Technology Transfer Agreement
This Technology Transfer Agreement is made on [AGREEMENT DATE][ (the "Effective Date")] between [SELLER NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [SELLER ADDRESS] (the "Seller") and [PURCHASER NAME], [whose principal place of residence is at/a [CORPORATE JURISDICTION] corporation with its principal place of business at] [PURCHASER ADDRESS] (the "Purchaser").
The parties agree as follows (the capitalized terms used in this agreement, in addition to those above, being defined in section 18 (Definitions)):
1. Technology Transfer. Seller agrees to transfer to the Purchaser, and the Purchaser agrees to purchase from the Seller, the Purchased Technology in accordance with the terms of this agreement.
2. Key Terms
2.1. Description of Purchased Technology: [SUMMARY OF PURCHASED TECHNOLOGY]
2.2. Purchase Price: $[PURCHASE PRICE]
2.3. Royalties: [SUMMARY OF ROYALTY PAYMENTS]
2.4. Closing Date: [CLOSING DATE]
3. Payment Obligations
3.1. Purchase Price. On the Closing Date, the Purchaser shall pay $[PURCHASE PRICE] to the Seller for the Purchased Technology.
3.2. [Royalties. The Purchaser shall pay to the Seller the royalties in the amount specified, and calculated in the manner set out, in Schedule B (Royalty Payments).]
3.3. Payment Net of Taxes. All payments owed by the Purchaser are exclusive of taxes. The Seller shall pay, and the Purchaser shall collect and remit, any taxes payable.
4. Closing Date. The Closing will take place at the Closing Time at the [CLOSING LOCATION], or at such other time and place as the parties may agree upon in writing.
5. Purchaser's Representations and Warranties. The Purchaser represents and warrants to the Seller as follows, acknowledging that the Seller is relying on these representations and warranties:
5.1. No Conflicts. The Purchaser is under no restriction or obligation that may affect the performance of its obligations under this agreement.
6. Seller's Representations
6.1. Ownership of Purchased Technology. The Seller is the sole and exclusive owner of the Purchased Technology, free and clear of all liens, charges, or other encumbrances.
6.2. No Conflicts. The Seller is under no restriction or obligation that may affect the performance of its obligations under this agreement.
6.3. No Options. The Seller states that no Person has any option, commitment, right to purchase any of the Purchased Technology.
6.4. Registrations All Current. The Seller states that none of the registrations made in connection with any the intellectual property included in the Purchased Technology
(a) has lapsed, expired or been abandoned, surrendered, or cancelled,
(b) is subject to any injunction, judgment, order, consent, ruling, charge, or settlement agreement, or
(c) is subject to any pending or threatened oppositions, cancellations, interferences or other proceedings before any Governmental Authority.
6.5. Filing Fees All Current. The Seller states that all filing fees, maintenance fees, examination fees, taxes, proofs of use, and other administrative or regulatory requirements necessary or desirable to have been paid or filed in order to obtain or maintain any registrations made in connection with any the intellectual property included in the Purchased Technology have been paid or filed. There are no fees or taxes required to be paid, or actions required to be taken, within  days after the Closing Date.
6.6. Unregistered Rights. The Seller states that there is no fact or circumstance known to the Seller that would prevent its unregistered intellectual property rights in the Purchased Technology from being registered in any jurisdiction.
6.7. Full Disclosure. The Seller has disclosed to the Purchaser all information known to it and relating to any problem or issue that does or may reasonably be expected to adversely affect the operability, functionality, or fitness for the intended purpose of any of the Licensed Technology.
6.8. No Pending Proceedings. The Seller states that there are no legal or regulatory proceedings pending or, to the Seller's knowledge, threatened by any Person relating to the Purchased Technology.[To the Seller's knowledge, there are no grounds on which any such proceeding might be brought with any reasonable likelihood of success.]
6.9. No Failure to Disclose Information. The Seller has not failed to disclose to the Purchaser any information that would be material to a purchaser of the Purchased Technology.
