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  • Suchetana Chakraborty and Ankita Kumari

TWAIL Approaches To Transfer Of Technology And IPR: A Conundrum Within TRIPS

This article is authored by Suchetana Chakraborty and Ankita Kumari, both 4th year students at the Institute of Law, Nirma University.

Keywords- TRIPS, Transfer of Technology, CBAM, Compulsory Licensing, Patents


The TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement aims to create a robust IP (Intellectual Property) regime to protect inventions and facilitate global trade. Inventors may reap humungous profits by exclusively commercialising protected inventions. Such predictable benefits of IPRs (Intellectual Property Rights) regimes established by TRIPS have increasingly encouraged a trend of patenting cutting-edge technologies whenever created. However, less-developed countries often blame this frenzied race of patenting new-age technology for creating barriers to the underprivileged in dire need of such technologies. IPRs enable entities to market products exclusively and have excluded less-developed countries from technical knowledge essential for the common growth of humankind.

Meaning and Object of Transfer of Technology as a subset of Technical Cooperation Requirements

Objectives of TRIPS state that enforcement and protection of IP shall encourage innovation and transfer/dissemination of technology. For an enhanced implementation of TRIPS and globally sustainable growth, TRIPS also provides for technical cooperation through the transfer of technology. Article 67 of TRIPS provides for developed countries to mutually discuss and agree upon technical and financial cooperation with less-developed countries, while at the same time preventing abuse of IPRs.

Herein, conflict arises between an obligation of technical cooperation between states and co-existing protection to individual patent owners. To harmonize, governments and international organisations may invest heavily in developing humanitarian and sustainability-oriented goods, e.g.- medicines, unconventional energy production equipment like solar panels and windmills, etc. This reduces the pinch of economic loss for patent owners when technology is transferred and exclusivity is diluted, who had invested humongous amounts in the research and development of these products. The same would invigorate patent owners to participate in the transfer of technology to less-developed countries and effectuate voluntary responsibility under TRIPS.

Obligations of Transfer of Technology

TRIPS Art 66.2 of TRIPS requires developed countries to incentivize entities to promote and enable the transfer of technology to least-developed countries, aiming to protect public health and the environment. Where consensual tech transfer is implausible, Art 30 and 31 respectively provide for limited exceptions to the exclusive patent rights and unauthorized usage of any patent when authorization is not obtained after sufficient efforts and a national emergency exists requiring urgent non-commercial use of the said technology. Additionally, as affirmed by the Doha Declaration of 2003, the TRIPS Annex recommends technology transfer through Article 31bis mechanism of compulsory licensing in certain necessary cases. Compulsory licensing is dissimilar to consensual licensing contracts under Article 28(3) of the TRIPS, and thus, detrimental to the exclusive commercial rights of any IP holder. These provisions therefore serve as an exception to the general protection granted to IPs against unauthorized use.

Tech transfer through Compulsory Licensing

Under the concept of ‘compulsory licensing’, a government permits the usage of a patented product in the domestic market, without the consent of the patent owner. Compulsory licensing is permissible only after diligent efforts to obtain a voluntary license from the patent owner have been undertaken. While the patent owner will have a right to be compensated for the public usage of their product, there are possibilities of arbitrary non-consensual licensing, as TRIPS lays down no specific threshold for when compulsory licensing is to be permitted. As countries are free to determine grounds for granting compulsory licensing or as to when a national emergency exists to require compulsory licensing, misuse is bound to occur.

On a positive note, compulsory licensing can serve as a preventive measure against the misuse of patented rights. This may occur in situations where a private entity fails to produce a crucial product to meet urgent public needs at reasonable prices or imposes excessively restrictive terms on the licensee, which hinders local trade and innovation. Therein, the Indian Patent Office for example may grant compulsory licenses after 3 years of getting a patent, popular instances being the compulsory licensing of the 2012 Bayer’s Nexavar drug for liver and kidney cancer. Other prominent examples include the 2007 licensing of the AIDS drug Kaletra to Thailand's Government Pharmaceutical Organization (GPO) and that of another AIDS drug Efavirenz in the same year by Brazil.

Commercial Threshold for Technology Transfer

Despite provisions of compulsory licensing, tech transfer under TRIPS discourages unreasonably prejudicing the legitimate interests of a patent owner. The patent owner may grant permission for the use of a product under reasonable commercial terms or for non-commercial public use. Thus, TRIPS assures the prevention of undue commercial advantage to any entity that is not the patent owner, attempting to strike a balance between enabling commercial growth and protecting fundamental human rights, e.g., the right to health under Article 12 of International Covenant on Economic, Social and Cultural Rights.

Human rights considerations may involve compulsorily licensing medical equipment, drugs and pharmaceutical products to poorer members who are unable to produce the same to maintain basic health standards in their respective countries. For example, in October 2020, India and South Africa’s proposal before WTO members to waive specific protections under TRIPS for technologies required to tackle the COVID-19 Pandemic was granted, although opposed by developed countries initially. For the first time, as against the argument that IPR encourages innovation, certain protections were specifically suspended to enable superspeed medical innovation in the dire circumstances of a pandemic.

Common environmental responsibilities and the CBAM Regime stalemate

The necessity of technology transfer is enhanced due to how the pollution and global warming effects of accelerated development in developed countries have trickled down to developing and underdeveloped states. Transfer of sustainable technology to less-developed countries to tackle such effects becomes a moral responsibility. Similarly, while developed nations have upgraded to the use of sustainable technologies for production, they have proposed to impose heavy tariffs on importing countries that fail to use sustainable technologies under the contemplated CBAM regime (Carbon Border Adjustment Measure) by the EU. Under CBAM, the EU imposes tariffs on imports produced using conventional sources of energy.

The most advanced green technologies of production being exclusively patented in developed countries, the less-developed countries fail to cope with green production obligations and may end up paying unfair amounts in import tariffs. In fact, these tariff rates have also been argued by developing countries such as India to be a disguised trade-restrictive measure, rather than a measure to protect the environment or human health under Article XX of GATT.

Suggestions for a harmonious Transfer Regime

To prevent environmental degradation or to assist in achieving global health standards, countries must facilitate the real-time transfer of technology by carving out methods that are not arbitrarily disadvantageous to patent holders. Such methods may include the reallocation of patent boxes, i.e., the special taxes imposed on sustainable technology patent licensing, to change tax burdens on developing countries. Tax exemptions and tax rebates through patent box reallocation are desirable. The same will enable developing countries to afford the licensing of advanced sustainable technologies from developed countries. This could be permitted under Article IX:4 of the WTO Agreement, which allows for granting waivers from general free trade obligations and is also compatible with Article 66.2 of TRIPS and the sustainability goals under the WTO regime.

Other suggestions include the possibility of public-private partnerships to boost technology transfer and voluntary licensing between states, mutually agreed under Article 67 of TRIPS. However, in extreme situations, compulsory licensing becomes the sole available tool to effectively transfer necessary technology in the common interests of humankind.


It is pertinent to mention that IPR regimes protect technologies in a manner that precludes less developed countries from advancement. Leaving out technology transfer agreements and compulsory licensing as options, the terms of which are often dictated by the developed countries, the scope of globally sustainable and equitable technological development is severely limited. Even recent developments in green financing and the transfer of technology through the CBAM regime are not sufficiently promising, given that they focus on tariff imposition on conventionally produced goods, rather than attempting to ensure equitable green energy usage.

Moreover, although revising production methods to emit minimal greenhouse gas is environmentally desirable, it is practically impossible for a developing country like India to bear the economic brunt of supply chain fragmentation and increased costs without tech transfer, as the effects of added costs will trickle down to its poverty-stricken population, e.g.- through unemployment in conventional energy sectors. Thus, a greater willingness on the part of the developed countries to effectuate real-time transfer is quintessential.

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