Technologies and know-how as objects of international trade and as production factors. Scientific and production cooperation on a commercial basis

Date: 2015-10-07; view: 386.

Theme 10. International trade technologies and know-how

1. Technologies and know-how as objects of international trade and as production factors. Scientific and production cooperation on a commercial basis.

2. Market of the knowledge-intensive products. Market of patents and licenses.

3. Exchange of specialists. Scientific-technical cooperation on a nonprofit basis.

4. Information technologies. Globalization of scientific and technical communications.

Science (from Latin scientia, meaning "knowledge") is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe. In an older and closely related meaning (found, for example, in Aristotle), "science" refers to the body of reliable knowledge itself, of the type that can be logically and rationally explained. Since classical antiquity science as a type of knowledge was closely linked to philosophy. In the early modern era the words "science" and "philosophy" were sometimes used interchangeably in the English language. By the 17th century, natural philosophy (which is today called "natural science") was considered a separate branch of philosophy. However, "science" continued to be used in a broad sense denoting reliable knowledge about a topic, in the same way it is still used in modern terms such as library science or political science.

In modern use, "science" more often refers to a way of pursuing knowledge, not only the knowledge itself. It is "often treated as synonymous with 'natural and physical science', and thus restricted to those branches of study that relate to the phenomena of the material universe and their laws, sometimes with implied exclusion of pure mathematics. This is now the dominant sense in ordinary use." This narrower sense of "science" developed as scientists such as Johannes Kepler, Galileo Galilei and Isaac Newton began formulating laws of nature such as Newton's laws of motion. In this period it became more common to refer to natural philosophy as "natural science". Over the course of the 19th century, the word "science" became increasingly associated with the scientific method, a disciplined way to study the natural world, including physics, chemistry, geology and biology. It is in the 19th century also that the term scientist was created by the naturalist-theologian William Whewell to distinguish those who sought knowledge on nature from those who sought knowledge on other disciplines. The Oxford English Dictionary dates the origin of the word "scientist" to 1834. This sometimes left the study of human thought and society in a linguistic limbo, which was resolved by classifying these areas of academic study as social science. Similarly, several other major areas of disciplined study and knowledge exist today under the general rubric of "science", such as formal science and applied science.

The word technology refers to the making, modification, usage, and knowledge of tools, machines, techniques, crafts, systems, and methods of organization, in order to solve a problem, improve a preexisting solution to a problem, achieve a goal, handle an applied input/output relation or perform a specific function. It can also refer to the collection of such tools, including machinery, modifications, arrangements and procedures. Technologies significantly affect human as well as other animal species' ability to control and adapt to their natural environments. The term can either be applied generally or to specific areas: examples include construction technology, medical technology, and information technology.

The human species' use of technology began with the conversion of natural resources into simple tools. The prehistorical discovery of the ability to control fire increased the available sources of food and the invention of the wheel helped humans in travelling in and controlling their environment. Recent technological developments, including the printing press, the telephone, and the Internet, have lessened physical barriers to communication and allowed humans to interact freely on a global scale. However, not all technology has been used for peaceful purposes; the development of weapons of ever-increasing destructive power has progressed throughout history, from clubs to nuclear weapons.

Technology has affected society and its surroundings in a number of ways. In many societies, technology has helped develop more advancedeconomies (including today's global economy) and has allowed the rise of a leisure class. Many technological processes produce unwanted by-products, known as pollution, and deplete natural resources, to the detriment of the Earth and its environment. Various implementations of technology influence the values of a society and new technology often raises new ethical questions. Examples include the rise of the notion of efficiency in terms of human productivity, a term originally applied only to machines, and the challenge of traditional norms.

Philosophical debates have arisen over the present and future use of technology in society, with disagreements over whether technology improves thehuman condition or worsens it. Neo-Luddism, anarcho-primitivism, and similar movements criticise the pervasiveness of technology in the modern world, opining that it harms the environment and alienates people; proponents of ideologies such as transhumanism and techno-progressivism view continued technological progress as beneficial to society and the human condition. Indeed, until recently, it was believed that the development of technology was restricted only to human beings, but recent scientific studies indicate that other primates and certain dolphin communities have developed simple tools and learned to pass their knowledge to other generations.

The distinction between science, engineering and technology is not always clear. Science is the reasoned investigation or study of phenomena, aimed at discovering enduring principles among elements of the phenomenal world by employing formal techniques such as the scientific method.^[13] Technologies are not usually exclusively products of science, because they have to satisfy requirements such as utility, usability and safety.

Engineering is the goal-oriented process of designing and making tools and systems to exploit natural phenomena for practical human means, often (but not always) using results and techniques from science. The development of technology may draw upon many fields of knowledge, including scientific, engineering, mathematical, linguistic, and historical knowledge, to achieve some practical result.

Technology is often a consequence of science and engineering — although technology as a human activity precedes the two fields. For example, science might study the flow of electrons inelectrical conductors, by using already-existing tools and knowledge. This new-found knowledge may then be used by engineers to create new tools and machines, such as semiconductors,computers, and other forms of advanced technology. In this sense, scientists and engineers may both be considered technologists; the three fields are often considered as one for the purposes of research and reference.^[14]

The exact relations between science and technology in particular have been debated by scientists, historians, and policymakers in the late 20th century, in part because the debate can inform the funding of basic and applied science. In the immediate wake of World War II, for example, in the United States it was widely considered that technology was simply "applied science" and that to fund basic science was to reap technological results in due time. An articulation of this philosophy could be found explicitly in Vannevar Bush's treatise on postwar science policy, Science—The Endless Frontier: "New products, new industries, and more jobs require continuous additions to knowledge of the laws of nature ... This essential new knowledge can be obtained only through basic scientific research." In the late-1960s, however, this view came under direct attack, leading towards initiatives to fund science for specific tasks (initiatives resisted by the scientific community). The issue remains contentious—though most analysts resist the model that technology simply is a result of scientific research.

Know-how is practical knowledge of how to get something done, as opposed to “know-what” (facts), “know-why” (science), or “know-who” (networking). Know-how is often tacit knowledge, which means that it is difficult to transfer to another person by means of writing it down or verbalising it. The opposite of tacit knowledge is explicit knowledge.

In the context of industrial property (now generally viewed as intellectual property (IP)), know-how is a component in the transfer of technology in national and international environments, co-existing with or separate from other IP rights such as patents, trademarks and copyright and is an economic asset.

Know-how can be defined as confidentially held, or better, 'closely held' information in the form of unpatented inventions, formulae, designs, drawings, procedures and methods, together with accumulated skills and experience in the hands of a licensor firm's professional personnel which could assist a transferee/licensee of the object product in its manufacture and use and bring to it a competitive advantage. It can be further supported with privately maintained expert knowledge on the operation, maintenance, use/application of the object product and of its sale, usage or disposition.

The inherent proprietary value of know-how lies embedded in the legal protection afforded to trade secrets in general law, particularly, 'case law'.^[2] Know-how, in short, is "private intellectual property". The 'trade secret law' varies from country to country, unlike the case for patents, trademarks and copyright where there are formal 'conventions' through which subscribing countries grant the same protection to the 'property' as the others; examples of which are the Paris Convention for the Protection of Industrial Property and the World Intellectual Property Organization (WIPO), under United Nations, a supportive organization designed "to encourage creative activity, [and] to promote the protection of intellectual property throughout the world".

A trade- secret may be defined as:

- it is information

- it is secret, not absolutely so

- there is intent to keep it secret

- it has industrial, financial or trade application

- it has economic value

For purposes of illustration, the following may be a provision in a license agreement serving to define know-how:

Know-howshall mean technical data, formulae, standards, technical information, specifications, processes, methods, code books, raw materials, as well as all information, knowledge, assistance, trade practices and secrets, and improvements thereto, divulged, disclosed, or in any way communicated to the Licensee under this Agreement, unless such information was, at the time of disclosure, or thereafter becomes part of the general knowledge or literature which is generally available for public use from other lawful sources. The burden of proving that any information disclosed hereunder is not confidential information shall rest on the licensee.

Show-how is a diluted form of know-how as even a walk-through a manufacturing plant provides valuable insights to the client's representatives into how a product is made, assembled or processed. Show-how is also used to demonstrate technique.

Know-how trading is a web-based research and design phenomenon related to open innovation and crowdsourcing. It denotes Fee-based knowledge markets that treat knowledge and expertise as commodities that can be traded for financial gain. It therefore differs from other information markets such as Yahoo Answers in that solution providers are financially rewarded for their efforts. The challenges set therefore tend to be more focused, and solutions more detailed and lengthy.

Know-how trading sites differ from open innovation communities in that the entry level for solutions is much lower. Rather than seeking large research projects, know-how trading enables businessmen, researchers and individuals to save time by harnessing the skills and expertise of others to solve very specific, often quite difficult problems. Some individuals use know-how trading portals in an informal way to accumulate new knowledge about subjects which they are interested in.

Generally, any individual can sign up for a know-how trading portal for free and browse the selection of questions and challenges by reward and subject. Because reward is only transferred upon successful completion of the project, anyone can submit solutions without prior qualification.

Examples of know-how trading portals include innocentive, NineSigma and Starmind. Innovation communities such as Experts-Exchange and Mahalo Answers work on a similar business model but paying rewards in an artificial currency.

Appropriateness of technology sales may be due to one of three reasons:

- impossible or impractical for any reason to use it at home;

- economic or political inability to export products manufactured using this technology in the territory of a country or several countries because of their restrictive practices and various kinds of barriers;

- large internal market.

In the first case the sale of a license to the technology will partially or fully recover the costs spent on its development in the second - to enter the private market for merchandise exports in the third - to accelerate the saturation of the domestic market, reduce costs, or otherwise take advantage of the international division of labor .

Under current conditions in developed countries almost all inventions and new products are patented. Patent licenses, i.e. permission for the transfer of rights to use patents without a "know-how", play a relatively minor role in the licensed trade. This is due to the need for additional research and development and implementation costs, optimization of the process, and the risk that the invention will be economically unprofitable and technologically unacceptable.

Most common in international trade have license agreements that provide comprehensive transmission of one or more patents and related "know-how".

Know-how (English Know - how - «know-how") - a set of technical knowledge and commercial secrets.

The know-how of a technical nature include:

- experienced unregistered samples of products, machinery and equipment, the individual parts, tools, equipment for processing, etc.;

- technical documentation;

- instructions;

- work experience, a description of technologies;

- knowledge and skills in the field of accounting, statistical and financial reporting, legal, and economic performance;

- knowledge of customs and trade rules, etc.

Under the "know-how" of a commercial nature means:

- address data banks;

- filing clients;

- catalogs of suppliers;

- information on the organization and efficiency, the amount of output;

- data for marketing and distribution of products;

- methods and forms of advertising;

- data on staff training, etc.

In contrast to the secrets of "know-how" is not patented, because in large part consists of certain techniques, skills, and so and.

Transmission on a commercial basis, exchange, distribution of "know-how" is, above all, through licensing agreements, providing not only the transfer of documentation, but also training, participation of experts in organizing production, the provision of other technical assistance to the importer.

License Agreement - an agreement to transfer the rights to use licenses, "know-how", trademarks, etc.

License agreement may provide for the transfer of the patent license, a comprehensive transmission of several patents and the related "know-how", increasing the number of licensing agreements for the use of "know-how" without patents. License agreements provide for the latter two types in addition to transfer of technical knowledge to provide the licensor (the patent holder) related engineering services for the organization of licensed production, as well as related equipment supply, raw materials, individual components and the like

Upon termination of the rights to the "know-how" of the license agreement is terminated.

Payment Methods "know-how"

The importance and urgency of solving the practical problems in the implementation of pricing of research and development and commercialization of intellectual property and the judicial protection of their rights due to the ambiguous position of experts on the definition of reasonable size for loss of profits or damages for breach of intellectual property rights, as well as the study of "just" the size of license payments.

Particularly acute problem of evaluation and pricing is now seen in connection with the litigation of claims for damages from the unlawful use of intellectual property.

In accordance with the legislation of all the industrialized countries, technology transfer and economic rights for them in the international exchange requires "reasonable compensation" as compensation for the use of intellectual property.

The price of a license must provide the buyer, in spite of all its costs of acquisition, including the license fee, capital investments for its implementation, labor, time spent, etc., the ability to eventually make a profit in excess of income from the sale of products in the market, made by similar technologies, and fairly stable for a long period. This is possible provided that the implementation of the technology affect or to increase productivity, or to reduce the price of the materials, or to improve the quality of products (by creating a qualitatively new type of product), or can cause the total effect of these factors.

In drawing up the agreement for the transfer of "know-how" of the parties shall determine the content and usefulness (compared to similar as possible), and the obligation to transfer the operation, guarantees to achieve the effect. It is more profitable to the owner to describe all instances of "know-how", and the user to "narrow down" its content, in future, not to pay compensation to the owner for possible further refinement of "know-how". When determining the price of "know-how", remember that it will pay off future profits that will get the user using the "know-how", otherwise it will get less profit or not receive it at all. The problem is simplified if the owner will perform technical and economic assessment for the project using the "know-how" and not "know-how".

In international practice, the price of "know-how" of 5% of future profits, but there are cases when the price of "know-how" is 20%. When determining the price the owner determines what costs may arise for self-development of the "know-how" and the minimum acceptable price below which sales impractical.

There are several ways to pay for "know-how".The main ones:

Royalty - a periodic payment by the licensee by the licensor agreed intervals, the license fee for the license agreement, beginning with the release of the finished product - either in the form of deductions from the value of the produced licensed products, or as a percentage of the turnover of sales or the amount of profit or in the form of fees per unit produced under license production. The royalty rate is usually in the range of 1 to 12%, more often - 2-6%. Royalty rates over time can be in the form of progression or regression;

Lump-sum payment- a one-time, pre-agreed payment. Lump-sum payments are used when it is difficult to predict the effect of the "know-how" and the low cost of the license. Lump-sum payments are often used in the non-manufacturing sector (management, financial reporting, legal issues);

Coast Place- payments for additional services on the agreed rates in excess of the agreed price (lump sum).

In practice, the most common combined payments, which include the initial amount in the form of lump-sum payment (10-13% of the total price of the license), and subsequent periodic payments (royalties)