PRICING OF TECHNOLOGY

PRICING OF TECHNOLOGY:

CATEGORIES OF PAYMENTS: Payments for the technology may be divided into three broad categories, although in practice an agreement may involve a combination of all three: lump sum payment, royalties and fees.

LUMP SUM PAYMENT:
Lump sum payments are calculated in advance through the agreed sum may be paid in installments. This method may be appropriate where it is desired to obtain the technology by outright purchase. It may also be a means of obtaining the data on a patented process. Traditional reasons for down payment or lump payments are as follows:
Down payment is a transfer cost representing the specific costs borne by the licensor to prepare a “technology package” for the licensee. Costs could arise form preparing drawings, specification lists, operating manuals, on-site training of personnel etc.

ROYALTIES:
Payments are made for the use of all forms of industrial property rights, the ownership rights, the ownership rights of which are established by national statutory law (patent, trade mark, copyright) civil law or international consensus. Royalties may be paid as a percentage of sales value, whether the technology is in the forms of know-how or the use of patented equipment/process of production.

FEES:
Fee for technology which may be remunerated specifically include training, whether in the licensor’s or in the licensee’s works, the position for technical experts required to introduce the technology and fee for expert assistance in the setting up of associated research and development, design and engineering services.
The basic principles of governing the acquisition of technology were:
Import of technology and foreign investment in this regard, were to be continued to be permitted in a selective basis where; need had been established, technology indigenously was likely to delay the achievements of development targets.
Government form time to time, would identity such as areas of high national priority, in respect of which procedures would be simplified further to ensure timely acquisition of the required technology.