7. Acknowledgements. The parties acknowledge to each other as follows:
7.1. Effect of Purchaser's Investigations. No investigations made by or on behalf of the Purchaser will have the effect of waiving, diminishing the scope of, or otherwise affecting any representation or warranty of the Seller under this agreement.
7.2. Transfer to Purchaser. Upon Closing, the transfer of the Purchased Technology from the Seller to the Purchaser will be deemed to have been completed with effect as of the Closing Time.
8. Conditions for Benefit of Purchaser. The Purchaser's obligation to complete the purchase of the Purchased Technology is subject to the satisfaction or, in the Purchaser's discretion, waiver on or before the Closing of each of the following conditions:
8.1. Truth of Representations and Warranties. The Seller's representations and warranties will be true and correct as at the Closing Time.
8.2. Due Diligence. The Purchaser will have completed its investigation of the Purchased Technology, which will not have disclosed any matter that the Purchaser considers to be [materially] adverse to its acquisition of the Purchased Technology or the Purchaser's decision to acquire it.
8.3. Performance of Obligations. The Seller will have performed[, in all material respects,] all obligations that it must perform under this agreement at or before the Closing Time.
8.4. Required Consents. All Required Consents will have been obtained on terms acceptable to the Purchaser.
8.5. No Proceedings. No legal or regulatory proceeding will be pending or, to the Seller's knowledge, threatened that
(a) could have a [material] adverse effect on the Seller's title to the Purchased Technology, or
(b) enjoins, restricts, prohibits, or seeks a remedy that would have the effect of enjoining, restricting, or prohibiting the completion of the sale of the Purchased Technology.
8.6. Closing Documents. The Seller will have delivered to the Purchaser all of the Closing Documents that it is required to deliver[, each of which will be in form and substance satisfactory to the Purchaser], together with any other documents that the Purchaser may [reasonably] request to complete the sale of the Purchased Technology.
9. Conditions for Benefit of Seller. The Seller's obligation to complete the sale of the Purchased Technology is subject to the satisfaction or, in the Seller's discretion, waiver on or before the Closing of each of the following conditions:
9.1. Representations and Warranties. The Purchaser's representations and warranties will be true and correct as at the Closing Time.
9.2. Performance of Obligations. The Purchaser will have performed[, in all material respects,] all obligations that it must perform under this agreement at or before the Closing Time.
9.3. Closing Documents. The Purchaser will have delivered to the Seller all of the Closing Documents that it is required to deliver[, each of which will be in form and substance satisfactory to the Seller], together with any other documents that the Seller may [reasonably] request to complete the sale of the Purchased Technology.
10. Waiver of Closing Conditions. Either party may, by Notice to the other party, waive any closing condition that is for its benefit.
11. Cooperation Required. During the Interim Period, each party shall
11.1. take all reasonable action within its control, and use reasonable efforts to cause other actions that are not within its control to be taken, to ensure compliance with any Closing Conditions that are for the benefit of the other party, and
11.2. cooperate fully with each other for any steps required to be taken as part of their respective obligations under this agreement.
12. Seller's Interim Period Obligations. During the Interim Period, the Seller shall do the following:
12.1. Required Consents. The Seller shall use reasonable efforts to obtain all Required Consents.
12.2. Encumbrances. The Seller shall not permit any encumbrances to attach to or affect any of the Purchased Technology.
12.3. Compliance with Laws. The Seller shall comply with all Laws affecting the Purchased Technology.
12.4. Exclusive Dealings. The Seller shall not, directly or indirectly, encourage, initiate, or engage in discussions or negotiations with, or provide any information to any third party concerning the sale of the Purchased Technology.
13. Purchaser's Closing Deliveries. At Closing, the Purchaser shall deliver, or cause to be delivered, to the Seller, the following:
13.1. the full purchase price, by wire transfer of immediately available funds to the account designated by the Purchaser,
13.2. all the Closing Documents and all other documents and evidence[,each of which in form and substance satisfactory to the Seller] that the Seller may [reasonably] request to complete the purchase of the Purchased Technology,
13.3. a certificate of compliance with the Closing Conditions applicable to the Purchaser duly executed by an officer of the Purchaser dated the Closing Date, in form and substance satisfactory to the Seller, and
13.4. any other documents contemplated by this agreement to complete the purchase of the Purchased Technology.
14. Seller's Closing Deliveries. At Closing, the Seller shall deliver, or cause to be delivered, to the Purchaser, the following:
14.1. the Purchased Technology in a mutually agreeable format,
14.2. copies of all files and records relating to the Purchased Technology,
14.3. the contact information of any Persons that may currently be using the Purchased Technology,
14.4. the Closing Documents and all other documents and evidence[,each of which in form and substance satisfactory to the Purchaser] that the Purchaser may [reasonably] request to complete the sale of the Purchased Technology, and
14.5. a certificate of compliance with the Closing Conditions applicable to the Seller duly executed by an officer of the Seller dated the Closing Date, in form and substance satisfactory to the Purchaser, and
14.6. any other documents contemplated by this agreement to complete the sale of the Purchased Technology.
15.1. Mutual Consent. Either the Purchaser or the Seller may terminate this agreement by mutual written consent at any time before the Closing.
15.2. Failure to Satisfy Closing Condition. If a Closing Condition is not satisfied at the Closing Time, or if it becomes apparent that it cannot be satisfied at the Closing Time and it is not waived by the party entitled to its benefit, the party entitled to its benefit may terminate this agreement by Notice to the other party. In that case, each party will be released from all obligations under this agreement unless the party that received the Notice can show that the given Closing Condition
(a) is reasonably capable of being performed or caused to be performed by the party that gave the Notice, or
(b) has not been satisfied by reason of a default by the party that gave the Notice.
15.3. Failure to Close. Either party may terminate this agreement by providing Notice to the other party if, for any reason other than that party's failure to satisfy a Closing Condition under section 15.2 (Failure to Satisfy Closing Condition), the Closing has not occurred on or before the Closing Date.
15.4. Effect of Termination
(a) Return of Property. Upon termination of this agreement, the Purchaser shall return to the Seller all the Seller's property, both originals and copies, under its direct or indirect control.
16.1. Purchaser's Indemnity for Third Party Claims. The Purchaser shall indemnify the Seller[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] for all claims, liability, and expenses (including legal fees) arising from any Third Party Claim brought against the Seller[ or any of its directors, officers, employees, shareholders, partners, agents, and affiliates,] in connection with events that took place after the Closing Date.
16.2. Seller's Indemnity for Third Party Claims. The Seller shall indemnify the Purchaser[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] for all claims, liability, and expenses (including legal fees) arising from any Third Party Claim brought against the Purchaser[ or any of its directors, officers, employees, shareholders, partners, agents, and affiliates,] in connection with events that took place on or before the Closing Date.
16.3. Seller's Indemnity for Breach. The Seller shall indemnify the Purchaser[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] against all claims, liability, and expenses (including legal fees) arising from the Seller's misrepresentation or breach of, or any inaccuracy of, any of the Seller's representations or warranties contained in, this agreement.
16.4. Effect of Inspection. The Purchaser's right to indemnification under section 16.3 (Seller's indemnity for Breach) applies despite
(a) any inspection or inquiries made by the Purchaser or any of its representatives before Closing, or
(b) any knowledge acquired or capable of being acquired by, or facts actually known to, the Purchaser or any of its representatives (whether or after Closing).
16.5. Mutual Indemnity. Each party shall indemnify the other party[ and its directors, officers, employees, shareholders, partners, agents, and affiliates,] against all claims, liability, and expenses (including legal fees) arising from any third party claim or proceeding brought against one party that alleges any [grossly] negligent act or omission or willful conduct of the other party[ or its directors, officers, employees, shareholders, partners, agents, or affiliates].
16.6. Notice of Claim. A party shall give prompt Notice to the other party of any claim or potential claim for indemnification under this section.
16.7. Exclusive Remedies. The rights granted under this section 16 (Indemnification) are the exclusive remedies available under this agreement in connection with the claims and losses that this section addresses.
17. Limitation of Liability
17.1. Foreseeability. Neither party will be liable for breach-of-contract damages that the breaching party could not reasonably have foreseen on entering into this agreement.
