Rs 500 Stamp Paper
Licensing Agreement for Transfer of Technology (LAToT)
Between
LAB NAME, City
Defence Research & Development Organisation (DRDO), India
Ministry of Defence, Government of India
And
Company Name, City,
Transfer of Technology (ToT) of
Name of Technology
This Licensing Agreement for Transfer of Technology is entered into on the ……. Day
of ......... Month in the Year ..........(Two Thousand ................. )
BETWEEN
The President of India, acting through and represented by the Director, Lab Name,
City a constituent laboratory under the Defence Research and Development
Organisation, Ministry of Defence, Government of India and the Director, Industry
Interface and Technology Management (DI2TM) at DRDO HQrs, DRDO Bhawan,
New Delhi – 110 011(Hereinafter referred to as “DRDO”, which expression shall
whenever the context so requires or admits, mean and include its successors in office
and/ assigns) on the first part
AND
“Name of the Company”, a company formed in accordance with the laws of India
and having their registered office at Company Address (Hereinafter referred to as
“Company Name”, which expression shall whenever the context so requires or
admits, mean and include their heirs/successors, respective executors, administrators,
legal representatives, and/or permitted assigns) represented by ................................ ,
on the second part.
“DRDO” and “Company Name” are individually referred to as “Party” and
jointly as “Parties”.
1. Preamble
1.1 WHEREAS DRDO, during the course of its research activities has developed a
unique technology for Application of Technology (Hereinafter referred to as
the “Technology” and more fully described in Technical Know-How) which is
a “Product Name”, (Hereinafter referred to as the “Products” and more fully
described in Products Description).
1.2 WHEREAS Company Name, is desirous of utilising the developed
“Technology” to manufacture in India/ “Country Name”* and sell in ‘India”
(Hereinafter referred to as Licensing Regions and morefully described in
“Licensing Regions”), the “Products”, there from.
2. Technical Know-How
DRDO shall transfer the complete details of the technical know-how and testing
method for quality assurance to Company Name with requisite data on the
functioning of the product.
3. Product Description
The “Product” is ……………….........................................................................
.....................................………………………..……………………………………
…………………………………………..……
4. Licensing Regions
4.1 By this Licensing Agreement for Transfer of Technology, DRDO grants a non-
exclusive Licence to utilise the “Technology” by “Name of the Company” for
the manufacture in ”India” and sale within ” India” (referred as “Licensing
Region”) under the provisions contained in succeeding clauses of this
Agreement.
4.2 For sale of the product outside the licensing region “Name of the Company”
shall seek prior written approval of DIITM, DRDO HQrs.
In pursuance of above, NOW IT IS AGREED BY AND BETWEEN THE PARTIES
AS FOLLOWS:
5. Grant of License
5.1 By this Licensing Agreement for Transfer of Technology, DRDO grants a non-
exclusive license to utilise the “Technology” by “Name of the Company” for
the manufacture in “ ” and for sale in the “licensing regions” for
“Period of License” (described at Clause 14) from the date of this Agreement
becoming effective.
5.2 DRDO shall have the March-in Rights to use the IP for its own use in the interest
of Government of India without any restrictions, irrespective of the nature of
license granted in this agreement.
6. Responsibilities of Parties
6.1 DRDO agrees to supply the “Technology” in the form of documents like
drawings specifications, known sources of materials, testing details and
specifications (which hereinafter will be collectively referred to as “Technology
Transfer Documents TTD).
6.2 During the Technology Transfer period (i.e., the time period required for
transferring the technology as per TTD from “DRDO” to “Name of the
Company”), DRDO shall p r o v i d e free of cost c o n s u l t a t i o n to
“Name of the Company” till period manufacturing products for the first order.
6.3 For any technical assistance given beyond this Technology Transfer period
for deputation abroad “Name of the Company” shall pay the consultation
charges of $ 500 (Five Hundred US Dollars) per man-day to DRDO. “Name of
the Company” shall also bear the transport and lodging costs of the scientists
and staffs, as per Government rules.
6.4 “Name of the Company” undertakes to manufacture the “Product” in
accordance with the specifications contained in the TTD supplied by DRDO.
Any changes/ deviations shall be mutually agreed upon in writing.
6.5 During the “Period of Validity of License” (refer Clause 14), DRDO reserves
the right to stage inspect all materials and processes in the manufacture, at
such intervals and under such conditions as may be felt necessary by DRDO.
