In the pharmaceutical world, Technology transfer (TT) is part of the product’s lifecycle. TT refers to the process of transferring knowledge, technologies, and methodologies from one institute or facility to another. This broad definition encompasses various activities, from moving academic discoveries to the commercial sector to sharing innovations between different companies or research facilities.

In this issue of The Biotech Startup Standard, we cover several key aspects of technology transfer:

1. Operational Aspects: Explore the critical steps involved in the technology transfer process, ensuring smooth integration and reproducibility in a new setting. “Technology transfer is the exchange of technical information between the R&D workers who create a technological innovation and the users of the new idea”.
2. Risk Management: Delve into strategies to minimize risks associated with technology transfer, focusing on best practices and risk-free approaches. According to a detailed discussion, “Tech transfer making it as a risk-free approach in pharmaceutical and biotech industries involves extensive planning and validation”.
3. Best Practices: Learn about the systematic approaches and frameworks that facilitate effective technology transfer and scale-up, ensuring successful transitions. The systematic approach is essential as “a well-executed bioprocess technology transfer (tech transfer) is critical to ensure smooth knowledge transfer and optimal process reproducibility”.
4. Real-Life Examples: Discover real-life examples of successful technology transfers, highlighting common challenges and solutions to inspire and guide your own efforts. As stated, “Effective transfer of biotechnologies enables these developing countries to utilize their natural and human resources efficiently”.

Our articles provide snapshots of these essential topics, offering insights and practical advice for biotech startups. Dive into this issue to uncover detailed discussions, expert opinions, and success stories that will equip you with the knowledge and tools needed to navigate the complexities of technology transfer.

From my experience as a biotech startup founder, the technology transfer (TT) process involves due diligence and relationship building with the principal investigator (PI) and lab members, the Tech Transfer Office (TTO), Or an incubator’s management team. Most times, things don’t go as smoothly as expected, and this article will focus on what can be done in advance to avoid or minimize the gaps. Remember: Both sides of the tech transfer share the same goal of drug/therapy/product development at best! The main pillars for a successful TT are:

• Get prepared and learn all the details
• Maintain a respectful attitude
• Employ critical thinking
• Come with humbleness

Technology Transfer (TT) is done after a deal or agreement is set. The process can be divided into three main parts:

1. Before the tech transfer
2. The tech transfer process
3. Ongoing relationships during the development journey

1. Before the tech transfer process

The goal is to evaluate gaps, raise questions, and look for data inconsistencies or contradictions in the literature. Prepare thoroughly based on literature, the web, AI tools, and the licensing agreement.

• Read the licensing agreement carefully. Understand your duties and responsibilities
• Evaluate the IP
• Delve into the literature

Approach the Principal Investigator while CCing the TT representative, legal representative, and one board member of the company. Write an engaging intro email and set up an intro meeting. Tailor the TT visit agenda, map the topics and relevant people to meet, and build the schedule with the Principal Investigator or Lab research associate. Allocate time for your presentation and self-introduction, the first cornerstone of building trust. Don’t come alone. Bring a team member, consultant, or an unbiased person proficient in TT. Here is the agenda I prepared for the TT from UCLA lab.

Visit:

https://docs.google.com/document/d/141nKzbpeRXOcJ3WAPKCLSO6Wgj8MNJ-E/edit?usp=sharing&ouid=100548261671423884368&rtpof=true&sd=true

2. The tech transfer process

Goal: Build trust and rewrite the strategy and development plan based on the tech transfer.

Now that the visit agenda is ready, get super prepared and navigate the schedule professionally while applying the following pillars: Documentation and organization, transparency, and trust.

Building trust with power skills: Respect the work done, the findings, and the efforts behind them. Come humbly, ask questions, listen, and remember that this interaction is for the long-term, and relationship building is essential. Avoid “educating” the lab members. Process what can be done and what can’t, and to what extent.

It is essential to list the responsibilities of each party and prepare an agenda for the visit in advance. Talk with those who practically did the work. Ask for every detail.

Communicate mainly about what didn’t work since this precious knowledge is hidden and can save you time and effort in your development endeavors.

