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REPORTS - SPECIAL REPORTS |
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Methodological and Technological Issues in Technology Transfer |
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Other reports in this collection
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4.8.1 Intellectual Property Rights
Weak legal institutions in host countries can be a serious barrier to technology
transfer agreements. The relevance of the law of intellectual property rights
(IPRs) is of obvious importance to the volume of technology transfer. If actors
with IPRs or their licensees cannot protect income flows associated with ESTs
in whose development they have invested substantial resources, they will either
avoid transferring leading technologies into jurisdictions with weak IP laws or
enforcement systems, or will export only second line, more exposed technologies
which put at risk less of their capital stock. Although IPRs, discussed further
in Chapter 3, merit great attention, many other types of
laws and legal institutions, often less emphasised, should receive equivalent
concern.
Especially when technology is transferred between private firms through ongoing
relationships such as joint ventures, wholly owned subsidiaries with local supply
and distribution networks in the host country, or royalty based technology licenses,
the risks associated with the investments will be affected by the state of law
and legal institutions in the receiving state. This will also be the case for
foreign portfolio investors, banks and export-import agencies who finance investments
that bring ESTs into an economy. At times, the capacities of these national legal
institutions may be supplemented by international treaties like TRIPS or the WTO
or partially substituted by transnational arbitration (Dezalay and Garth, 1996).
But, even if the role of national institutions is no more than the enforcement
of foreign legal judgements, the ability of local law to mitigate risks without
extensive cost or delay will have an impact on investment patterns and profiles
of technologies selected (Clarke, 1996).
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