Technology Transfer and Intellectual Property Rights

Technology Transfer

Technology transfer refers to the commercialization of production methods, inventions, and innovations, as well as the transfer of knowledge from one entity to another. It involves the legal transfer of research, inventions, knowledge, skills, ideas, and intellectual outputs related to production methods and technologies from one place, institution, or country to another. In today’s globalized and liberalized world, technology transfer is increasingly relevant and feasible, allowing innovations and creations from one context to be effectively utilized elsewhere.

According to the Foreign Investment and Technology Transfer Act, 2075 BS, "technology transfer" refers to agreements between industries and foreign investors concerning:

Patents, designs, trademarks, goodwill, technical know-how, formulas, or processes.
User licenses, know-how sharing, or franchising of technical knowledge.
Provision of foreign technical consultancy, management, marketing services, or other technical skills or knowledge.

The Act clarifies that technology transfer encompasses activities such as the use of technology rights, know-how, formulas, processes, patents, foreign-owned trademarks, and the provision of foreign technical consultancy, management, and marketing services.

The Foreign Investment Policy, 2071 BS, further supports technology transfer initiatives.

Means of Technology Transfer

Assignment of rights
User's license
Know-how sharing
Franchising
Management contract
Direct investment by suppliers
Turnkey contract
Patent license contract
Supplier's representative
Joint venture
Appointment of skilled engineers and workers
Technology user institutions

Need and Justification for Technology Transfer

To expand and commercially utilize knowledge, skills, and capabilities.
To promote and optimally use new research, exploration, and innovation.
To commercialize technology.
To enhance quality, competitive production, and productivity.
To leverage the benefits of liberalization and globalization.
To build a knowledge-based society.

Prerequisites for Technology Transfer

Appropriate legal framework
Technology transfer policy
Investment-friendly environment
Availability of skilled human resources
Robust infrastructure arrangements
Effective management mechanisms
Foreign coordination and relations
Appropriate treaties or agreements

Opportunities for Technology Transfer in Nepal

By adopting open and liberal policies and embracing globalization, Nepal presents significant opportunities for technology transfer, including:

Adoption of open and liberal policies since 1990.
Legal guidance through the Foreign Investment and Technology Transfer Act, 2038 BS, and its updated version, 2075 BS.
Provisions under the Foreign Investment Policy, 2071 BS.
Bilateral Investment Protection and Promotion Agreements (BIPPA) with six countries and Double Taxation Avoidance Agreements (DTAA) with eleven countries.

Problems in Technology Transfer in Nepal

Ineffective implementation of technology transfer policies and laws.
Lack of integration and coordination among relevant institutional structures.
Insufficient development of skilled human resources capable of utilizing technology.
Lack of awareness about the benefits of technology transfer.
Inadequate government investment in the utilization, protection, and promotion of technology transfer.
Lack of a competitive industrial environment.
Absence of a technology transfer culture.
Dominance of traditional work practices.
Limited interest in adopting new, technology-friendly work practices.
Weak negotiation and economic diplomacy skills, leading to suboptimal foreign investment and technology transfer.

Solutions to Problems in Technology Transfer

Ensure effective implementation of technology transfer policies and laws.
Establish meaningful coordination among relevant institutions.
Prioritize the development, utilization, and maintenance of skilled human resources.
Raise awareness among all stakeholders about the benefits of technology transfer.
Ensure high government investment and commitment to the utilization, protection, and promotion of technology transfer.
Create a competitive and innovation-oriented industrial environment.
Develop a culture of technology transfer.
Replace traditional work practices with new, technology-friendly approaches.
Enhance foreign investment and technology transfer through robust economic diplomacy.

Technology Transfer Arrangements in Nepal

Legal Arrangements

Industrial Enterprises Act, 2073 BS
Foreign Investment and Technology Transfer Act, 2075 BS
Patent, Design, and Trademark Act, 2022 BS
Investment Board Act, 2068 BS
Company Act, 2063 BS
Copyright Act, 2059 BS

Policy Arrangements

Various provisions under the Foreign Investment Policy, 2071 BS

Institutional Arrangements

Ministry of Industry, Commerce, and Supplies
Ministry of Education, Science, and Technology
Department of Industry
Office of the Company Registrar
Department of Information Technology
Nepal Copyright Registrar’s Office

Intellectual Property Rights (IPR)

Intellectual property rights refer to the rights of creators or inventors over their inventions, innovations, creations, formulas, or compositions resulting from human intellectual efforts. Intellectual property is a unique creation of the human mind, including artistic works, novel inventions, or specific research outcomes. As the result of a creator’s effort and struggle, the right to ownership belongs to the creator or inventor. Thus, intellectual property rights are the legal rights of creators over their creations, technologies, or inventions.

Types of Intellectual Property Rights

Industrial Intellectual Property Rights
Copyright

Industrial Intellectual Property Rights

Industrial intellectual property rights include patents, designs, trademarks, trade secrets, geographical indications, utility models, and integrated circuits. In Nepal, the Patent, Design, and Trademark Act, 2022 BS, covers trademarks, patents, and designs.

Trademark

A trademark is a sign, symbol, word, or combination thereof used by a producer to distinguish their product. It is registered with the relevant authority to secure trademark rights. According to the Patent, Design, and Trademark Act, 2022 BS, a trademark is defined as a word, symbol, picture, or combination used by a firm, company, or individual to differentiate their goods or services. In Nepal, trademark rights can be renewed every seven years to remain valid indefinitely.

Patent

A patent refers to an invention, useful formula, composition, or new method or process. Per the Patent, Design, and Trademark Act, 2022 BS, a patent is defined as a new method or process related to the composition, operation, or transmission of a substance or group of substances, or a useful invention discovered through a new principle or formula. For example, the formula or idea for producing Coca-Cola is a patent, and its creator holds the patent rights, which can be secured by registering with the relevant government authority.

Design

A design refers to the structure, external appearance, shape, or aesthetic artistry of a manufactured product. According to the Patent, Design, and Trademark Act, 2022 BS, a design is defined as the shape, form, or configuration of an object created in any manner.

Importance of Industrial Intellectual Property Rights

To respect industrial intellectual property rights.
To protect industrial intellectual property rights.
To strengthen and organize industrial businesses.
To safeguard the creations and inventions of creators or inventors.
To utilize the intellectual talents of individuals nationally and internationally.
To leverage intellectual property for human welfare, development, and prosperity.

Concept and Development of Industrial Intellectual Property Rights

Legal practices for intellectual property began in 1937.
The Patent, Design, and Trademark Act, 2022 BS, was enacted.
The establishment of the Ministry of Industry led to the creation of the Department of Industry and the Office of the Company Registrar.
Nepal became a member of the World Intellectual Property Organization (WIPO) in 1997.
Nepal joined the World Trade Organization (WTO) on April 23, 2004, as the 147th member.
The Government of Nepal emphasizes the protection, promotion, and legal utilization of intellectual property.

Arrangements for Industrial Intellectual Property Rights in Nepal

Constitutional Arrangements

Development Policy (Article 51, Clause D): Increase investment in scientific research, innovation, and technological development, and protect scientific, technical, intellectual, and specialized talents.
Intellectual property (including patents, designs, trademarks, and copyrights) is listed under the federal jurisdiction (Schedule 5).

Legal Arrangements

Foreign Investment and Technology Transfer Act, 2075 BS
Patent, Design, and Trademark Act, 2022 BS
Copyright Act, 2059 BS, and Regulations, 2061 BS

Institutional Arrangements

Ministry of Industry
Department of Industry
Office of the Company Registrar
Nepal Copyright Registrar’s Office
Ministry of Science and Technology
Department of Information Technology
International bodies like WTO, WIPO, and TRIPS (Trade-Related Aspects of Intellectual Property Rights)

Copyright

Copyright refers to the rights related to the protection and safeguarding of literary, intellectual, creative, or original works, compositions, or creations. It prevents the misuse of a creator’s work, encourages further creativity, and ensures the protection of creations.

Need for Copyright

To protect creators’ works.
To prevent the misuse of creations.
To ensure organized use of economic benefits and rights from creations.
To safeguard intellectual property through copyright.
To establish the honor, identity, and dignity of creators.
To eliminate illegal copyright practices and protect intellectual achievements.
To develop a culture of protecting and promoting intellectual property.

Concept and Development of Copyright

Legal practices for copyright began in the UK with the Copyright Act of 1710.
In Nepal, the Muluki Ain, 2020 BS, legally addressed copyright protection (Section 31K of the Court Chapter).

Copyright Arrangements in Nepal

Constitutional Arrangements

Development Policy (Article 51, Clause D): Increase investment in scientific research, innovation, and technological development, and protect scientific, technical, intellectual, and specialized talents.
Intellectual property (including patents, designs, trademarks, and copyrights) is listed under the federal jurisdiction (Schedule 5).

Legal Arrangements

Institutional Arrangements

Nepal Copyright Registrar’s Office
Courts and Government Attorney’s Office
Nepal Police
Non-governmental organizations like the Nepal Copyright Protection Society

Key Provisions of the Copyright Act, 2059 BS

Economic and moral rights of creators are protected throughout their lifetime and for 50 years after their death.
For jointly created works, rights are protected for 50 years after the death of the last surviving creator.
Copyright holders may transfer all or some economic rights through a written agreement or permit their use with or without conditions.
Violations of protected rights result in penalties and compensation for damages.

Problems Related to Intellectual Property Rights

The Patent, Design, and Trademark Act, 2022 BS, is outdated and not aligned with contemporary needs.
Lack of new and practical intellectual property policies.
Unsatisfactory implementation of the Copyright Act, 2059 BS, and Regulations, 2061 BS.
Weak enforcement of existing laws, allowing counterfeit products to gain legitimacy.
Lack of awareness about intellectual property rights.
Low prioritization of intellectual property protection by producers and creators.
Weak government regulation, supervision, and monitoring.
Low government priority and importance given to intellectual property protection.
Weak compliance with international commitments on intellectual property protection.
Inadequate systems for collecting and documenting information on intellectual property misuse.
Shortage of skilled, capable, and knowledgeable personnel in relevant institutions.
Lack of coordination among legal, institutional, and operational aspects.

Solutions to Problems in Intellectual Property Rights

Update the Patent, Design, and Trademark Act, 2022 BS, to align with contemporary needs.
Formulate and implement new, practical intellectual property policies.
Ensure effective implementation of the Copyright Act, 2059 BS, and Regulations, 2061 BS, with clear standards.
Strengthen enforcement of existing laws to prohibit counterfeit products.
Raise awareness among all stakeholders about intellectual property protection.
Encourage producers and creators to actively protect their intellectual property.
Regularize and make objective government regulation, supervision, and monitoring.
Establish high government commitment to intellectual property protection.
Robustly implement international commitments on intellectual property protection.
Develop systems for collecting and documenting information on intellectual property misuse.
Build skilled, capable, and knowledgeable human resources in relevant institutions.
Ensure proper coordination among legal, institutional, and operational aspects.

2.6 Technology transfer (including intellectual property rights)

Technology Transfer and Intellectual Property Rights