17.2. Maximum Liability. In no event will the Seller's liability under this agreement exceed the purchase price paid to the Purchaser.
18.1. "Closing" means closing of the purchase and sale of the Purchased Technology.
18.2. "Closing Conditions" means conditions detailed in sections 8 (Conditions for Benefit of Purchaser) and 9 (Conditions for Benefit of Seller).
18.3. "Closing Date" means [CLOSING DATE].
18.4. "Closing Documents" means[those documents set out in Schedule C (Closing Documents Schedule) OR], collectively, the following documents:
(a) all bills of sale, transfers, and other documents as may be necessary or reasonably required to transfer the Purchased Technology to the Purchaser with a good title, free and clear of all encumbrances,
(b) duly executed copies of all Required Consents,
(c) evidence that the Purchased Technology is free and clear of all encumbrances,
(d) evidence of all registrations, declarations, filings, or recordings with any Governmental Authority required to be made in connection with the completion of the Transactions, and
(e) a favourable legal opinion of counsel to the Seller dated the Closing Date[, substantially in the form set out in the Opinion of Seller's Counsel attached as Exhibit 1],
(f) a favourable legal opinion of counsel to the Purchaser dated the Closing Date[, substantially in the form set out in the Opinion of Purchaser's Counsel attached as Exhibit 2],
(g) all other documents and evidence that may reasonably be requested in order to establish the due authorization and completion of the purchase and sale of the Purchased Technology.
18.5. "Closing Time" means [CLOSING TIME] a.m. on the Closing Date.
18.6. "Governmental Authority" means
(a) the government of the United States or any other nation, or any of its or their geographical or political units or subdivisions, and
(b) any body, agency, tribunal, arbitrator, court, authority, or other entity that exercises executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or relating to, government.
18.7. "Interim Period" means the period between the date of this agreement and the Closing Date.
18.8. "Law" means
(a) any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and
(b) any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority having the force of law.
18.9. "Notice" means any notice, request, direction, or other document that a party can or must make or give under this agreement.
18.10. "Purchased Technology" means all the technology described in the Schedule A (Description of Purchased Technology).
18.11. "Required Consent" means any consent, approval, or authorization of any Person, and any registration, filing, or other recording with any governmental authority, required in connection with the sale of the Purchased Technology and the performance of the terms of this agreement.
18.12. "Third Party Claim" means any claim or proceeding brought by a third party against the Purchaser that alleges
(a) a breach of any legal rights that the third party has or claims to have, or
(b) that the third party has suffered or may suffer damages,
in connection with the Purchased Technology.
19.1. Entire Agreement. This agreement contains all the terms agreed to by the parties relating to its subject matter. It replaces all previous discussions, understandings, and agreements.
19.2. Further Assurances. Each party, upon receipt of Notice from the other party, shall sign (or cause to be signed) all further documents, do (or cause to be done) all further acts, and provide all assurances as may reasonably be necessary or desirable to give effect to the terms of this agreement.
19.3. Amendment. This agreement may only be amended by a written document signed by both parties.
19.4. Binding Effect. This agreement benefits and binds the parties and their respective heirs, successors, and permitted assigns.
19.5. Assignment. Neither party may assign this agreement or any of their rights or obligations under this agreement without the prior written consent of the other party.
19.6. No Partnership. Nothing contained in this agreement creates a partnership, joint venture, principal-and-agent, or any similar relationship between the parties.
19.7. Third Party Beneficiaries. The Indemnification terms of this agreement confer rights and remedies upon the [PARTY ONE]'s directors, officers, employees, shareholders, partners, agents or affiliates. No Person other than the parties themselves and those beneficiaries has any rights or remedies under this agreement.
19.8. Payment of Expenses. Each party is responsible for all costs (including legal fees) and other expenses that it incurs in connection with the negotiation and preparation of this agreement.
(a) Form of Notice. All notices and other communications between the parties must be in writing.
(b) Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, (iii) first-class registered or certified mail, postage prepaid[, (iv) fax][ or (v) electronic mail] to the party's address specified in this agreement, or to the address that a party has notified to be that party's address for the purposes of this section.
