Prompt Pack Technology Transfer Agreement

Technology Transfer Agreement

When to use this

Use this skill when:

• A company (Transferor) is selling or permanently transferring ownership of a technology (including patents, know-how, technical processes, trade secrets, and related IP) to another company (Transferee).
• A company is being acquired and the technology transfer is part of the asset sale (as distinct from a share purchase — see [[prompt-pack-share-purchase-agreement]]).
• A government-funded technology development project requires the results to be transferred to a private commercialization entity.
• A company is spinning out a business unit and transferring the underlying technology to the new entity.
• A joint venture is dissolving and the technology it has developed needs to be allocated between the parties.

Key distinction from technology licensing: A technology license grants temporary use rights; the licensor retains ownership. A technology transfer (assignment) permanently transfers ownership (or transfers substantially all economic rights) to the transferee. The transferor will typically have no ongoing rights to use the technology unless a license-back is granted.

Required inputs

Optional inputs

• License-back — whether the Transferor retains a license to use the technology after transfer (e.g., in fields of use it currently operates in).
• Training and technical support — the Transferor's obligation to assist the Transferee in implementing the technology; critical for know-how transfers.
• Performance milestones — conditions or obligations on the Transferee (e.g., commercial use within 3 years, minimum production levels) tied to payment terms or reversionary rights.
• Export control compliance — if the technology is subject to US EAR, ITAR, EU dual-use, or KSA/UAE export controls.
• Non-compete — whether the Transferor agrees not to develop or deploy the same technology in competition with the Transferee for a defined period.

Document structure

1. Definitions

   • Technology: all patents (listed in Schedule A), know-how, trade secrets, technical documentation, designs, formulas, processes, data, and any other IP comprising or necessary to practice [describe the technology].
   • Know-how: unpatented technical knowledge, experience, methods, and data necessary to practice the Technology.
   • Background Technology: IP owned by the Transferor that is not being transferred but may be necessary to use the transferred Technology; subject to a license-back if required.
   • Improvements: modifications or enhancements to the Technology created by either party.
   • Effective Date: date of transfer completion or, if staggered, defined per tranche.

2. Assignment and transfer of technology

   • IP assignment: Transferor hereby assigns and transfers to Transferee, with effect from the Effective Date, all right, title, and interest in and to the Technology, including:
     • All patents and patent applications listed in Schedule A (in all jurisdictions).
     • All know-how and trade secrets comprising the Technology.
     • All technical documentation, manuals, designs, drawings, and data embodying the Technology.
     • The right to apply for patent protection in any jurisdiction for inventions embodied in the Technology.
     • All existing licenses and sublicenses granted by Transferor in relation to the Technology (or state "Transferor will novate/terminate existing licenses as agreed").
   • Form of assignment: assignment of patents requires formal written instruments in each jurisdiction; the main Agreement is supplemented by jurisdiction-specific IP assignment deeds (see Schedule B for short-form assignments for registration).
   • Title warranty: Transferor represents that it is the sole owner of the Technology free and clear of all liens, encumbrances, and third-party rights.

3. Know-how and technical documentation transfer

   • Within [30/60] days of the Effective Date, Transferor will deliver to Transferee:
     • Complete technical documentation and specifications.
     • All source code, design files, and prototypes.
     • All test data, experimental results, and validation records.
     • A list of key technical personnel with expertise in the Technology.
   • Know-how transfer plan: agree a detailed schedule (Schedule C) specifying what will be delivered, when, and in what format.
   • Verification: Transferee has [30] days after delivery to verify completeness; disputes about completeness escalate to technical experts.

4. Training and technical support

   • Initial training: Transferor provides [X weeks/months] of training to Transferee's engineers and technical personnel.
   • On-site assistance: Transferor provides [X days] of on-site technical assistance to help Transferee implement the Technology in its facilities.
   • Remote support: Transferor provides [X hours/months] of remote technical support post-training.
   • Documentation: Transferor will update documentation based on questions arising during training.
   • Knowledge transfer completeness: both parties sign a "Knowledge Transfer Completion Certificate" confirming that the know-how has been successfully transmitted (this is the Transferee's acknowledgment and limits the Transferor's post-transfer support obligation).

5. Consideration and payment

   • Lump sum: [amount] payable [on execution / in installments per Schedule D].
   • Milestone payments: tied to: (a) delivery of technical documentation; (b) completion of training; (c) Transferee's successful implementation (first production run); (d) first commercial sale.
   • Royalty tail: in addition to upfront payment, [X%] of net revenue from sales of products incorporating the Technology, for [Y years] from first commercial sale.
   • Consideration for know-how vs. patents: consider separate valuations for patent-protected elements (value may decrease if patents expire) vs. know-how (value is ongoing if secrecy maintained).
   • Tax: clarify whether payments are inclusive or exclusive of VAT; address withholding tax on royalty components.

6. Performance milestones and reversionary rights

   • If the Transferee fails to commercialize the Technology within [X years], the Transferor may:
     • Require the Transferee to license the Technology back to the Transferor.
     • Or: reclaim ownership of specific patents if they have not been worked by the Transferee.
   • These provisions are not standard in all transfers; include where the Transferor has concerns about the Transferee's commercialization capability or where a government grant condition requires technology utilization.

7. License-back to Transferor

   • If the Transferor needs to continue using aspects of the Technology (e.g., in different products or markets), include a license-back:
     • Scope: non-exclusive license for the Transferor to use the Technology in [specified field / existing products].
     • Royalty: [royalty-free / agreed royalty].
     • Duration: perpetual or [X years].

8. Background technology license

   • If the Transferee needs access to Background Technology (IP retained by the Transferor but necessary to use the transferred Technology):
     • Licensor grants Transferee a non-exclusive license to use Background Technology solely as necessary to use the transferred Technology.
     • The Background Technology license is strictly limited to the stated purpose and terminates if the Transferee no longer uses the transferred Technology.

9. IP registration and recordal

   • Transferor must execute and deliver all documents necessary to record the assignment of patents in each jurisdiction.
   • Costs: Transferee bears the costs of patent assignment recordal.
   • Timeline: Transferor must sign and deliver jurisdiction-specific assignment documents within [15] business days of Transferee's request.
   • Cooperation: Transferor cooperates with patent prosecution for any pending applications being transferred; signs all necessary papers.

10. Representations and warranties (Transferor)

    • Sole owner of the Technology; no joint owners.
    • No liens, licenses, or encumbrances affecting the Technology (except disclosed licenses).
    • No pending or threatened IP infringement claims affecting the Technology.
    • Patents are valid and subsisting to the Transferor's knowledge.
    • Know-how has not been disclosed to any third party except under confidentiality obligations.
    • Technology does not infringe any third party's IP rights to the Transferor's knowledge.
    • No government funding restrictions apply to the transfer (see Jurisdictional notes on Bayh-Dole / government grant conditions).

11. Post-transfer obligations

    • Transferor must not use the transferred Technology after the Effective Date except under any license-back.
    • Transferor must promptly refer to Transferee any inquiries or communications received from third parties about the Technology.
    • Non-compete: [if agreed] Transferor agrees not to develop or commercialize any technology substantially similar to the transferred Technology in [territory/field] for [X years].

12. Export control compliance

    • If the Technology is subject to export controls (US EAR/ITAR; EU dual-use Regulation; UAE Strategic Goods and Materials Regulation):
      • Transferor must identify any export control restrictions applicable to the Technology.
      • Transferee must obtain any required export licenses or authorizations.
      • The transfer is conditioned on obtaining required export approvals.
      • Neither party may transfer the Technology to any restricted country or entity.

13. Confidentiality

    • Know-how and trade secrets remain confidential even after transfer; both parties maintain confidentiality of information shared during the transfer process.
    • Transferee protects know-how with at least the same standard of care as its own trade secrets.

14. Governing law and dispute resolution

Jurisdictional notes

UAE — patent assignment

• UAE Patent Law (Federal Law No. 11 of 2021): patent assignments must be registered with the Ministry of Economy (IP Department) to be effective against third parties.
• Assignment of unregistered patents/patent applications: assignment must also be registered.
• Know-how: protected as trade secrets under UAE law; no formal registration requirement.

KSA

• SAIP (Saudi Authority for Intellectual Property): patent assignments must be recorded with SAIP.
• Government-funded technology: if the technology was developed with Saudi government funding (KACST, KAUST, or research grants), check whether the funding terms require Saudi government approval or a first right of use before the technology is exported.
• WHT: 15% withholding tax on the purchase price attributed to know-how / royalties paid to non-resident transferors; obtain tax advice.

Lebanon / Egypt

• Patent assignments must be registered with the national patent office (OAPEC for Arab region patents; national IP offices).
• MENA states are generally members of ARIPO-equivalent regional IP cooperation frameworks; verify applicable regional patent protection.

Export control (US technology)

• US EAR: technology controlled under the Export Administration Regulations requires an export license for certain destinations and end uses; MENA transfers of US-origin technology require EAR compliance analysis.
• ITAR: military and dual-use technology may require US State Department authorization.

EU

• EU technology transfers must comply with the Technology Transfer Block Exemption Regulation (TTBER) for competition law purposes.

Drafting standards

• The technology description (Schedule A for patents; Schedule B for know-how) is the most important document in the transaction; inadequate description of what is being transferred is the most common cause of post-transfer disputes.
• A Know-how Transfer Completion Certificate is strongly recommended; it creates a clear record that the know-how transfer was completed and accepted.
• Patent assignment deeds should be prepared for each jurisdiction where the patent is registered, each in the required local form (may require local language, local notarization, local counsel).
• For government-funded technology: investigate conditions attached to research grants before drafting; the government may retain a license or may impose use-it-or-lose-it conditions that survive the transfer.

Common mistakes

• Incomplete patent list. Missing patents from Schedule A means they are not transferred; the Transferor retains them; causes disputes post-closing.
• Know-how transfer not structured. "Transfer of all know-how related to the Technology" without a delivery plan or completion certificate leaves the Transferee with uncertain rights.
• No export control analysis. Failing to identify export-controlled technology before agreeing the transfer can result in an illegal transfer and regulatory violations.
• Non-compete not included. Without a non-compete, the Transferor may redevelop the same technology and compete directly with the Transferee.

Related skills

• [[prompt-pack-technology-licensing-agreement]]
• [[prompt-pack-software-license-agreement]]
• [[prompt-pack-research-collaboration-agreement]]
• [[prompt-pack-standard-nda]]
• [[heuristic-always-state-jurisdiction-first]]