Document every piece of data that needs to be sorted out further. Create a “live” document of the topics covered, gaps, and things to fill.

Zoom out and re-evaluate your development plan, strategy, and milestones. If major gaps are found–rewrite the strategy and development plan, find creative solutions, and adapt the budget plan for needed tasks. Prepare a summary document or presentation and communicate it with the Board of Directors.

You are ready to go!

3. Ongoing relationships during the development journey

Goal: joined collaboration for fruitful processes–take proactive actions to keep the interaction alive:

• Set periodic update meetings but be aware of IP generated and their contribution within the limitations of the academic institute and the licensing agreement.
• Share information of interest related to the field with the PI and associate researcher, such as publications, deals, companies, and market trends.
• Consider writing a joint paper or grant.
• Ask the PI for relevant contact KOL persons in the field: physicians, clinicians, organizations, etc.
• Optional: Get the lab members involved but remember each party’s responsibilities and the differences between academia and industry

In summary, successful technology transfer requires thorough preparation, a respectful attitude, critical thinking, and humility. By evaluating gaps, raising questions, and building trust through transparency and effective communication, founders can bridge the gap between academia and industry. The key is maintaining an ongoing relationship, sharing insights, considering collaborative opportunities, and remembering that both parties aim to advance drug, therapy, or product development.

Technology transfer companies play a crucial role in translating groundbreaking research into practical solutions that benefit society. They serve as bridges between academia and industry, facilitating the transformation of theoretical discoveries into marketable products and services.

Ramot, established in 1973a subsidiary of Tel Aviv University Ltd. is the Tech-Transfer company of Tel Aviv University, responsible for commercializing the inventions and patents of the university’s researchers. It manages all the university’s commercialization activities, from protecting the intellectual property of researchers’ inventions to licensing them to relevant industrial entities. The company fosters and creates new business opportunities at the university, such as establishing startups, licensing technology to existing companies – both Israeli and multinational – and creating collaborations with these entities.

Since its inception, Ramot has filed over 5,000 patent applications and maintains a portfolio of approximately 1,600 patent applications and patents. Ramot signs dozens of commercial agreements each year and is involved in the establishment of approximately 100 startups.

Startup establishment is a central strategy employed by Ramot to promote technologies. When a technology requires further development, Ramot facilitates fundraising, identifies suitable entrepreneurs, and collaborates with venture capital funds, incubators, and other organizations that support entrepreneurs. This collaboration equips entrepreneurs with the tools and support they need for startup success. For instance, Ramot has successfully nurtured two notable startups:

Alpha Tau: Established in 2015, based on the technology of Prof. Yona Keisari and Prof. Itzhak Kelson. Alpha Tau is a clinical-stage oncology company developing a novel radiotherapy technology for treating solid tumors. The company’s technology aims to address the limitations of conventional radiation therapy by minimizing side effects and improving treatment efficacy. In 2022, Alpha Tau merged with SPAC at a valuation of approximately $1 billion and began trading on the Nasdaq. The company recently conducted its first clinical trial in prostate cancer patients.

Imagindairy: Founded in 2020, Imagindairy is a biotechnology company based on Prof. Tamir Tuller’s technology. It is developing a sustainable and scalable process for producing cultivated dairy products using precision fermentation. Leveraging artificial intelligence and systems biology, Imagindairy’s technology utilizes microorganisms to create milk proteins identical to those found in cow’s milk. As of 2022, the company has raised approximately $28 million in funding.

At the heart of Ramot’s success in nurturing tech transfer startups lies its close collaboration with researchers. Ramot actively engages with researchers throughout the innovation cycle, from ideation to commercialization. This deep understanding of the research landscape and the challenges faced by researchers enables Ramot to identify promising technologies with commercial potential and provide tailored support to transform them into viable startups.

The company’s collaborative approach extends to identifying and attracting talented entrepreneurs. Ramot works closely with researchers to identify individuals with the technical expertise, business acumen, and leadership skills necessary to successfully lead tech transfer startups. By fostering strong relationships with both researchers and entrepreneurs, Ramot creates an environment conducive to innovation and startup growth.

To navigate the ever-changing technological landscape, Ramot adopts innovative strategies. It allocates resources to identify emerging technological trends and participates in international conferences and events. These activities enable Ramot to recognize new opportunities for technology transfer and establish international partnerships.

In conclusion, Ramot plays a pivotal role in commercializing groundbreaking research from Tel Aviv University. By supporting researchers, establishing startups, collaborating with venture funds, incubators, accelerators, and entrepreneurs, and fostering a culture of close collaboration with researchers, Ramot contributes to Israel’s economy and enhances our lives through novel technologies.

You can find more information on the Ramot: www.ramot.org

In the ever-evolving field of healthcare, bringing a new idea to fruition involves a meticulous understanding of the market need. Whether it’s a new drug, a revolutionary medical device, a healthcare app, or a unique service model, the success of such innovation hinges on its relevance and demand within the healthcare market. Here’s a structured approach for assessing the market need for a new idea in healthcare:

Step1: Define Your Idea

Begin by clearly defining the value of your healthcare innovation:

• What problem does it solve?
• Define the clinical condition or medical indications it solves best.
• How does it improve over existing solutions?

If your idea can be used to treat several conditions, choose the one that is of utmost need. Establish clear objectives for the design of your idea, based on the defined unmet needs.

Step 2: Conduct Comprehensive Market Research

Healthcare market research is a systematic process that involves ongoing collection, analysis, and interpretation of data related to the healthcare industry. It helps in understanding market dynamics, consumer behavior, and competitive landscape. Remember, since it takes a long time to reach the market, market research should be updated regularly.

Step 3: Analyze Market Size,Growth and Structure

Understanding the size and growth rate of the healthcare market, including specific segments relevant to your idea, is crucial. It is also important to learn how the market is structured: who are the critical players, who controls what segment (including HMOs, government, etc.).This analysis helps identify the potential and scalability of your innovation.

Step 4: Gather Consumer Insights

Gaining insights into consumer behavior, preferences, and needs is essential. This involves collecting data on patient demographics, healthcare personnel approach to the idea, healthcare utilization patterns, to assist in the development of patient-centric solutions.

Step 5: Competition

Search for competitor or existing solutions, even if they are not similar. Assessing your competitors’ products, pricing, distribution channels, and marketing strategies provides a benchmark and helps you plan your offering effectively in the market.

Step 6: Consider Regulatory Environment

Healthcare is heavily regulated. Staying informed about regulatory changes and ensuring compliance is vital when developing and introducing new healthcare products or services. Follow the regulatory agencies of the markets you wish to reach regularly. Learn about their approval of products for the same intended uses.

Step 7: Test Market Acceptance-clinical trials

Before a full-scale launch, testing your idea through pilot studies or focus groups can provide valuable feedback on market acceptance and potential areas for improvement. Clinical trials are compulsory for some products, like drugs and high-risk medical devices. Some products can get approval without clinical trials, but marketing and commercializing will almost always require them in healthcare. Learn the process and seek expert advice.

Step 8: Plan for Market Entry and Expansion

Assess the feasibility of entering new markets or expanding operations. This includes understanding local healthcare systems, reimbursement mechanisms, and customer preferences.

Conclusion

Assessing the market need for a new healthcare idea is a complex but critical process. It requires a deep dive into market research, consumer understanding, and competitive analysis. By following these steps, healthcare innovators can significantly increase the chances of their idea’s success in the market.

Tips: Looking for competitors

• check for sponsors of clinical trials for the defined indication in www.clinicaltrials.gov
• check patents database, using search topics such as indications, diseases, devices, names of sponsors, names of scientists in the field etc. www.espacenet
• seek expert advice–the path to the market is long, expensive and success rate is low.

There are many considerations to account for, both prior to and during the development of any new healthcare solution or innovation. Proactive steps such as performing market research, assessing competitors, and developing a strategy to comply with country-specific regulatory requirements are very important and well-established. If the strategic plans for your offering include making your innovation available in the United States market, it is critical to assess and define a cohesive and complementary market access strategy to maximize your chances of successful market entry and adoption.

Market Access in the US

The US healthcare system continues to undergo rapid transformation. The number of impactful innovations coming to market continues to grow at an accelerated pace. Competition is fierce, raising capital is challenging, and those who don’t account for market access considerations early in the development process are more likely to struggle. US market access can be defined as the intersection three score, interdependent categories:

1. Reimbursement-pricing, coding, coverage & payment
2. Value proposition–evidence showing the clinical, economic, quality of life(QoL) impact on patients, clinicians, payers, and society versus competitors and standard care
3. Payer access–medical policy and payment from government & private insurance companies, health systems, self-insured employers

Important Questions to Consider

Is there (what is) a viable reimbursement pathway to payment for your solutions from Medicare and private health insurance plans? Is there a code I will need for payment from insurers? Will I need a new code, or can I use an existing code? What are the requirements to obtain a new code? What is the value (clinical, economic, quality of life improvements) your solution can bring to patients, physicians, and insurance companies in the US versus competitors and/or standard care? How does your innovation improve patient outcomes, change physician treatment protocol? Is your solution cost-effective? What is the budget impact on payers? (How) does it improve patient experience? Which payers should you target? What do payer Medical Directors think are the most important areas for which to define and illustrate value for your specific innovation? What is your evidence and publication strategy to illustrate this value to various stake holders in the US healthcare ecosystem? Can you (how can you) incorporate various endpoints into your clinical trial design? What other studies will you need? What other tools will be necessary to show value? How will you price and justify the pricing for your solution in the US?

Whether your innovation is a diagnostic test, medical device, digital platform, SaaS or a therapeutic, assessing and establishing market access pathways early in the development process, combined with thorough market research and a well-defined regulatory approach (when applicable) will maximize the opportunity to drive successful market entry and adoption for your innovation. The author is a visionary market access leader with extensive experience in health technology reimbursement, value creation, and payer access.

www.dreambighealth.org

The pharmaceutical industry is at the forefront of the European Union’s efforts to drive innovation and technological leadership. A staggering 25% of pharmaceutical startups emerge from technological transfer, the process of transforming cutting-edge research into commercially viable products and services. By bridging academia and industry, tech transfer catalyzes economic growth, job creation, and groundbreaking deep-tech solutions, accounting for over 60% of economic growth in developed countries.

The EU’s substantial funding initiatives, like Horizon Europe’s €95.5 billion budget, feature specific calls supporting various tech transfer stages. Research and Innovation Actions (RIAs) target lower Technology Readiness Levels (TRLs) 3-5, focusing on early-stage research and proof-of-concept. In contrast, Innovation Actions (IAs) target higher TRLs 6-8, concentrating on product/service development and commercialization.

One notable opportunity is the EIC Transition program under Horizon Europe’s European Innovation Council (EIC). Offering grants up to €2.5 million, it empowers startups to validate technologies, build prototypes, and prepare for market entry – bridging the dreaded “valley of death.” Companies like Anaviri, a Spanish biotech firm, received €2.3 million to develop a novel HIV vaccine through this program.

Pharma-Focused Funding Bonanza

For pharma startups and tech transfer offices (TTOs), the EU’s funding landscape is ripe with potential. From 2021-2027, €8.2 billion is allocated for health research and innovation – underscoring pharma’s pivotal role in advancing healthcare and economic growth.

The “Tackling Diseases” call, with a €1.3 billion budget, supports innovative disease prevention, diagnosis, and treatment solutions. Projects like INNODIA, which received €27 million to develop better diabetes treatments, exemplify the transformative impact of such funding.

Collaboration: Synergy for Success

The EU actively encourages academia-industry partnerships, recognising their synergistic power. TTOs play a crucial role, in bridging cutting-edge research and commercial applications. By leveraging expertise and networks, TTOs help startups identify and acquire promising technologies while navigating IP and commercialisation complexities.

Having witnessed the tangible impacts of these programs, I can attest to their ability to foster a conducive ecosystem for tech transfer and innovation. This firsthand experience guides entities through the EU funding maze, enhancing prospects for success.

Upcoming opportunities include the EIC Pathfinder Open and Challenge calls, fostering cutting-edge, high-risk/high-impact research and deep-tech breakthroughs. With a budget of €624 million in 2023, these calls present exciting avenues for pharma innovators.

As the world grapples with healthcare challenges, the EU’s commitment to fostering tech transfer and supporting pharma innovation is vital. By seizing these opportunities and forging strategic partnerships, startups and TTOs can unlock groundbreaking research’s full potential, shaping a brighter, healthier future.

The WHO guidelines define technology transfer as a logical procedure that controls the transfer of products, processes, and knowledge, together with their documentation and professional expertise, within a facility or between facilities. It may involve development, manufacturing, and testing sites. The transfer may occur during a product’s development phases or after obtaining marketing authorization.

The WHO guidelines, as well as ICH Q10 and ICH Q12, consider the transfer of technology part of a pharmaceutical product’s lifecycle.

When the transfer is between different companies, in addition to regulatory and quality implications, it may also have legal and economic implications that need to be considered and addressed when planning the technology transfer.

The goal of a Technology Transfer

Depending on the development phase, the goal of the technology transfer is to transfer product and process knowledge between development and manufacturing, between small-scale manufacturing lines to large-scale manufacturing lines, or between manufacturing sites to achieve product realization.

The knowledge transferred forms the basis for establishing the manufacturing process, control strategy, process and methods validation approach, and ongoing continuous improvement.

What does the Technology Transfer project include?

• Documented project plan covering the different aspects of the project, relevant responsibilities, and timelines.
• Detailed description of the process steps and analytical methods.
• Detailed quality risk management plan.
• Comprehensive gap analysis to assess the capabilities of the receiving unit (RU) and the sending unit (SU) in terms of facilities, equipment, QC laboratories, quality, and regulatory aspects. This may be achieved by way of thorough due diligence.

The success of a technology transfer process depends heavily on the communication, transparency, and goodwill of both the SU and the RU.

Comparability between the original process to the transferred process

Whether it is during the development phases or post-approval, a comparability exercise to support the technology transfer should be executed. Based on the project step, the complexity and number of changes will define the extent of comparability to be conducted.  ICH, FDA, and EMA guidelines on comparability should be consulted.

Guidelines about post-approval changes should be considered to understand how to manage the change and the reporting requirements.

Meeting with regulatory authorities prior to initiation of the technology transfer

It is important to consult with the relevant regulatory authorities prior to the initiation of the technology transfer. If it is a product in the development phase with an active IND, ensure you provide the FDA with the technology transfer plans, including the comparability protocol, before engaging in the process. This will allow the FDA to provide you with timely comments. For an approved product, it is even more important and relevant to provide the regulatory authority with your plans for future changes to avoid risking your commercial supply.

Conclusion

Technology transfer of a manufacturing process is a key and complex activity in the pharmaceutical industry. It requires careful planning and execution, as well as consideration of which development stage it is recommended to encompass in such a process. Stakeholders from different expertise should be consulted, and regulatory expectations should be taken into consideration, all to ensure a successful transfer and continuation of product development or commercialization.

List of guidelines:

1. WHO guidelines on transfer of technology in pharmaceutical manufacturing, 2011
2. New Version on WHO Guidelines on Process Transfer, 2021
3. ICH Q10 Pharmaceutical Quality System
4. ICH Q12 on technical and regulatory considerations for pharmaceutical product lifecycle management

www.adres.bio

In the pharmaceutical industry, technology transfer is critical to ensuring that knowledge about product development and manufacturing processes is shared effectively across different phases and sites. Technology transfer aims to facilitate product realization by transferring essential process knowledge and control strategies between development and manufacturing teams and across manufacturing sites.

Collaborative Foundations for Success

The process begins with robust collaboration across multiple functions, including research and development, manufacturing, quality assurance, regulatory bodies, and commercial teams. From early development, it’s vital to assess unit operations at a commercial scale, identify Critical Quality Attributes (CQAs) and critical Process Parameters (CPPs), and establish a control strategy. This foundational work ensures that both the originating (sending) and recipient (receiving) units are equipped with a clear understanding of the product, process knowledge, and plans for mitigating risks.

Role Clarity and Relationship Management

Key to a smooth technology transfer is defining roles and responsibilities early, particularly between the sending and receiving units. Maintaining solid relationships within the transfer team is crucial for navigating the complexities of technology transfer, especially when it spans different cultural contexts.

Effective Team and Governance Structures

A formal technology transfer team should include leaders from both sending and receiving sites and Subject Matter Experts (SMEs) from areas such as Analytical Sciences, Engineering, Manufacturing, Quality, supply chain, and Regulatory Affairs. This team ensures comprehensive oversight and expert input essential for a successful transfer.

For governance, project leads and stakeholders must outline a clear framework encompassing the transfer’s scope, timelines, resources, budget, and success criteria. This framework should also include robust change and risk management strategies and a structured decision-making process.

Minimizing Changes Through Strategic Gap Analysis

Upon receiving the technology transfer package, the receiving unit conducts a gap analysis to compare existing and planned operational processes. This step helps identify knowledge gaps, process adaptations, and facility modifications. To ensure success, it’s critical to minimize changes. Keeping materials and manufacturing processes as consistent as possible with the original site helps maintain drug quality and integrity.

Effective technology transfer in pharmaceutical manufacturing is a strategic, structured process that extends beyond merely moving technology from point A to B. It involves detailed planning, skilled teamwork, and stringent management to ensure that every drug production phase meets the highest quality and efficacy standards. By adhering to these guidelines, pharmaceutical companies can achieve seamless technology transitions, ensuring consistent drug quality and availability in the market.

www.scinai.com

In the pharmaceutical industry, analytical technology transfer (ATT) is a crucial process that involves moving validated analytical methods from one laboratory to another. This is typically done between different locations within the same company or between different companies. The transfer ensures that the recipient laboratory can perform the analytical method reliably and consistently, producing results that are comparable to those obtained by the transferring laboratory.

Importance of ATT

The primary aim of analytical technology transfer is to verify that the receiving lab not only understands and can implement the method but also generates accurate and reliable results. This process is vital for maintaining the integrity of drug development and manufacturing and ensuring that quality control is consistent across different sites.

Regulatory Guidelines

Different regulatory agencies have outlined expectations for ATT. For example, USP 1224, ‘transfer of analytical procedures’, includes detailed instructions that address how to carry out the transfer, how to train personnel at the receiving site, and how to verify that the transferred analytical method performs as expected. Several types of transfers are considered: comparative testing, co-validation between two or more laboratories, revalidation, and even transfer waiver.

Despite the existence of these guidelines, there is often room for interpretation, which can lead to variations in how ATT is executed.

Steps in ATT

A typical analytical technology transfer includes:

• Preparing a detailed transfer protocol.
• Sharing scientific documentation related to the method, including detailed analytical procedures.
• Providing reference samples.
• Executing the required study(ies) at the receiving site to validate the transfer.
• Assessing the results to confirm that the method performs adequately in the new setting.

Challenges and Considerations

Despite its routine nature, ATT can be complex and challenging. Differences in equipment, reagents, personnel, and even environmental conditions between sites can affect the outcome of the transfer. Therefore, a risk analysis is often performed as part of the transfer protocol to identify and mitigate potential issues.

Analytical technology transfer is a key activity in the pharmaceutical industry that supports the safe and effective production of medications. While it is governed by regulatory expectations, the specific practices can vary, requiring careful planning and execution to ensure success.

The Virtual-Tangible Fine Line

Drafting a technology license agreement is a complex professional matter, typically handled by lawyers specializing exclusively in the field. Surprisingly, the principles and rules of an apartment rental agreement, a topic familiar to many, can assist in navigating and understanding the concepts of IP licensing.

Below, we will review the overlapping points between these two agreements – different yet surprisingly similar – which will greatly facilitate our ability to recognize and navigate technology licensing agreements.

In the example before us, we will talk about licensing a patent for drug manufacturing versus renting an apartment.

Let’s start with the agreement terms that define and limit the subject of the transaction and the scope of the license or the rental:

1. The subject of the rental – an apartment– is registered in the Land Registry in the name of the owner/lessor, indicating ownership of the entire apartment without the ability to split ownership of specific rooms. Similarly, The subject of the license – a patent is registered in the Patent Office in the name of its owner/licensor, denoting ownership of the entire patent without the ability to split it.

2. The rental period – Example: 5 years with an option for extension. The license period – Example: For the duration of the patent’s validity, or, for a fixed period with an option for extension.

3. The permitted use of the apartment – Example: For residential purposes only. The permitted use of the patent – Example: For producing a topical drug only but not for producing an ingestion drug.

4. Subleasing—Example: The tenant is allowed to sublease. Sub-licensing—Example: The licensee is allowed to grant a sub-license.

5. The scope of use of the apartment – Example: Renting the living and bedrooms, except for the storage room. The scope of use of the patent – Example: A license limited to part of the technology covered by the patent or some of the patent claims.

6. Regulatory compliance – Example: The tenant undertakes to comply with all laws applicable to a resident, and the licensee undertakes to comply with the relevant regulations for the exploitation of the patent, the production of the drug, its marketing, etc.

While acknowledging the great similarity between the aforementioned types of transactions, it is also possible at this stage to discern the advantages and greater flexibility in technology (intellectual property) licensing transactions over the rental of a physical asset.

For example, while a physical asset’s rental is limited to a defined tenant(s), an intellectual asset can be licensed to multiple users/licensees or a single user/licensee if the license is defined as exclusive. Moreover, in technology licensing, it is possible to stipulate that the license is granted and limited to exploitation in a particular country/territory, while in another country/territory, the license will be granted to another licensee. Furthermore, it is also possible to determine many commercial segmentations – such as: one licensee will obtain a license for production only, while another licensee will be granted a license – for the same patent – for marketing and distribution only.

For the sake of ‘the sacred balance,’ let us note that renting an apartment (and physical assets in general) has its own advantages: In case of a breach of the rental contract terms, the lessor can take physical steps to restore the asset to its possession, for example, by eviction, replacing the locks, taking actual possession, fencing, etc. In contrast, due to the virtual nature of intellectual property licensing, there is no possibility to literally ‘lay hands’ on the intellectual asset in a situation where the licensee violates the license terms. Complex legal enforcement actions must be taken to prevent the exploitation of the license by the violator.

Now, let’s go back and compare yet another aspect of the above transactions – so different in nature yet so similar in the framework of their terms – this time, we’ll address certain aspects of the Transactions Consideration:

1.1 Apartment Rental Consideration—Example: The rent is calculated based on the property’s space. Patent licensing Consideration—Example: Royalties are calculated as a percentage of revenues derived by the licensee from the exploitation of the license.

1.2 A greater similarity can often be seen in the rental of commercial property (for example, a store in a mall), where it is customary for the consideration paid by the tenant to be partly composed of royalties on the store’s revenues in addition to lump-sum payments made in advance, or during the rental period. Similarly, in licensing, it is customary that, in addition to royalties, the licensee will make lump-sum payments that are not dependent on the revenues derived from exploiting the license. These fixed payments are usually paid both as a one-time payment upon the license coming into effect as well as periodic payments that are not income-dependent.

2. We have referred above to subleasing versus sublicensing. Indeed, in the context of the consideration, there is much similarity: In subleasing, the primary tenant will pay the lessor all or part of the sublease rent she received from the subtenant. Similarly, in sublicensing, the primary licensee will pay the licensor the agreed portion of the sublicense royalties derived from the sublicensee.

In summary, the great similarity, which does not always receive due attention, between transactions in tangible assets and transactions in virtual assets demonstrates the ‘tangibility’ of intellectual assets and the ‘virtuality’ aspects in transactions of tangible assets. Realizing and understanding said similarity could meaningfully facilitate the structuring and execution of Tech transfer transactions.