Technology Transfer




Partially adapted



Planning Stage





If negotiations are to culminate in a successful agreement, certain prerequisites must be met before negotiations get under way.


Well before an agreement is drafted, each party needs to determine its objectives for concluding a deal. This is an elementary but necessary rule of successful negotiation. Parties often do begin negotiations without being clear about the nature and scope of the contractual relationship they wish to establish. This may lead to ambiguity, misunderstanding and, even, distrust and bad faith between the parties as the negotiations proceed. Each party should enter a negotiation with well conceived and adequately supported goals so the process moves ahead in an orderly manner.

A technology transfer relationship often begins when one party submits an outline or preliminary proposal to another, offering rights to intellectual property or expressing interest in purchasing such rights. It may take a meeting or two to help define the market value of the technology or to decide how to structure the future relationship, especially if the technology is being transferred for the first time. Once these details have been worked out, one of the parties, usually the initiator of the proposed relationship, submits a written proposal to the other as the starting point for subsequent negotiations.

It is assumed that before writing such a proposal, the submitting party will have defined its goals and interests. The party receiving the proposal then needs to study it thoroughly.




Proposal analysis

The first step to be taken after receipt of a proposal is to appoint a technical group to analyse it, list all of the questions it raises and identify and request any additional information that is required from the party submitting the proposal. There should be no reluctance to do this; in fact, most parties who have submitted a proposal welcome questions and requests for information, for it indicates to them that the proposal is being taken seriously. It gives them a better idea of what is of particular interest to the other party, as well as any shortcomings of their proposal.

Information on the subject-matter of the proposal should also be sought from independent sources. Such information might relate, for example, to the nature and effectiveness of the technology being proposed, the market for the proposed product, the quality and production cost of the product, the potential sources of financing.

All the information received from the party submitting the proposal and from independent sources should then be reviewed thoroughly by the technical group. To the extent that the new information raises additional questions, these should again be posed to the proposing party or to the independent sources, until the technical group is satisfied that it has all the information it needs to formulate the preliminary structure of the relationship.




Preliminary structure for the relationship

Once the required information has been collected and analysed and it is determined that the proposal should be pursued, a preliminary structure (and, perhaps, alternative structures) for the relationship should be formulated and evaluated in terms of how it will meet needs and objectives. If a patent licence is being offered, the technical team should determine if pertinent know-how, trade marks, and/or copyrights should be included and should have some idea of the amount of training and on-going technical assistance required. In other situations, the agreement structure may require a technical services, engineering services or management services agreement. At times, a joint venture may be preferred or required relationship.




Planning stage suggestions

These are some suggestions for the planning stage:

→ Determine alternatives to completing the agreement. Even one alternative improves your negotiating strategy. The authors of Getting to Yes, from Harvard Negotiating Project, call this BATNA, Best Alternative to a Negotiated Agreement.

→ Consider the long-term benefits of the agreement. Don't be overly concerned with the short-term implications.

→ Look for areas of agreement between the parties, not areas of conflict.

→ Plan the major issues as independent units, not in sequence. This will avoid confusion if the issues are brought up out of your sequence.

→ Set ranges for your objectives, not specific points.