(c) Receipt of Notice. A Notice given in accordance with this agreement will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth Business Day following mailing.
19.10. Remedies Cumulative. The rights and remedies available to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.
19.11. Survival. Sections 16 (Indemnification) and 16.4 (Effect of Termination) survive the termination of this agreement.
19.12. Severability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.
19.13. Waiver. A party's failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party's rights.
19.14. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict of laws rules.
19.15. Dispute Resolution
(a) Arbitration. Any dispute or controversy arising under or in connection with this agreement will be settled exclusively by arbitration in [STATE], in accordance with the rules of the American Arbitration Association then in effect by [NUMBER OF ARBITRATORS] arbitrator(s).
(b) Damages. The arbitrator(s) will not have the power to award punitive damages.
(c) Judgment. The successful party may enter the arbitral judgment in any court having jurisdiction. The arbitrator will not have the power to award punitive damages.
19.16. Waiver of Jury Trial. Each party irrevocably waives its rights to trial by jury in any action or proceeding arising out of or relating to this agreement or the transactions relating to its subject matter.
19.17. Attorney Fees. If either party brings legal action to enforce its rights under this agreement, the prevailing party will be entitled to recover its expenses (including reasonable attorneys' fees) incurred in connection with the action and any appeal.
(a) Currency. Unless otherwise specified, all dollar amounts expressed in this agreement refer to American currency.
(b) Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa, words importing gender include all genders.
(c) Headings. The headings used in this agreement and its division into sections[, schedules, exhibits, appendices,] and other subdivisions do not affect its interpretation.
(d) Internal References. References in this agreement to sections and other subdivisions are to those parts of this agreement.
19.19. Schedules and Exhibits. The following are attached to and form part of this agreement:
(a) Schedule A: List of Purchased Technology
(b) [Schedule B: Royalty Payments]
(c) [Schedule C: Closing Documents]
(d) [Exhibit 1: Form of Legal Opinion of Counsel to Seller]
(e) [Exhibit 2 : Form of Legal Opinion of Counsel to Purchaser]
19.20. Counterparts. This agreement may be signed in any number of counterparts, each of which is an original and all of which taken together form one single document.
19.21. Effectiveness of Agreement. This agreement is effective as of the date shown at the top of the first page, even if any signatures are made after that date.
This agreement has been signed by the parties.
Schedule A - Description of Purchased Technology
[Schedule B - Royalty Payments]
[Schedule C - Closing Documents Schedule]
[Exhibit 1 - Form of Legal Opinion of Counsel to Seller]
[Exhibit 2 - Form of Legal Opinion of Counsel to Purchaser]
A Technology Transfer Agreement is a contract between a transferor and a transferee, with the transferor selling, assigning, licensing, or otherwise transferring a particular process or product, often patented, to the transferee. Patent Licensing is a particularly complex area of law, where patent and contract law overlap. Patents are governed by 35 U.S.C., and contract law is primarily made of state common law. Before licensing patent, the parties should be familiar, or should have legal counsel that is familiar, with patent law and the relevant state contract law.
In today’s economy, technology forms the heart of many businesses; with limited resources, the decision whether to develop new technology in-house, or acquire it from an outside developer or rival, is a crucial one. On the one hand, developing technology in-house can prevent a company from becoming dependant on outside development, but it also requires significant investment into research and development, and comes with the looming risk that the development in unsuccessful or becomes completely cost-prohibitive. Acquiring technology instead potentially saves costs and removes the risk involved with developing oneself. Today, Technology Transfer Agreements are a crucial tool for business, especially small- and medium-sized businesses without robust research and development departments.
Alternatively, similar to a Patent License Agreement, Technology Transfer Agreements can help the transferor commercialize or develop their product or process. For example, Technology Transfer Agreements are commonly one part of a larger franchise agreements, or joint-venture between partners.
The World Intellectual Property Organization [WIPO] has a comprehensive introduction into Technology Transfer Agreements and the role of these agreements in the modern economy: http://www.wipo.int/export/sites/www/sme/en/documents/pdf/technology_transfer.pdf
Key considerations when drafting a Patent License Agreement: