This article examines the politics and the process of international technology transfer. United States government agencies that help create and transfer technology are reviewed along with many of the agencies that are charged with controlling the technology transfer process. International agencies that are involved in technology transfer and some of the treaties that guide the process of transfer are also reviewed. The procedures for patent and copyright protection are explained and the international treaties and conventions that prescribe methods and legal structures for intellectual property protection are reviewed. Illegal international technology transfer and the efforts to thwart inappropriate technology transfer are also reviewed.
Keywords: Arms Export Control Act; Copyright Infringement; Dual-Use Technology; Intellectual Property Rights; International Technology Transfer; Military Technology; Patent Infringement; Product Licensing
International technology transfer has been occurring for centuries. World trade, wars, conquest, and empire building have all contributed to the redistribution of technology around the world. In the millennium of the global economy, international technology transfer has become contractually complex and politically important.
Technology transfer is often a complex process that requires cooperation between organizations and within the various departments of a receiving organization. The transfer process must be well planned and executed in order to assure an economic and effective transfer and integration of the new technology (Walker & Ellis, 2000). In the United States technology transfer is governed by numerous laws and government policies. The United States Department of Defense (DoD), the national laboratory system, universities, and private research and development centers have extensive programs in place to improve access to new technologies.
Structured technology transfer management is designed to provide designated entities or individuals access to new technology for development or repurposing. It is also designed to prevent undesired entities or individuals from gaining access to new technologies that may be used in a manner that is detrimental to the inventor, owner, or country of origin of the technology. Expanding access to new technology has enabled the development of new business, new technology, and economic growth. Preventing access to new technologies has helped to assure the protection of intellectual property and patents and has prevented aggressive militarist or terrorist groups from developing war fighting capabilities (Corr, 2003).
Technology transfer from the United States government has claimed some very notable achievements. The Internet and World Wide Web applications got their start as a military research project. The global positioning system (GPS) was a military technology to help manage military logistics and war fighting operations.
United States Government Agencies Involved in Technology Transfer
Several United States government agencies are charged with enforcing laws and preventing undesirable parties from obtaining protected technology. The Directorate of Defense Trade Controls of the State Department regulates the export of weapons in accordance with the Arms Export Control Act of 1976. The Bureau of Industry and Security of the Commerce Department regulates export of dual-use items that can be used for military as well as industrial purposes under the Export Administration Act of 1979. The DoD Provides input on which items should be controlled by the State Department or the Department of Commerce. The Department of Homeland Security works to enforce export control laws and regulations through border inspections as well as the investigation of violations of the laws. The Department of Justice Investigates export control violations and prosecutes suspected violators (Barr, 2008).
Several agencies of the United States government have federally funded laboratories that develop new technologies, products, and applications to address national needs. These laboratories have active partnerships with many non-federal organizations, including private industry, universities, state and local governments, and international organizations designed to facilitate technology transfer. United States government agencies supporting national laboratories include:
- Department of Agriculture (USDA)
- Department of Commerce (DOC)
- Department of Defense (DoD)
- Department of Energy (DOE)
- Department of Health and Human Services (HHS)
- Department of Homeland Security (DHS)
- Department of the Interior (DOI)
- Department of Transportation (DOT)
- Department of Veterans Affairs (VA)
- Environmental Protection Agency (EPA)
- National Aeronautics and Space Administration (NASA) ("Federal Laboratory Technology Transfer…," 2009).
Each of the federal laboratories has a technology transfer office that helps collaborators work through the transfer process. Both domestic and international technology transfer helps to bring new products, medical treatments, services, and innovations that can solve local, regional, and global problems as well as provide economic stimulus ("Federal Laboratory Technology Transfer," 2009).
International Organizations Involved in Technology Transfer
There are numerous international organizations that have played a role in the technology transfer process. The United Nations Research Institute for Social Development (UNRISD) has supported numerous research projects to guide governments, nonprofit agencies, and private business in the development and transfer of appropriate technologies ("What is UNRISD?" 2009). The Directorate for Science, Technology and Industry of the Organization for Economic Cooperation and Development (OECD) has supported research and provided assistance to governments and industry around the world in technology development, transfer policies, and programs ("What's new," 2009). The World Bank has also supported efforts to facilitate technology transfer and has established a program through the International Finance Corporation to aid in transfer efforts and projects ("IFC Technology Transfer," 2009).
The World Trade Organization (WTO) has worked to develop and promote standards and laws on technology transfer and intellectual property rights protection to help the transfer of technology while protecting patents ("Technology Transfer," 2009). Among the many issues that the WTO has worked to address is how technology is protected when a company that owns the technology or other intellectual property transfers information about the technology to an affiliate in another country. When technology or knowledge is transferred to the affiliate there is a risk that employees may leave the affiliate and take sensitive technology and information with them to a new employer (Branstetter, Fisman & Foley, 2006).
Within the nuclear industry, the International Atomic Energy Agency (IAEA) plays a unique role in addressing technology transfer. The major goal of the IAEA is to monitor and thus hopefully prevent unsanctioned nuclear proliferation. This involves a complex process of monitoring the movement and use of nuclear material and the equipment that can be used to make weapons of mass destruction from the material. One objective is to assure that nuclear technology is not inappropriately transferred (Andrés, 2008).
Intellectual Property Protection
One of the most important aspects of international technology transfer is protecting intellectual property rights (IPR). The difficulty in protecting IPR varies by country and is highly dependent on the legal and business infrastructure of the receiving country. Intellectual property is protected by copyright and patent laws and the enforcement of these laws is not equal in every country around the world. Companies that export or transfer their technology are always at risk of patent infringement or copyright infringement.
The United States established its first Patent Office in 1803, and by 2012, the United States Patent Office and Trademark Office (USPTO) received over 500,000 applications per year. The USPTO is organized into examining technology centers, each specializing in specific fields of technology. Examiners review applications for patents and identify applications that claim the same invention and work to determine which was first ("General Information Concerning Patents," 2005).
The WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council is a leading international forum for IPR. Major IPR agreements include the Paris Convention for the Protection of Industrial Property (PCPIP), the Patent Law Treaty (PLT), the Patent Cooperation Treaty (PCT), and the Strasbourg Agreement Concerning the International Patent Classification (IPC). The PLT provides an array of formal requirements for a patent application, examination, and granting procedures to be followed by patent offices. The PCT provides a basis for examination of an international patent application. The SPLT outlines basic substantive patent law that were not addressed in the Paris Convention or the TRIPS Agreement (Kukrus & Kartus, 2007).
The Copyright Act of 1976 is the basis of copyright law in the United States, under which the Federal Copyright Office manages the process of registering copyrights. Once a work is filed with the Copyright Office a public record of the copyright claim is established ("Copyright Basics," 2008).
International action on the protection of copyrights dates back to the Berne Convention for the Protection of Literary and Artistic Works held in 1896. The Convention has been revised and updated several times since it was first developed. International activity and cooperation on copyright administration and protection accelerated after World War II. With the support of the United Nations Educational, Scientific, and Cultural Organization (UNESCO), the Universal Copyright Convention was adopted 1952 ("Basic Notions," 2009).
The World Intellectual Property Organization (WIPO) continues to work on copyright issues with countries around the world. The WIPO Standing Committee on Copyright and Related Rights (SCCR) meets frequently to discuss ongoing as well as emerging issues. In the early twenty-first century, discussions have focused on software, databases, and Internet distribution and content ("Copyright and Related Rights," 2009).
Licensing Technology in the Transfer Process
Intellectual Property Rights are the most valuable assets a company can own, and they can be the basis of economic development for countries that create or obtain intellectual property (Panda, Garg & Biswas, 2009). Not surprisingly, protecting intellectual property can be an expensive and complex process (Unkovic, 2009). Technology licensing is an important method of acquiring technology for many developing countries that do not have the financial resources to support domestic research and development (Vishwasrao, 1997).
Licensing products or technology to manufacturers or distributors in other countries offers several opportunities for a company to capitalize on intellectual property in international markets, including ownership, location, and internalization. In addition, product or name brand licensing can help to overcome barriers of entry to international markets that are protected by political or economic barriers (Henderson & Sheldon, 1994).
The majority of patent licensing agreements are concentrated in the automotive, chemicals, software, electrical and nonelectrical machinery, engineering, semiconductor, pharmaceutical, and biotech sectors (Caballero-Sanz, Moner-Colonques, & Sempere-Monerris, 2005). However the food and beverage industry also capitalizes on licensing products and brand names (Quelch, 1985).
Licensing also provides the patent or copyright owner the opportunity to expand into new markets with less investment, a means to displace risks when the licensee covers local costs, and, perhaps most important, to capitalize on existing investments with little expenditure. Licensing also allows owners to capitalize on maturing brands in a home market and gain added revenue from other markets where the product or name brand may appear to be new or was not previously available (Quelch, 1985).
Many companies rely on licensing practices that provide the patent holder a fixed fee licensing with production or selling rights for an exclusive country or region (Caballero-Sanz, Moner-Colonques, and Sempere-Monerris, 2005). In most cases licensing products or brands is less expensive then establishing a wholly owned subsidiary in a foreign market. Licensing is also often less expensive than independently developing a new product to compete against a brand name or a large manufacturing company (Kotabe, Sahay and Aulakh, 1996).
There are several aspects to licensing intellectual property and cross-border licensing increases that complexity. Tax consequences, payment, currency, and other financial challenges are important issues to consider when negotiating and developing international licensing agreements (Loza, Chotkowski, Stevens & Urbanchuk, 2006). As with any contractual arrangement, a licensing agreement must address all aspects of the relationship between parties involved. This includes, for example, the currency by which royalty payments will be made and the means of determining the amounts of royalties. The agreement must also address how taxes will be determined, managed, and paid in the domains of the licensee (Mottner & Johnson, 2000).
(The entire section is 6090 words.)