker, executive director at TechLink. “We help companies navigate something they’re not doing every day to drive innovation. Our longstanding working relationship with labs, and our expertise in licensing, makes a difference for those companies and labs we support.”

Learn More About How TechLink Can Help

Our team of licensing experts brings decades of experience to guide potential licensees through the tech transfer process. We help them evaluate technologies of interest and uncover the information they need to build a business case for a DOD or VA partnership. Then, we walk them through the steps to apply and acquire rights to the technology, which they can then use for commercial applications.

While the tech transfer process can seem like a challenging undertaking, TechLink knows how to navigate and guide companies based on our long-standing relationships with labs. Some deals can be closed in as little as six weeks.

And TechLink’s support doesn’t end once a deal gets signed. Where appropriate, we offer guidance post-agreement, helping licensees build capabilities and find funding opportunities, create a go-to-market strategy, build sales decks, and more.

Interested in learning how TechLink can help your company innovate and drive growth? Let’s talk.

Have questions for our team of licensing experts?

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Technology Transfer: From the Research Bench to Commercialization

Gail a. van norman.

a Department of Anesthesiology and Pain Medicine, University of Washington, Seattle, Washington

Roï Eisenkot

b CoMotion, University of Washington, Seattle, Washington

Progress in medicine hinges on the successful translation of basic science discoveries into new medical devices, diagnostics, and therapeutics. “Technology transfer” is the process by which new innovations flow from the basic research bench to commercial entities and then to public use. In academic institutions, intellectual property rights do not usually fall automatically to the individual inventor per se, but most often are the property of the institution. Technology transfer offices are tasked with seeing to it that such intellectual property rights are properly managed and commercialized. This 2-part series explores the technology transfer process from invention to commercialization. Part 1 reviews basic aspects of intellectual property rights, primarily patents and copyrights. Part 2 will discuss the ways in which inventions become commercialized through startup companies and licensing arrangements with industry players.

Curiosity and hope of reward spur innovation. Both are satisfied when inventions and innovations realize market potential in the form of new products or services. The inventor reaps rewards by being able either to bring the invention to life through personal engagement, or by granting another entity the permission, or license, to do so. These simple concepts are so important for fostering the technological and industrial development of a nation, that the Founding Fathers codified them into the first article of the United States Constitution, which gives Congress the power “to promote the progress of science and the useful arts by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries (1) .” Such “intellectual property (IP) rights” are secured mainly through patents, trademarks, copyrights, and trade secrets.

The exploitation of basic science discoveries in order to produce commercially viable technological and therapeutic innovations is critical for medical progress. Academic centers have increasingly been a major source of inventions and innovations ( Figure 1 ), with 1 report indicating that the number of commercial licenses and startups launched out of academic centers nearly doubled over a 10-year period (2) . With the exception of the years of economic recession between 2008 and 2013, annual growth in total research and development (R&D) in the United States has routinely exceeded growth in the gross domestic product, and in 2013 was recovering to pre-recession levels (3.2% vs. 2.2% for R&D and gross domestic product, respectively). In 2013, total U.S. R&D expenditures exceeded $456.1 billion (3) . Five sectors in the United States are responsible for most R&D performance: chemical manufacturing (including pharmaceuticals), computer and electronics manufacturing, transportation manufacturing, information technology, and professional, scientific, and technical services (including scientific R&D services). Health care innovations include chemical manufacturing, information technology, and scientific R&D, and occupy a prominent place in total U.S. R&D (3) .

Growth in Disclosures, Startups, Executed Licenses and Options, and Reported Gross Licensing Incomes 1991–2015

Statistics are from the Association of University Technology Managers FY2015 Licensing Survey, available at: http://www.autm.net/resources-surveys/research-reports-databases/licensing-surveys/fy2015-licensing-survey/ . The survey represents 169 universities, 31 hospitals and research institutes, 1 third-party technology investment firm, and 1 national laboratory.

This 2-part series will review steps that take an invention, process, or innovation to commercialization. Part 1 will discuss the evolving relationship between academic R&D efforts and federal law, and describe important concepts in ownership and protection of intellectual property. Part 2 will describe “technology transfer” from nonprofit research institutes such as universities, that is, practical ways by which innovations then become commercialized, in more detail, through startup companies and license deals with incumbent, mostly for-profit, market players.

Trade Secrets and Patent Law

IP rights developed historically via 2 significant routes: trade secret law and patent law. “Trade secrets” are innovations, processes, and specialized knowledge developed within a business and kept confidential (e.g., Google's search algorithms). Although trade secrets are not generally considered “property,” trade secrets are nevertheless part of a business's armamentarium in achieving competitive—and oftentimes critical—advantages in the marketplace (4) , and employees are held to an obligation to not divulge trade secrets. Of note, the 1851 English case of Morrison and Moat that confirmed this obligation and heavily influenced U.S. law involved a medical product (5) . Morrison and Moat were sons of the founders of a company that developed and marketed medicines created around a secret recipe. When Moat left the company, Morrison was able to obtain a legal injunction to prevent Moat from selling a medicine that was made using the company's secret recipe 6 , 7 .

Patent law, on the other hand, grew out of ancient systems that granted exclusive privileges or monopolies for enterprises. Monopoly grants are at least as old as ancient Egypt. In contrast with trade secret laws, which applied to knowledge, monopolies applied to trade and manufacturing, and were often owned by the government (e.g., the “king”). Licenses developed as means of extending monopoly rights to exclusive groups, either as a reward for service (a “royal favor”) or in return for compensation to the crown (“royalties”). Patents evolved as a way for an inventor to deny others the right to take advantage of their invention, by denying them the right to manufacture the invention or to license it. This motivated the inventor to share his or her invention with society without fear.

Before World War II, almost all R&D in the United States was conducted in federal facilities by federal employees. Government policy generally made all patents from such work available to the general public in order to encourage product development (8) because the public had paid for the research through taxes. Following the war, the United States federal government remained the single largest source of funding for R&D in all market sectors in the country (8) . In the face of a rapid growth in technological advancements, the government increasingly relied on contractors in the form of private companies, universities, and nonprofit organizations for such R&D work, particularly in the areas of defense and health care (9) . The use of government facilities to carry out R&D dramatically declined, but the government nevertheless remained a huge contributor to R&D through federal research grants, salaries, and other contributions.

Basic research currently accounts for about 18% of all U.S. R&D performance, with universities and colleges accounting for about 51% of all U.S. basic research. The federal government is still the single largest funder of basic research in the United States, accounting for about 47% of all such funding in 2013. By contrast, the business sector performs the lion's share of applied research in the United States, accounting for 56% of the research and supplying 51% of the funding. In addition, the business sector performed 88% of all technology development in the United States in 2013, and supplied 81% of the funding (3) .

Until the latter half of the 20th century, the government had few policies to encourage the public use of the huge reservoir of R&D it had amassed. No overall established polices or methods moved ownership of inventions or ideas arising from government contractors or grantees to private or commercial entities who were better equipped to develop some useful purpose or product from the research; there was also no consistent method to license government-owned inventions or patents to private enterprise for development. Methods that evolved for obtaining such ownerships or licenses thus varied widely, in some cases being governed by federal law (such as with the Department of Energy), and in others governed by the policies of local agencies (such as with the Department of Defense).

Efforts to bring uniformity to the federal patent system and to promote the more robust transfer of government R&D to private entities were initiated in 1963, when President Kennedy issued a memorandum acknowledging the federal government's responsibility to see that inventions created under government sponsorship were developed for the public good (10) . Memoranda from Presidents Kennedy and Nixon, later codified in federal law, established that many private contractors would retain exclusive rights to inventions and developments made during their partnership with the government in all but a few situations (11) . These memoranda required the private contractor to bring the invention to the point of practical application within 3 years or risk losing the exclusive license from the government, and they also broadened the authority of agency heads to grant greater rights to contractors (12) .

Despite these actions, the number of unlicensed (and therefore unused) government patents continued to grow. To further encourage commercialization of government-partnered innovations, Congress passed the Bayh-Dole Act of 1980 (13) that with a few exceptions allowed the funded entity to retain title to any invention created as a result of government contracts and grants. The scope of the act was extended in 1983 under President Reagan, although the government retained so-called “march-in rights” to reclaim the titles to inventions if the contractor did not take effective steps to commercialize the invention within a reasonable period of time (14) . One concrete effect of the enactment of Bayh-Dole in 1980 is that the U.S. government currently takes title to virtually no inventions created by government contractors and grantees (8) , although it continues to be the single largest sponsor of all R&D in the nation (3) .

If the government does not hold the patent on ideas and inventions developed under government-partnership funding, who does? There is a distinction between ownership of an innovation and having access rights to it (i.e., permission, or license, to exploit it). The Bayh-Dole Act gave research institutes ownership of patents resulting from federally funded research. But since research institutes’ core “business” is teaching and conducting research, they generally commercialize such IP assets by granting access rights to (mostly) for-profit commercial entities by way of a license—while in most cases retaining ownership of the underlying IP.

A critical element of product development begins with patent protection and ownership. The development of a drug or device is both risky and expensive. Achieving marketing approval for drugs requires an average of 12 years (15) , and for medical devices about 7 years (16) . Fewer than 1 in 10 putative drugs that survive preclinical testing make it all the way through to U.S. Food and Drug Administration (FDA) approval, at direct costs that are estimated at $1 billion per drug, and growing (15) . Forbes estimates that the total cost of bringing the drug to market is about $5 billion if total drug-approval failure rates and development costs of failed drug candidates are taken into account  (17) .

Once approved, it is relatively easy for other manufacturers to recreate a drug or device and generate profits without having undergone the expense of the development and regulatory approval steps. Without the protection of exclusive rights to the product and the ability to recoup development costs, there is little incentive for commercial manufacturers to pursue new therapeutics. IP rights, principally in the form of patents, protect a developer's rights to prevent or stop another enterprise from copying the product, or else allow the developer to command fair compensation for the permission—or license—for others to do so. Such licenses are especially critical to academic institutions. Universities and colleges generally do not commercially develop nor do they manufacture or sell such products. Rather, they must attract private manufacturers or investment bodies such as venture capital enterprises. The main attractions for such private entities are the strength of an academic institution's IP protection and the reputation of the researchers behind the relevant innovation: most critically it is the quality of research and the commercial opportunity the innovation addresses.

The transfer of technology from the academic to the private sector can happen in several ways: 1) through publication of innovations to the general public without taking further measures of a commercial nature; 2) through sponsored research agreements with private industry; and 3) through the formation of startup companies. The latter 2 routes involve the granting of access rights to IP in the form of licensing or an option to license (where the research institute retains ownership over such IP) or, rarely, assignment of ownership to such IP rights.

The Bayh-Dole Act of 1980 and the Bayh-Dole regulations that flowed from it form the basis of the current framework for technology transfer at academic institutions to this day. The regulations give universities the right to claim ownership of global patents to inventions created under U.S. Government grants and contracts and require that: 1) university employees report to their university the development of any inventions arising out of a government grant or contract, and inform the university of any public disclosures or sales of such inventions; and 2) that the university disclose to the government funding agency whether the university is going to elect to take title to the invention and apply for patents. If a university elects not to take title, the government agency has 60 days after being informed of the invention to determine whether the agency will take title. The National Institutes of Health developed Interagency Edison (iEdison) as a tool to allow government grantees and contractors to report government-funded subject inventions, patents, and utilization data via the web to the government agency that issued the funding award  (18) .

It should be emphasized that the government does not require that an inventor assign title of their invention to their university. Similar to rules regarding trade secrets, however, most all universities do require such assignment as a condition of employment, although there are some exceptions, and it behooves an inventor to be familiar with the specific requirements of their home institution ( Table 1 ). If both the university and the government agency waive title, the inventor may personally claim the patent 19 , 20 .

Table 1

Possible Exceptions to Automatic Patent Assignment at a University

Clearly, if an academic institution perceives that an invention may be valuable, then it would opt to take title to it. However, they will usually license those rights exclusively and under certain business terms to the startup company or incumbent market player engaged to do product development. In many cases, universities will take equity in a startup company in lieu of upfront license fees (cash) as partial consideration for the license, in order to preserve cash flow for the fledgling startup and also to enjoy equity-related upsides such as dividends or equity payouts. In 2001, the Association of University Technology Managers (AUTM) found that universities had executed at least 3,282 licenses and options, received $852 million in income from licensing fees, and held equity in 70% of the 494 startup companies that were formed in that year around university-licensed technology (21) . The 2014 AUTM survey indicates that these numbers continue to grow, with 5,435 licenses executed (representing a 4.5% increase over the previous year), 549 licenses including equity (an increase of 17% over the prior year), 914 startup companies formed (an increase of 11.7%), and 965 new commercial products created (an increase of 34.2%) ( Figure 1 ) (22) .

The Bayh-Dole Act of 1980 applies only to inventions that arise during the course of government-partnered R&D, which accounts for the majority of university inventions. However, the technology transfer processes developed in response to the Bayh Dole regulations generally inform most university policies and procedures with regard to all inventions created by their employees in the course of their employment. Most universities have created technology transfer offices (TTOs), to source innovations, manage IP protection, provide commercialization-promoting resources (such as gap funding programs, access to business savvy mentors and entrepreneurs as well as regulatory consultants, connections to industry and investment bodies, etc.), and to negotiate and execute licensing deals. In the course of reviewing an invention (and whether the university will claim title to it), the TTO will determine whether an invention can likely be patented or copyrighted.

Intellectual Property Rights: Trade Secrets, Patents, and Copyrights

Trade secrets.

