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- IP Infringement & Enforcement
- IP Licensing & Commercialisation
- Technology Transfer Agreements
- Brand Protection & IP Strategy
Technology Transfer Agreements
A technology transfer agreement is the contract under which one business gives another the right to use its technology: patents, designs, software, formulas, drawings and unwritten know-how, usually with training and technical support. It can be an outright assignment or, more often, a licence for a field, a territory and a period.
In India these agreements are governed by the Indian Contract Act, 1872 and the statute for each right. The Patents Act, 1970 requires a patent licence or assignment to be in writing and registered, and section 140 makes certain restrictive conditions void. Payments to a foreign licensor are also subject to tax and foreign exchange rules.
When you need it
When licensing technology from abroad
An Indian manufacturer taking a process, a formulation or a product design from a foreign company.
When licensing your own technology out
A business that has developed a product or process and wants others to make or sell it for a royalty.
When working with a university or research institute
Research results usually belong to the institution and are licensed to the business that will commercialise them.
In a joint venture or contract manufacturing deal
One side contributes technology. The terms decide what happens to it, and to improvements, when the relationship ends.
When buying a business for its technology
The buyer needs the know-how, the people who hold it and the right to use it, not only the registered rights.
How the process works
Five stages, from identifying the technology to completing the transfer. Timings are typical, not promised.
- 1
Identify the technology
One to two weeksList what is being transferred: patents and applications, designs, software, documents, and know-how held by people. Check who owns each item and whether anyone else has rights in it.
Documents
- Patent and design numbers
- A description of the know-how and documentation
- Any earlier licences
- 2
Agree the grant
Depends on the partiesDecide between an assignment and a licence, and for a licence the field of use, territory, exclusivity, duration, the right to sub-license and the right to export.
- 3
Agree the commercial terms
Alongside the grantFix the lump sum, the running royalty and how it is calculated, minimum royalties, milestones, technical assistance and training, and who pays for what.
- 4
Draft the agreement
Commonly two to four weeksCover delivery and acceptance of the technology, confidentiality of know-how, improvements made by either side, warranties and performance guarantees, infringement claims by third parties, termination and use after termination.
- 5
Sign, register and deliver
At and after signingStamp and sign the agreement, register a patent licence or assignment with the Patent Office, complete any tax and foreign exchange formalities, and carry out the handover of documents and training.
Common questions
An assignment transfers ownership of the technology permanently. A licence allows its use on agreed terms while the licensor remains the owner and can, unless the licence is exclusive, license it to others.
Yes. Under sections 68 and 69 of the Patents Act, 1970, an assignment or licence of a patent has to be in writing, setting out all the terms, and the person who acquires the interest applies to the Controller to have it entered in the register.
Section 140 of the Patents Act makes certain conditions void, including requiring the licensee to buy unpatented articles only from the licensor, exclusive grant-back of improvements, and barring a challenge to the validity of the patent.
By contract and by the law of confidence. India has no separate statute on trade secrets. The agreement should define the confidential information, limit who may see it, and say what must be returned or destroyed when the agreement ends.
Whoever the agreement says. Common positions are that each side owns its own improvements and licenses them to the other, or that the licensee’s improvements are licensed back on a non-exclusive basis.
Yes. Royalty and lump-sum payments for technology are permitted under the foreign exchange rules, subject to the tax withheld at source under the Income-tax Act and any relief under a tax treaty. The pricing between related parties has to be at arm’s length.
Related
To discuss a technology transfer, write to info@ireniclegal.com or call +91 96547 47331. Written by Adv. Kanika Marwaha Bindal; last updated 7 October 2026.