During such inspection should the materials and/or stage-products fail to
meet the specification(s) as per the TTD, the rejects will be to the account of
“Name of the Company”. After rectification, if the product still does not meet
the specifications, DRDO may revoke the licence conferred on “Name of the
Company”.
6.6 It shall be the sole responsibility of “Name of the Company” to ensure
maintaining the quality of the “Technology” and “Products” and in case of any
complaint/claim in the quality of the “Technology” and “Product” produced
by “Name of the Company” is received, DRDO shall in no way be held
responsible in any manner, whatsoever, for such rejection/claims, etc. DRDO’s
responsibility shall be limited to providing technical assistance to “Name of
the Company” on the above terms and conditions.
6.7 The “Name of the Company” agrees to the fullest extent permitted by law,
to indemnify and hold harmless DRDO from any liabilities, damages and costs
(including reasonable attorneys fees and cost of defense) to the extentcaused
by the negligent acts, errors or omissions of the “Name of the Company” or
anyone for whom “Name of the Company” is legally responsible.
6.8 “Name of the Company” undertakes and assures that it will always follow best
Corporate Practices
6.9 “Name of the Company” will provide the maintenance, repair and all necessary
life cycle support to the User.
6.10 ‘Name of Company’ has done its due-diligence on the technology and has fully
satisfied them with the performance of the technology and shall not seek refund
of ToT Fees from DRDO under any circumstances.
6.11 The supply chain developed by DRDO prior to ToT shall be given preference by
the “Name of the Company” for components/ subsystems. However, licensee
industry may develop additional vendors for supply chain in case supply chain
vendor(s) developed by DRDO is not able to match quality/ quantity/ schedules
etc, and only after the necessary clearance from concerned DRDO Lab.
7. Sale
7.1 “Name of the Company” undertakes to spend sufficient fund for promoting/
branding/ marketing the said “Products”.
7.2 “Name of the Company” shall inform DRDO of the sale of the product on
a yearly basis (financial year). A copy of this information will also be sent to
DIITM, DRDO HQ.
7.3 For enquiries received from abroad for the product, “Name of the Company”
shall seek prior written approval from DIITM, DRDO.
8. Financial Arrangements
8.1 “Name of the Company” shall pay to DRDO a Total Technology Transfer
Fees of Rupees “NIL” .
8.1.1 The “Name of the Company” shall also pay Goods & Service tax (as applicable)
on Reverse Charge basis. ToT Fee and Royalty payments to be done through
SBI e-MRO Portal.
8.2 The Annual Royalty payable to DRDO by “Name of the Company” shall be as
follows:
• “NIL” royalty will be charged on Net Sales to Central Govt. Estt, Armed
Forces (including Government Tenders) (Applicable for both Cat ‘A’ &
Cat ‘B’)
• “NIL” Royalty on Net Sales to Indian Market (Except Central
Government Establishment, Armed Forces and Government Tenders,
etc.). (Applicable for Cat ‘B’ only)
• Royalty on Net Sales to Export Market@ 2%of invoice value declared
to Customs authorities. Export is subjected to the due approval from
MoD/ DRDO. (Applicable for both Cat ‘A’ & Cat ‘B’)
8.2.1 Sales figure will be determined based on the selling price declared for
the purpose of payment of GST. Further sales figures for the purpose of
royalty payment shall be based on a certificate derived from audited financial
statements, duly certified by Chartered Accountant.
8.3 The royalty payment will be effected on pro-rata basis within 30 days of
publishing of the Annual Audited Financial Statements by Chartered
accountants. “Name of the Company” may quote the price to customers by
including the royalty/ departmental charges payable to DRDO. However, Royalty
payable to DRDO in case of export by “Name of the Company, shall be
calculated on F.O.B. price of the product as per the invoice and prevalent
exchange rates on the date of remittance of invoice amount in the favour ToT
recipient industry (from its foreign buyer) in RBI.
The Royalty will be charged in US Dollar in case where manufacturing takes
place abroad. The royalty will be charged as per the audited statement of
records of sale by the foreign company and RBI in turn will remit the amount
in INR to DRDO as per the prevailing exchange rate on the date when FE was
remitted by the foreign company to RBI.
8.4 In the course of its normal research and development, if DRDO come across
facts, which lead to incremental improvement, the same will be shared with
“Name of the Company”. However, should the nature of the product be
changed to bring about a new product, the same shall be offered to “Name of
the Company” by DRDO and the commercial aspects will be renegotiated to
mutual acceptance.
8.5 Payment of Royalty in respect of export orders will be made by “Name of the
Company” through e-MRO portal (https://cmp.onlinesbi.com/MOD /
home.htm) in favour of concerned CDA/ PCDA (R&D), ‘Place’ (under
code head 01/855/00). “Name of the company” will submit a copy of e-
MRO Receipts/ Challan generated against above payment to The Director,
‘Lab Name’, Place. ‘Lab name’ will forward a copy of e-MRO Receipts/ Challan
to concerned CDA/ PCDA (R&D) to get it deposited in Miscellaneous Receipts
of DD(R&D). Also copy of e-MRO to be forwarded to Director, DFMM, DRDO
HQrs for accounting purpose, with copy to Director, Directorate of Industry
Interface and Technology Management (DI2TM), DRDO HQrs, R No 447,
‘B’ Block, “DRDO Bhawan”, Rajaji Marg, New Delhi – 110 011. Payment in
respect of GST, if applicable, shall be made as per the provisions of Goods
and Services Acts (as amended from time to time) as applicable for the
services provided by Government of India Departments.
8.6 For all commercial/ financial aspects, DI 2TM, DRDO HQrs, New Delhi will be
consulted by “Name of the Company”.
8.7 In the event or default in payment of royalty in respect of export orders by due
date, “Name of the Company” shall pay interest on amount due, in default,
at the bank lending rate (State Bank of India*) charge prevailing at the time in
India.
8.8 “Name of the Company” will provide Certification of assessable value
declared to Central Excise authorities and quantity of Production figures every
year (Financial year) duly authenticated by their Chartered Accountant (CA) to
Director, Name of the Lab, City with a copy to Director, DI2TM, New Delhi.
9. Marking
9.1 A DRDO product developed by DRDO and manufactured and marketed by
“Name of the Company” shall have following markings “Product Developed
by DRDO” or words to this effect DRDO logo shall be visibly displayed.
9.2 “Name of the Company” shall indicate in all the technical documents/brochures
including copies thereof furnished by DRDO and in a manner approved by
DRDO that the design and technology contained in the documents are the
properties of DRDO.
10. Security
10.1 “Name of the Company” shall not transfer or sublicense by resale or otherwise,
the know how/technology obtained from DRDO under this Agreement to any
other party, in any manner, whatsoever, without the prior written approval of
DRDO/ DIITM irrespective of whether this Licensing Agreement for Transfer of
Technology is in force or not. “Name of the Company” undertakes that it will
take prior permissions from DRDO in case of sub-licensing the “Technology”
and “Products” in the “Licensing Regions”.
10.2 “Name of the Company” shall take all necessary measures to ensure that the
technology is not passed on, disclosed, or given access to, except to such of
their Directors, Officers and employees and their subcontractors to whom it is
necessary to pass on, disclose or give access to, for the purpose of execution
or manufacture of the product under this Licensing Agreement for Transfer of
Technology. “Name of the Company” hereby accepts full responsibility for
any of their Directors, Officers and Employees and their subcontractors and
undertakes to fully compensate DRDO in that regards.
10.3 Any product improvements carried out by “Name of the Company” shall
be got approved from DRDO before the product is offered for sale and the
same shall be the property of DRDO and will not be passed on by “Name
of the Company” to any other parties irrespective of whether this Licensing
Agreement for Transfer of Technology is in force or not.
10.4 “Name of the Company”, during the course of productionisation and/or
commercialisation of the “Product” based on “DRDO Technology”, may want
to effect improvements thereby causing a different “Product” to be formulated.
All such differentials and ‘variants’ will be deemed as based on the “DRDO
Technology” and all clauses in this Agreement will be fully applicable to such
‘variants’. Patent right on such new (improved) products/ variants shall
be that of DRDO and DRDO may consider grant of an exclusive right to
“Name of the Company” for that new variant, if “Name of the Company”
so requests DRDO.
10.5 “Name of the Company” shall keep royalty amounts and Technology Transfer
fee and Royalty commercially confidential.
11. Title and Ownership of Design
The title to and ownership of the “Technology” including the improved technology
and the “Products” including new variants and copyrights and intellectual
property rights will rest exclusively with DRDO.
12. Dispute Resolution
In event of any dispute or difference between the Parties hereto, such disputes
and differences shall be resolved amicably by mutual consultation. If such
resolution is not possible, then, the unresolved dispute and difference shall be
referred to arbitration of the Sole Arbitrator to be appointed by the Secretary,
Department of Defence Research & Development on the recommendation
of the Secretary, Department of Legal Affairs (“Law Secretary”), Government
of India. The provisions of Arbitration and Conciliation Act, 1996 (No. 26 of
1996) shall be applicable to the arbitration under this clause. The venue of such
arbitration shall be at Delhi or any other place decided by the arbitrator and the
language of arbitration proceedings shall be English. The arbitrator shall make
a reasoned award (the “Award”), which shall be final and binding on the Parties.
13. Effective Date
This Agreement shall be effective on and from the date it is signed by both the
parties.
14. Period of Validity of License
14.1 DRDO grants a non-exclusive license to utilise the “Technology” by “Name of
the Company” for the manufacture in and for sale in the “licensing
regions” for years (referred as “Period of Validity of License”) from the
date of this Licensing Agreement for Transfer of Technology becoming effective.
14.2 Though the validity of the granted license is for years, DRDO shall be
at liberty to revoke the license in the following circumstances, without any
liability of whatsoever nature, to either “Name of the Company” or to the new
company/ owner/management and/ or to any other claimant.
14.2.1 If the company (“Name of the Company”) and/ or its sub-license* is
Black-Listed by any India Government Agency and/or Government
Organisation.
14.2.2 If the company (“Name of the Company”) and/ or its sub-license* fails
to abide by the terms & conditions of this Agreement.
14.2.3 If it is found that “Name of the Company” and/or its sub-license* is
involved in any unlawful acts.
14.2.4 In the event of change of Management, ownership and/ or merger* of
“Name of the Company” into some other company or sale/transfer*
of the company to some other person by any mode; like purchase of
shares, taking over of the company by any other means, without prior
knowledge and consent of DRDO.
14.2.5 If the company (“Name of the Company”) becomes insolvent.
14.2.6 If any undertaking provided by “Name of the Company” is found
incorrect at any stage.
14.3 In the case of revocation of license, “Name of the Company” will have no claim
whatsoever on ToT Fees, Royalty Fees given to DRDO before the Revocation.
14.4 This Licensing Agreement for Transfer of Technology shall be reviewed for
further extension/termination before the expiration of validity of License offered
through this agreement.
15. Force Majeure
15.1 Neither party shall be liable for any failure of performance under this Agreement,
due to causes beyond such party’s reasonable control, including but limited to
acts of God, fire, flood or other natural catastrophes; any law, order, regulation,
direction, action of any civil or military authority, national emergencies,
insurrections, riots, wars, strikes, lock-outs, work stoppages or other labour
difficulties, provided however the party to which the force majeure has happened
shall use commercially reasonable efforts to eliminate such an event.
15.2 Force Majeure shall also be deemed in the event of any regulatory decision
or government order requiring the either party to suspend its service(s) or
operation for any reason whatsoever.
15.3 If either party is unable to act(s) for a period of 90 (ninety) consecutive days
as a result of continuing Force Majeure event, the other party may cancel/
terminate the Agreement.
15.4 However, “Name of the Company” will have no claim whatsoever on ToT
Fees, Royalty Fees given to DRDO before the enforcement of Force Majeure
event.
16. Entire Agreement
16.1 This Agreement constitutes the final agreement between the Parties and it
supersedes all prior agreements, understandings and other correspondence/
communications between the Parties with respect to the subject matter hereof.
17. Amendments
17.1 No amendment/ modification/ alternation of any of the terms of this Agreement
shall be valid till it is reduced to writing and duly signed by both the Parties. Any
amendment of financial/commercial nature shall be subject to final approval by
the Director, DI2TM, DRDO HQrs.
IN WITNESS HEREOF, the parties have set their hands to it on the …….
Day,...............Month and Year ...........................(Two Thousand ................. )
Signed For and on behalf of the Signed by on and behalf of M/s
President of India “Name of the Company”, City
By : By :
Name : Name :
Title : Director, Name of Lab, Title :
City
Date : Date :
By :
Title : Director, DITM, DRDO
HQrs,
New Delhi
Title : Director, Name of Lab, City
Date :
In the presence of :
Witness Witness
By : By :
Name: Name:
Title: Title:
Organisation: Organisation:
