Technology transfer will create a cooperative framework between foreign investors and their local partners whereby the foreign investors, as the licensors, allow their technologies to be used by local partners, as licensees, for manufacturing purposes.
In return, licensors receive royalty fees from a such a transaction. Patent license represents typical technology transfer, but it could also include a license of trade secrets, know-how, copyright, trademark, etc. to be used by the licensee. Sometimes technology transfer also includes technical assistance from the licensors, for which the licensee, in addition to the royalty fees to pay, should also pay fees for such technical services.
The key document to use is the license agreement which usually includes several key articles, such as duty of confidentiality, covenant not to compete or challenge, licensor’s audit right, etc., to negotiate between the parties before they can finalize and sign off the agreement.