In the course of a business, information, innovations, or processes may be developed that the owner keeps confidential and that give the business competitive advantage in the marketplace—a “trade secret.” The owner is not required to have a patent to acquire property rights over information that is thus deemed to hold “independent economic value” (5) . The holding of intellectual rights to such information and processes depends instead on the care the owner takes in protecting the information, innovation, or process from unwanted disclosure. The owner can legally disclose the existence of such things to anyone they want, but they are then virtually powerless to prevent others from freely using them to their own advantage. If disclosure of such materials occurs because of a “morally offensive breach”—for example, an employee of the company discloses the secret against the owner's wishes—the owner may have legal recourse against the employee who disclosed the information. However, the owner does not have legal recourse against others who use the material once it is disclosed ( Table 2 ). Secrets, once told, are no longer secrets. Trade secret law does not apply to information, innovations, or other materials that are readily deducible or obvious. Furthermore, trade secret law does not protect the owner against independent development or “reverse engineering” by others of a similar or identical innovation (5) .

Table 2

Characteristics of Patents, Trade Secrets, and Copyrights

IP = intellectual property.

Patents are the instruments by which inventors retain for a limited period of time the exclusive rights to “exclude others from making, using, offering for sale, or selling” the invention in the Unites States, or “importing” the invention into the United States (23) . Critically, they do not grant the owner of the patent the right to commercially exploit the invention. It is in fact possible for a patent owner to be prevented from using their invention by another patent.

Take the following example:

Inventor A patents a kind of house paint that not only looks great, but kills carpenter ants. Both properties are mentioned in the patent application claims. Inventor B wants to patent a new use for the paint, to kill hornets. The patent application fails, because it does not meet the requirement for non-obviousness; the paint's ability to kill hornets could reasonably be expected, based on its ability to kill ants. Inventor C accidentally discovers that hair grows wherever the paint contacts human skin. Inventor C is able to patent the use of the paint as a treatment for baldness, because it is an unanticipatable claim that does not rely on the invention's expected properties, either as paint or as an insecticide. However, Inventor A can exclude Inventor C from manufacturing the compound until Inventor A's patent expires and Inventor C can exclude Inventor A from marketing his paint as a baldness cure (which Inventor A would like to do since the baldness market is much stronger and less competitive than the market for house paint). Inventor A could seek a license from Inventor C to market the new use, or Inventor C could seek a license from Inventor A to manufacture the paint. Once each inventor's patent expires, they each can proceed with plans to manufacture and market the paint as a baldness remedy without a license from each other.

Patent laws are nation-specific, and inventors must apply for a separate patent and pay separate fees in each nation in which a patent is desired. Patenting rights can be pursued in multiple countries at once through a single application if filing is done in accordance with applicable international treaties, agreements, or conventions (24) . However, a nation-specific application or validation of the patent will always be eventually required. This discussion will focus on U.S. patents.

What innovations qualify for a patent?

In the United States, patents can be issued for any “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” (25) , with the exception that the Atomic Energy Act of 1954 excludes inventions useful solely for the utilization of nuclear material or atomic energy in an atomic weapon (26) . In order to qualify for a patent, an innovation must be useful, novel, and non-obvious.

It is key that an invention be “useful,” meaning that there is a useful purpose and that the invention is operational. If a machine does not perform its stated and intended purpose, it will not be issued a patent. A patent also cannot be issued for an idea or suggestion, and a complete description of the object or machine for which a patent is sought will be required. A patent is, in fact, a teaching document; in exchange for the government granting exclusive rights to the patent owner(s), they are expected to provide a full description and instruction to the public regarding the purpose of technology and how to build it. The description must be in sufficient detail that a person skilled in the art could build the innovation and produce at least 1 of the results claimed for it. The patent applicant need not have actually built or produced a marketable product, however.

Patent law excludes the issuance of a patent for a law of nature, physical phenomena, and other abstract concepts. Furthermore, in order for an invention to be patentable, it must be novel and non-obvious.

To meet the novelty requirement, an invention cannot have been previously invented, have a patent application already filed, or be known to others or otherwise available to the public anywhere in the world. This means that the invention cannot have been described in a printed publication, be in public use, be on sale, be on public display, or otherwise be available to the public before the effective application filing date. It is critical for academic researchers to appreciate that, according to the United States Patent and Trademark Office (USPTO), “otherwise available to the public” includes types of disclosures such as “an oral presentation at a scientific meeting, a demonstration at a trade show, a lecture or speech, a statement made on a radio talk show, a YouTube TM video, or a website or other on-line material” (27) . Any of these activities before filing a patent application destroys the “novelty” requirement for an invention and renders it unpatentable. This requirement is specific and far-reaching. For example, merely describing the invention in a grant application, if it is done in sufficient detail such that someone skilled enough could duplicate it, may violate the novelty condition if the grant is disclosable under the Freedom of Information Act 20 , 28 . However, the majority of grants do offer confidentiality so that merely applying to them isn’t treated as a novelty-destroying public disclosure by TTOs.

In the United States, a researcher has a 12-month grace period to present a patent application after such a disclosure. Other countries are less generous. In Japan, the grace period is 6 months. In Europe, there is no grace period. Fortunately, if a patent application is filed in any country subject to the 1967 Paris Convention for the Protection of Industrial Property, such publication no longer violates the novelty requirement in any other Convention countries as long as patent applications are pursued individually in the other countries (29) .

Non-obviousness

Even if an invention is novel and useful, it may not be patentable if it is not sufficiently different from existing methods or materials to make it nonobvious to someone skilled in the area and viewing the available literature. As a practical matter, usefulness is rarely if ever an issue for patentability because most innovations are useful one way or another. Novelty issues are much more common, but they are usually easy to identify if properly searched for, because the answer is binary: Does a single prior art source describe the invention? The answer is either yes or no. Non-obviousness, on the other hand, is trickier to identify because judging non-obviousness of an innovation is commonly done against a combination of elements from several different sources. Determining obviousness is more nuanced and perhaps even subjective—and hence more prone to interpretation and increased uncertainty.

Computer software: special considerations

Computer software present special complexities with regard to patents (30) . “Software” generally refers to computer source code, object code, procedures, and any documentation that contributes to the operation of a computing device, its performance, or output. Although some computer software (e.g., that which contributes directly to the operation of the computer itself) might be patentable, in general, computer software programs have been considered “creations in the area of thought” (4) or the expression of an abstract idea (31) . As such, software can be protected by copyright (see below) but is often not patentable, although the rules of patent eligibility for software are under frequent re-examination by the USPTO.

Patent duration

Patent laws clearly present conflicts with the general principle in the United States that monopolies are bad for a free marketplace. Antitrust legislation in the United States limits monopoly power to preserve market competition. Antitrust laws and patent laws exist in tension with one another: antitrust legislation condemns monopoly power, whereas patent law promotes innovation by granting certain monopoly powers. One way in which conflicting aims of these laws are managed is by limiting the duration of patents.

For patents filed after 1995, the duration of a patent is 20 years after the patent application is filed (32) . This poses some challenges for many medical innovations. In the drug industry, for example, the FDA process for marketing approval for a new drug after patenting takes an average of 12 years (15) , thus limiting the effective marketing period before patent expiration to 5 to 8 years, after which other companies are allowed to create chemically identical or equivalent “generic” drugs and market them.

Once other companies are allowed to produce competing versions of an innovation, the market value often falls dramatically. Pfizer experienced a 19% decline in total first quarter total company sales revenues after Lipitor (atorvastatin) lost patent in 2011, almost solely due to the decline in sales of Lipitor (33) . Similar large-scale declines in total company sales revenues were experienced after patent losses by Eli Lilly: when Prozac (fluoxetine) lost patent in 2002 (9%) (34) and again after Zyprexa (olanzapine) lost patent in 2011 (73%) (35) . When Merck lost patent for Pepcid (famotidine) in 2000, company revenues dropped from $775 million annually to $110 million (33) .

Patent extensions

Patents can be extended beyond 20 years under certain circumstances, and many examples can be found in the drug patenting process. The Hatch-Waxman Act of 1984 recognized that the FDA approval process held up companies' abilities to market their drugs during the patent period, and allowed patent extensions to compensate for delays in the approval process. However, the entire patent extension is limited to 5 years no matter how long the approval process takes. Furthermore, the maximum total amount of patent protection following FDA approval is capped at 14 years (33) .

After drug patent expiration, a 3-year extension in exclusive marketing can be obtained if a new use is found for the drug. One example is the extension of patent on atomoxetine (patented in the early 1980s for treatment of depression). It was later found to be effective for attention deficit disorder. Atomoxetine was then marketed under the name Strattera, under a patent that will expire in 2017 (36) . It is common practice for drug developers to assess the patentability of a new use (“drug repurposing”) because a new patent could “buy” such a developer an additional 20 years of patent protection.

Drugs can also be purified (e.g., remove inactive isomers) and be repatented as a new chemical compound (e.g., Celexa was repatented as Lexapro), extending protection for an additional 20 years, and new drug combinations can be patented (e.g., Symbyax, a combination of Zyprexa and Prozac) (33) .

Occasionally, exceptions in the patent law allow longer extensions: for example, drugs approved under the U.S. Orphan Drug Act allows a 7-year extension on the first approved use to encourage development of drugs that treat diseases affecting fewer than 200,000 people in the United States (37) .

Companies producing a generic drug equivalent sometimes “jump the line” and seek FDA approval before original patent expiration, on the grounds that the original patent was invalid, or that the new drug somehow does not infringe on the original patent. The company holding patent can obtain an automatic 30-month stay of FDA approval for generic equivalents by simply filing a lawsuit for copyright infringement (38) .

The concept of copyrights followed the invention of the printing press in the 15th and 16th centuries and the rapid growth of public literacy in Europe. Printing technology facilitated the dissemination of multiple creative avenues: from scientific and theological thought to authorship of works of fiction. The professional and financial value of authorship increased, and laws were developed to protect the rights of authors to the rewards of their works. As with patent laws, copyright laws in the United States are derived from the first Article of the Constitution (1) . The first U.S. copyright laws date to the beginning of the 20th century, but advances in technology as well as pressure for U.S. participation in international efforts to codify copyright protections lead to the first major amendment in 1976, which went into effect in 1978 (39) . The act extended the rights of widows and heirs to collect royalties on various published material for another 190 years for certain copyrights, and protected the authors' rights “for life plus 50 years,” a term for which Mark Twain fought in his lifetime (40) . Under the amended law, copyright protection extends to “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device”  (41) . Works that are included in the act are summarized in Table 3 . Most importantly, before 1976, copyright protection only applied to published work that had a notice of copyright attached. With the new act, these requirements were abolished, and copyright applies to any work that is “fixed in a tangible medium of expression, whether or not they have been published” (41) . Thus, any creative work covered by the copyright act is automatically the copyrighted property of its creator unless it was work made for hire.

Table 3

Works Protectable by Copyright Under U.S. Law

The copyright act explicitly does not protect ideas, procedures, processes systems, methods of operation, concepts principles, or discoveries, “regardless of the medium in which they are described, explained, illustrated or embodied in such work” (42) .

Copyright holders have exclusive rights to reproduce the work, create derivative works, distribute copies of the work, perform the work publicly, display the work publicly, or perform a sound recording by means of digital audio (the last amended in 1995) (41) .

Despite otherwise “exclusive” rights, however, “fair use” of copyrighted material is not considered copyright infringement, even if it technically violates the above rules. Fair use allows creative works to be produced by those other than the copyright holder for such purposes as to criticize the original work, to report the news, to teach, for scholarship, for research and for “other purposes” 43 , 44 . Factors that determine whether such unauthorized use constitutes copyright infringement are summarized in Table 4 . The law covers both published and unpublished work.

Table 4

Factors Considered in Determining Whether Unauthorized Use Constitutes Copyright Infringement

The term of copyright protection for authored works has been periodically amended, and is now 70 years beyond the life of the author, and for general copyrights, works made for hire, and those works that had been copyrighted before the 1978 amendments, 95 years. Copyrights can be transferred to others by written instrument (41) .

Obtaining Patents and Copyrights

The patent application.

The average time between patent filing and issuance in the United States is 2 to 3 years (20) , and for a university technology licensing office, the average cost of obtaining a patent is about $10,000, much of which is spent on attorney's fees ( Figure 2 ). Kneller (20) found that about 2% to 50% of all university patent applications are ultimately licensed. Currently, the USPTO issues 3 types of patents: 1) utility patents for processes, machines, articles of manufacture, or composition of matter; 2) design patents for a new original and ornamental design for an item of manufacture; and 3) plant patents to anyone who invents or discovers and asexually reproduces any new and distinct variety of plant (45) .

Overview of Common TTO Patent Process

TTO = technology transfer office.

Preliminary patent search

A preliminary patent search, as well as an examination of other materials related to the invention is an important step in preparation for any patent application. Anyone contemplating a patent application, or engaged in an even earlier step in the invention process, should attempt to discover whether “prior art” exists for the invention (be it other patents or any publications in the United States or outside) featuring sufficient similarity that the “novelty” requirement would not be met. Such searches should include, not only the patent office itself, but also internet sites, literature, and other sources that might include information on innovations within the same relative field. The search may allow the inventor to strategically draft his or her patent application to pre-empt detrimental objections that could occur during the patent examination process that are based on such prior art, and can provide defenses of novelty, usefulness, and non-obviousness. The search may also save the inventor futile efforts to pursue development of an unpatentable invention. Such searches are never perfect, however. Despite requirements that patents be published, inventors can sometimes prevent publication (46) . Patents are published 18 months following filing, thus creating a “window” of 18 months in which their existence may be missed by a search. In particularly competitive fields, in which inventors are racing to file patent applications, it is not uncommon for applications to fall within the 18-month window.

Provisional patent application

Provisional patent applications can be filed quickly and inexpensively by submitting to the USPTO a provisional fee and a manuscript or other document upon which the invention is based. Provisional applications must be converted to full patent application within 1 year, or the provisional protection is considered abandoned. Provisional applications are not examined by the office, but merely filed, and therefore the fee for provisional applications is minimal (as low as $65) ( Table 5 ). The 1-year period for the provisional application does not count against the 20-year term granted on a subsequently filed full (nonprovisional) application. A provisional application represents a simple and inexpensive means of “buying time” while further development of an invention is underway. In contrast with a full patent application, no “claims” are required to be made regarding the type and scope of patent protection being sought. It should be noted that if a competing inventor files a full application for a patent after the filing of a provisional application for the same or similar invention, the original inventor will still have priority for any discoveries or claims that are disclosed in their provisional application, but not for discoveries that are not disclosed. Therefore, an important part of the value of a provisional application, like that of a full patent application, lies in the breadth and specificity of claims made in the application and the extent to which the application materials support the claims.

Table 5

Examples of Common Fees ∗ Incurred in the Basic Application and Issuance of a Utility § Patent

Small entity = independent inventor, a small business, or a nonprofit organization; micro entity = qualifies as a small entity AND has not been named as an inventor on > 4 previously filed patent applications, did not in the calendar year preceding the calendar year in which the application fee is paid have a gross income exceeding 3 times the median household income, and has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the application concerned, to an entity that in the calendar year preceding the calendar year in which the application fee is paid, had a gross income exceeding 3 times the median household income.

Full (nonprovisional) patent application

The full patent application includes 4 elements: 1) a written document with a description and claims regarding the invention (the “specification”) ( Table 6 ); 2) a drawing of the invention (when necessary); 3) an oath or declaration that the applicant believes him or herself to be the original and first inventor and 4) payment of application fees for filing, search, and examination of the patent.

Table 6

Elements of the “Specification”

The patent application contains a full description of the innovation and claims regarding the invention. Together, these sections of the application are referred to as “the specification.”

If the application is submitted to the USPTO electronically, it must be in PDF file format. All files must be submitted in English or be accompanied by an English translation.

Filing date

The application is filed and given a filing date by the USPTO once the completely written description of the innovation (the “specification”), the claims (1 or more claims regarding the “subject matter” or invention) and drawings when needed to understand the “subject matter” for which a patent is being sought. The USPTO will notify the applicant of receipt of the required elements and of the assigned application number.

Publication of the patent application

U.S. law requires under the American Inventors Protection Act of 1999 that most plant and utility applications be published (although under certain conditions an inventor can request that an application not be published) (46) . Publication of the application occurs after 18 months, and the entire file becomes open to the public. An inventor may assert provisional rights after publication and can seek pre-patent grant infringement damages from third parties before patent issuance.

Examination of the application

Once the application is complete, the USPTO assigns the application to the appropriate technology center (TC) that has charge over the area of technology related to the invention. The TC takes up application examinations in the order in which they were filed unless otherwise directed by the director of the USPTO. The examination reviews the application to ascertain that it is in compliance with U.S. laws, rules, and regulations. The TC then undertakes a search of patent application and foreign patent documents, and reviews the available literature to ascertain that the invention meets the novelty, usefulness, and non-obviousness requirements. The summary of USPTO guidelines for the patent examination (47) is a useful review for the prospective inventor. At this point, a patent may be granted. However, relatively few patents are allowed as filed, and it is common for the office to reject certain claims. The USPTO will notify the applicant in writing of the examiner's decision, normally sent by U.S. mail. This notification will contain specific reasons for any adverse decision, and information and references as may be useful for the inventor to judge the appropriateness of continuing the pursuit of a patent.

If the applicant wants to proceed, they must request reconsideration in writing within the time specified in the Office action, and distinctly and specifically point out errors in the Office's action. The response time the Office will specify will not be >6 months, nor <30 days—the usual period of time is 3 months. The applicant must reply to every ground of objection and rejection in the Office's action, and cannot merely state that they believe the action was in error. The Office will review the applicant's reply and respond with another notification of action. The applicant's reply should be a bona fide attempt to resolve the patent, since the second action by the Office is usually final.

A final rejection by the Office can be appealed to the Patent Trial and Appeal Board and thereafter to the Federal Court of Appeals.

Allowance and issuance of patent and payment of fees

If the patent is found to be allowable, a Notice of Allowance and Fees Due will be sent to the applicant. A fee for issuing the patent, and if appropriate for publishing, the patent is due within 3 months of notice. If the fees are not paid within 3 months, the application is considered abandoned, unless the director makes an exception. After payment of fees, the patent issues as soon as government printing will permit. Maintenance fees for utility patents are required at 3.5, 7.5, and 11.5 years from the date of granting. Failure to pay the maintenance fees can result in expiration of the patent (48) . A summary of common current patent fees can be found in  Table 5 .

Assignment and licenses

A patent is personal property. It can be sold, mortgaged, bequeathed, and licensed or assigned to others in whole or as a part interest.

The copyright application

The mere creation of a material copy of an original work that falls under the copyright protection act is all that is required to acquire copyright protection. The work need not ever be published, but merely exist materially. Copyrights, unlike patents, do not require any registration or recording process for legal protection to be afforded to a work, although it is possible to register materials with the Copyright Office if the creator wishes to do so. Reasons to register a work with the Copyright Office include a desire on the part of the author to have a public record of the copyrights that they own, and the fact that registration within 5 years of a work's creation can be used as prima facie evidence of ownership in a court of law (49) . Furthermore, if a creator chooses at any time to pursue an action against another for copyright infringement, they will be required to first register the work with the Copyright Office.

It is commonly claimed that by sending themselves a copy of their own work, an author establishes a “poor man's copyright.” In fact, the law does not contain any provisions for protection in this way, and such an action is not a legal substitute for registration (49) .

For the inventor, it is important to be aware that certain types of works, such as computer programs, may not be patentable, but may qualify for copyright. In such a case, the specific expression of the computer program (the “coding”) would become the exclusive property of the copyright owner, although the concept behind the computer program would not necessarily be protected.

Registering a copyright

An application for copyright registration includes 3 elements: a completed application form, a nonrefundable filing fee, and a nonreturnable copy or copies of the work being registered. Once the Copyright Office issues a registration certificate, the effective date is the date on which all of the application elements were received in the office, regardless of how long it took to process the application (50) . Applications can be filed via paper or online, although certain types of actions, such as renewal of copyright claims, may only be filed via paper. Fees for filing of standard initial copyright registration applications are $35 to $50, depending on the type of application.

It is in the public interest to encourage innovation, and to reward inventors with exclusive rights to exclude others from exploiting their creations. Such rights are established by law in the form of patents (for processes, discoveries, and machines) and copyrights (for creative works of authorship), and also to some extent by employer–employee contracts and relationships. The process of technology transfer takes an invention from bench to commercialization, the first step of which is to establish who has IP rights over the creation.

Patents award exclusive rights for approximately 20 years, and may be issued to new and useful processes, machines, manufactures, or compositions of matter, or any new and useful improvement thereof. The inventor is not required to have built the device, but must provide a specific enough description in the patent application such that a person with appropriate expertise and know-how could build the device and produce at least one of the inventor's claimed results. Copyrights award exclusive rights to works of creative authorship, including works of fiction, nonfiction, music, choreography, architecture for up to 95 years beyond the life of the author. Copyrights exist once the authored material is put into some tangible form, and do not require registration with the U.S. Copyright Office. Some innovations, such as that of certain computer programs, may fall variously under patent protection or copyright, depending on the nature and purpose of the program.

Dr. Van Norman has received financial support from the American College of Cardiology. Mr. Eisenkot is technology manager, bioengineering, at CoMotion, the technology transfer entity at the University of Washington, Seattle Washington.

All authors attest they are in compliance with human studies committees and animal welfare regulations of the authors’ institutions and Food and Drug Administration guidelines, including patient consent where appropriate. For more information, visit the JACC: Basic to Translational Science author instructions page .

The IPThink-Tank

Where ideas meet success....

• May 1, 2021

TECHNOLOGY TRANSFER CONTRACTS: An Overview

In the current age of industrialization when the word is running after invention, adoption and subsequently the absorption of the same, there have been a huge number of discoveries that have crept up by the use of scientific techniques and formulae. This is the scenario for the developed countries; while the developing countries are still striving to such developments and techniques that they aim to achieve in the next few years. Again, with more and more developments; more and more companies have come up particularly Multinational Companies which marks technological advancement as a competitive advantage that they hold against others in a market arena. These MNCs of the developed countries are the major hubs facilitating technology transfer to the various developing countries as also to budding companies.

The companies bring to use various hi-tech machines or equipment and several other new emerging technologies within the various divisions and departments be it production of raw material or finished goods all are dependent on technology. Such is indispensable to the success of each unit of a company, be it small or large and all such are patented technologies. Now the question arises as to whether it is feasible to make such equipment within or outsource the same from other countries or companies. In all such case which involves the rights of the transferor as well as the transferee has to be kept in mind and has to be put in the form of legally enforceable documents. This paper contains a brief idea of such rights in the form of Technology Transfer Agreements/Contracts.

Keywords : Competitive Advantage, Industrialisation, Technology Transfer.

INTRODUCTION

Technology Transfer Contracts are a type of new-age contracts which have gained significance over the past few years. To understand what these are and the various requirements of its validity; it is important to look into what contracts are and what governs the law of contracts in India.

The contract refers to an arrangement between two parties whereupon they agree to certain terms with a stipulated consideration. The Contract Act, 1872 defines contract under the interpretation clause, S. 2 (h) as an agreement enforceable by law. [i] For such a contract to be valid it is important that there is a proper offer made, acceptance of the same and consideration to be paid. There are various kinds of contract which are to be chosen based on the subject matter of the agreement to be dealt with. The various kinds of contracts include Non-Disclosure contract/agreements, Joint venture agreements/contracts, Limited Partnership Contract, and many more. Similarly, in the current era of developments when the corporate world is getting more tech-savvy, Technology Transfer Agreements or Technology Transfer Contracts have emerged as one of the recent types of contracts with requires due consideration.

TECHNOLOGY TRANSFER AGREEMENTS/CONTRACTS

Technology Transfer Agreements also referred to as TTA, in this era of technologies has been considered the most convenient and easy to deal with the process of acquiring as well as transferring technology and technological know-how. Now, as we know that today no invention or development is left without protection in the form of patents, copyrights, etc. the transfer of indigenous research and developments by the host companies or countries to others that forms an integral part of the TTAs includes within its ambit aspects of Intellectual Property Rights among other laws. [ii]

Technology Transfer Agreements/contracts are such kinds of contracts wherein one company (referred to as the Licensor licences or renders its registered industrial and intellectual property rights and also technical know-how to the second party company that is often referred to as Licensee. [iii] TTAs are very similar to the Trademark License Agreements with regard to the certain amount paid initially for the assignment of intellectual property rights or other industrial rights while during the tenure of the contract certain percentage is paid as royalties on the sale of the products that are made by the licensee under the contract. It is said that the Technology Transfer Agreement is one among the widely used strategies taken up by the corporations dealing mostly in technology which has helped them venture into new competitive arenas without the internal investment of the required technology being built in its own plant. [iv]

ORIGIN AND CURRENT STATUS OF TECHNOLOGY TRANSFER

From the very time, human lives marked its existence, we are aware of inventions and discoveries of new equipment. This has been continuing since the Stone Age if we look back the in the time. From the invention of fire to the needle, and many other types of equipment which were considered new technology then were found out at different points of time. Since then humans have not looked back. They have always strived to gain and improve on to what already existed. This is the very reason humans are said to be different from any other living creature. But the concept of securing one's invention or discoveries and technology transfer has been considered to be one of a very recent origin in India. However, for other countries across the globe technology-transfer is not a modern concept but has been one of the basic pillars for their economic developments.

Now if we look into the histories of various countries like China, Europe or any other western countries we find it as playing a pivotal role in the economic growth of not just the developed but also the developing countries. With all the positives, the success has not been unqualified and has witnessed various shortfalls for reasons unknown. Even after that, the concept of technology transfer is still in use.

The massive technological and scientific advancements in the current times have resulted in huge demand for high level technical and scientifically skilled manpower for taking the full advantage of the newly imported technology and thus, in turn boosting the economic growth. This has also increased the significance of Technology Transfer agreements. [v]

LEGAL ASPECTS OF TECHNOLOGY TRANSFER AGREEMENT

I. Nature of the contract

A technology Transfer Agreement is similar in nature to that of a license agreement as also a Know-How Agreement. The license agreement relates to intellectual property rights that include trademarks, patents and many more whereas an agreement from Know-how includes in its ambit the transfer of skills and required information, those which lack statutory recognition. The two contracts, however, differ at one point, i.e. on the confidentiality clause. A TTA is one which broadly circumvents around not just transfer of technology but the mode of such transfer and also the terms and conditions for its use. It is said that the transfer can take place through a document or it can also be done with the help of training and assistance, software devices or by means of selling machinery, its components or any other tech-based raw materials. [vi]

In a TTA the relationship that is established by law between the two parties, i.e. the transferor and the transferee is of contractual nature wherein there is consensus ad idem while the transferor transfers the technology and the transferee acquires it. Agreement of Sale or Assignment of Intellectual Property Rights or even License agreements is held to be the various legal methods/arrangements for transfer of technology. [vii]

II. Constituents of a TTA

Since these TTAs are legally enforceable in the court of law, it is important it lays down basic elements or requirements to be adhered by either parties or both the parties. Thus the main components of the Technology Transfer Agreements/Contracts include the description of Patent or technology that is to be transferred, Trademark if required (since technologies generally do not contain Trademarks), Brand Name of the product or equipment transferred, Royalties to be paid by the Licensee during the term of the contract or any other Management or Technical fees, Duration of the contract, a Confidentiality clause in cases where technical assistance or know-how is shared, Assistance to the party regards establishing R&D, terms regarding the performance of Guarantee, provision for Training and other restrictive practices. [viii]

Various judicial trends have been seen in regard to the concept of Technology Transfer. Technology Transfer Contracts in the case of M/S. Whirlpool of India Ltd. v. CCE & St, New Delhi , 28 August 2014 [ix] was held to be enforceable under the Indian Contract Act, 1872. In this case, Whirlpool was charged with Service Tax on a fee for Technology Transfer that was paid to Whirlpool for the technical Know-how.

Again in the case of India Pistons Ltd. v. Commissioner of Central Excise, Chennai-III , 29 August 2005 [x] ; Technology Transfer was held different from Engineering Consultancy Services.

Technology Transfer helps to identify new business opportunities which ultimately results in enhanced technical know-how and a competitive advantage over others. With the arena for business getting broadened there is also an increase in the rights and obligations that are conferred onto the parties indulging. More awareness of technology systems rights obligations has laid to more Technology Transfer Agreements. [xi]

As we have already seen that in the current eras where there are huge investments in technology creation, it must also be understood that nothing comes free of cost. Investments in technology are risky as well as expensive. Not all companies are well equipped to go through an innovation process. One among the important decision making variable in these days for the companies is whether to develop the same, in-house or acquire it from outside. In the latter case, comes the role of TTAs to guide and channelize the process of pooling expertise to enter new markets in accordance with law; for the commercialization of a new product or service or improvement of an existing product or process and to get faster entry into the market with a competitive advantage.

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LEAST-DEVELOPED COUNTRIES (LDCS)

The workshop provided an opportunity for participants to reflect on the practical experiences and continuing challenges faced by LDCs in harnessing technological advances for their economic progress. It provided a platform for dialogue on the technological needs and priorities of LDCs, while allowing for an in-depth analysis of technology transfer programmes reported by developed members in furtherance of their commitments under Article 66.2 of the TRIPS Agreement .

Speaking at the opening session of the workshop, WTO Deputy Director-General Johanna Hill indicated that since 2003, when the TRIPS Council agreed on the transparency mechanism for the implementation of Article 66.2 of the TRIPS Agreement, developed members have submitted 318 reports detailing various actions taken or envisaged in terms of technology transfer.

She noted that the WTO Secretariat has been organizing this workshop since 2008 to help LDC members and observers analyze these reports and engage in direct dialogue with the reporting delegations. The reports and the discussions in the TRIPS Council offer a wealth of comprehensive information essential to carry out the necessary detailed analytical work.

Ambassador Pimchanok Pitfield of Thailand, Chair of the Council for TRIPS, further explained that these reports help members understand the range and character of technology transfer mechanisms and can help determine how best to shape programmes to meet LDC priority needs. 

Stressing the importance of the connection created between the workshop and the TRIPS Council meeting, she encouraged participants, particularly LDC members, to use the platform to examine the reports in more detail than is possible at formal Council meetings.

Health, agriculture and the environment remained among the identified priority needs, as outlined by Ambassador Kadra Ahmed Hassan of Djibouti, coordinator of the WTO's LDC Group. She also pointed out that the programme was designed to actively involve all participants in the subsequent meeting of the TRIPS Council, thereby increasing the impact of the workshop on the Council's work in this area.

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• Using Global Human Resources

Process to Link Source and Destination Assignments for Global Transfer

Use the Migrate Employment Data process to link the source and destination assignments during a global transfer. By linking the assignments, you can view the complete assignment history of the source and destination work relationships.

Here's what the process does:

Selects all active workers (employee, contingent worker, and nonworker) who don't have their termination dates populated in the work relationship and for whom the source assignment ID isn't populated.

Identifies the source and destination assignment IDs for the selected workers based on these items:

Action occurrence ID.

Comparison of the assignment start date of the destination assignment and assignment end date of the source assignment.

Once identified, the process stores the assignment ID of the primary assignment as the source assignment in the destination assignment.

The Migrate Employment Data process will populate the SOURCE_ASSIGNMENT_ID field in the PER_ALL_ASSIGNMENTS_M table only for global transfer.

During a global temporary assignment, the assignment ID isn't stored as the source assignment ID.

Points to Consider

You can run this process to only link your existing global transfer transactions. Change legal employer transactions initiated from the UI after release 20B will be linked by the application.

You can rerun the process, but the process will only select data where the source assignment ID isn't populated for a global transfer action.

When you run the process, it includes all active workers and processes their historical records including those from their earlier work relationship. For example, the process will also include the historical records of a currently active rehired worker.

Process Parameter

The Migrate Employment Data process uses the Link Global Transfer assignments parameter. This parameter links the source and destination assignments related to global transfer by updating the PER_ALL_ASSIGNMENTS_M table.

View History of Assignment Updates

After you have linked the source and destination assignments, you need to set the ORA_PER_EMPL_DISPLAY_GT_HISTORY profile option to view a continuous history of assignment updates across legal employer changes. For more information about this profile option, see the Employment Profile Options topic in the Related Topics section.

Related Topics

• What are scheduled processes?
• Submit Scheduled Processes and Process Sets
• Employment Profile Options

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Lesson 11 Assignment Technology case

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Student Protest Movement Could Cause a Tumultuous End to School Year

Protesters were arrested at the University of Minnesota and Yale, and the House speaker, Mike Johnson, said he would come to Columbia to speak to Jewish students about antisemitism on campuses.

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By Troy Closson

As a wave of pro-Palestinian activism on college campuses showed few signs of abating on Tuesday, the demonstrations have raised new questions about what shape the end of the semester may take for thousands of students across the United States.

At Columbia University, where the arrests of more than 100 protesters unleashed a flurry of national protests, students will have the option to attend their last week of lectures remotely for safety reasons. At the University of Texas at Austin, protesters announced plans to occupy a campus plaza and said that, at least for them, “class is canceled.”

And at the University of Michigan, administrators were already looking ahead and bracing for graduation. They set up designated areas for demonstrations, and agreed to “generally be patient with lawful disruptions.”

“Commencement ceremonies have been the site of free expression and peaceful protest for decades,” the university said in an online message, adding, “And they will likely continue to be.”

The steps are an acknowledgment that the last weeks of the spring could be among the most difficult for administrators at some of the nation’s most prestigious universities. On Tuesday, the campus police at the University of Minnesota took nine people into custody after they erected a protest encampment, following dozens of arrests at Yale and New York University.

Other demonstrations continue to emerge from coast to coast, including at the University of New Mexico and Emerson College. At California State Polytechnic University, Humboldt, students took over a campus building, and barricaded the exits with chairs and trash bins.

The pro-Palestinian student movement has disrupted campus life, especially for Jewish students. Many have said they no longer feel safe in their classrooms or on university quads as the tone of protests at times has become threatening. Speaker Mike Johnson said he would meet with Jewish students at Columbia University on Wednesday and give remarks about the “troubling rise of virulent antisemitism on America’s college campuses,” according to a news release.

At the same time, many school leaders may face the possibility of graduation ceremonies transforming into high-profile stages of protest over the war in Gaza.

No matter how administrators approach these final weeks, the stakes are uniquely high for students who are graduating. Many graduated from high school in the first months of the coronavirus pandemic, and never walked across the stage or celebrated alongside their classmates.

The tumult on campuses escalated after Columbia’s administration called in the police last week to arrest student protesters who had organized a large encampment on a school lawn and refused to leave.

At the New School in Manhattan, where protesters have set up tents inside a school lobby, a couple dozen students formed a picket line on Tuesday as they chanted to the beat of a drum. When one student was asked how long protesters intended to continue the demonstrations, she said there was no immediate end in sight.

“We’re demanding something,” said the student, Skylar Schiltz-Rouse, a freshman who joined the protest on Monday. “So if it doesn’t happen, we’re going to have to keep going.”

It was not yet apparent whether the turmoil at schools would prompt additional arrests, or whether college leaders would adopt a less aggressive playbook as the semester winds down.

Many administrators, watching the uproar at Columbia, seem to be choosing other strategies to handle the protests. Several universities, including Harvard and schools in the California State University system, have shut down parts of their campuses in an effort to avoid major clashes and conclude the school year quietly.

“What you’re seeing is an inability to find spaces for dialogue and conversation and understanding,” said Benjie Kaplan, the executive director of Minnesota Hillel, a Jewish student group.

After school leaders often inflamed unrest with their initial responses, some have begun to hit the brakes.

At Barnard College, Columbia’s affiliate school, many student protesters had received interim suspensions for last week’s tent demonstration. But in a Monday night email, the school’s president, Laura Ann Rosenbury, extended an olive branch.

The school would lift most of the suspensions and restore students’ access to campus, she said, as long as they promised to follow the rules. Those who still face discipline would have access to hot meals, mental health counseling and academic support. And with a professor’s permission, they could also finish out the semester virtually.

“I strongly believe that exposure to uncomfortable ideas is a vital component of education, and I applaud the boldness of all of our students who speak out,” Ms. Rosenbury said in the email, her first message since the arrests of protesters on Columbia’s campus last week, several of whom were Barnard students.

“But,” she said, “no student should fear for their safety while at Barnard.”

She added: “In these last few weeks together before our seniors graduate, let’s be good to one another.”

Some pro-Palestinian students, though, may regard commencement as an opportunity.

Protesters at many schools have vowed to press on until their universities divest from companies with ties to Israel, often chanting “We will not stop. We will not rest.” Administrators are on high alert for demonstrations or threats, as tens of thousands of families travel to campuses in May and June to attend graduations.

Dagmar Michelson, a senior at the New School, was unsure if protests were planned for the university’s May 17 ceremonies. But if they are, she added, she would not be upset.

“It’ll be nice for those who haven’t recognized their privilege,” she said.

Earlier this month, the University of Southern California cited security concerns when it canceled a speech by its valedictorian , a first-generation Muslim student who questioned the university’s explanation. The school later said it would also not host outside honorees.

Already, students have organized demonstrations meant to disrupt cherished college traditions.

At Michigan, several dozen protesters took over a celebration for honors students last month, waving signs that read “Divest Now” and interrupting a speech by the university’s president, Santa J. Ono, according to The Michigan Daily .

“Protest is valued and protected,” Dr. Ono said in a statement after the event. “Disruptions are not.”

Shira Goodman, the senior director of advocacy at the Anti-Defamation League, said the disturbance at Michigan “may unfortunately be a harbinger for what’s to come.”

The group is concerned about the potential of harassment or “identity-based hostility” toward Jewish families at graduation ceremonies. “We remain deeply concerned,” Ms. Goodman said in a statement.

Some colleges are now stepping in to promise Jewish students a safe haven. Brandeis, a historically Jewish university in Massachusetts, said this week that it would extend its deadline for transfer applications in response to campus protests.

The president, Ronald D. Liebowitz, said the school would provide an environment “free of harassment and Jew-hatred.”

Other schools have had little time to look ahead to the future as they reel from the last few days.

At N.Y.U., where at least 120 people were arrested on Monday night after refusing to vacate a plaza, several students said on Tuesday that they would continue to voice support for Palestinians, and were unconcerned that their protest activities might upend final essays and assignments.

The university had said it turned to the police because “disorderly, disruptive and antagonizing behavior” of protesters created safety concerns. But on Tuesday, a professional faculty organization shot back.

The school’s chapter of the American Association of University Professors called “much of their account” false, referring to the administration, and criticized the decision to call the police as an “egregious overstep.”

And at Columbia, the university’s president, Nemat Shafik, is facing the threat of a formal censure resolution from the school’s faculty for her handling of demonstrations. Many Republican lawmakers are also still calling for her resignation, arguing that the school has failed to safeguard its Jewish students.

The decision to offer hybrid classes at Columbia seemed to be a tacit acknowledgment that many students were, at the very least, uncomfortable there. Many are expected to log on from their dorms and apartments. Others might attend from a large protest encampment that remained in the center of campus.

Along with the demonstration, occasional outbursts at rallies have occurred outside the campus’s gates over the past several days. But otherwise, Columbia has been quiet during what is typically a bustling final week of the semester.

Angela V. Olinto, the university provost, said in an email on Monday night that if even one student wanted to finish out the year online, professors should offer hybrid classes — or move to fully remote if that was not an option.

“Safety is our highest priority,” Dr. Olinto said.

Maia Coleman , Eliza Fawcett , Colbi Edmonds , Jose Quezada , Ernesto Londoño , Kaja Andric , Coral Murphy Marcos , Dana Goldstein , Karla Marie Sanford and Stephanie Saul contributed reporting.

Troy Closson reports on K-12 schools in New York City for The Times. More about Troy Closson

IRS PLR: Transfer of Group Trust Retiree Benefit Plan Interest Not Impermissible Assignment (IRC §401)

By Bloomberg Tax Automation

The IRS has published a private letter ruling on Section 401 regarding distribution of qualified pension, profit-sharing, and stock bonus plans. The IRS ruled that the transfer of a group trust retiree benefit plan’s interest in one group trust to another group trust, both of which are participating trusts in Taxpayer, is not an impermissible assignment under the relevant section. [PLR 202417010]

This story was produced by Bloomberg Tax Automation, and edited by Bloomberg Tax staff.

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