Technology transfer

How BC law treats it

Technology transfer is mainly a matter of contract, built on federal intellectual property statutes. Patents are governed by the Patent Act and copyright in software by the Copyright Act. A patent assignment should be in writing and recorded with the Canadian Intellectual Property Office, because an unrecorded assignment can lose priority to a later recorded one. Know-how and trade secrets are not property under any statute, so they transfer only through confidentiality obligations and contractual disclosure and use terms, backed by the law of breach of confidence. Universities in BC each have their own policies on inventions created by faculty and students. Some leave ownership with the inventor, others claim it for the institution, and spin-out companies usually take an exclusive licence or assignment from the university's industry liaison or technology transfer office in exchange for royalties, equity or both. Founders must confirm the chain of title before raising money. Cross-border transfers raise other federal rules. Technology on the Export Control List under the Export and Import Permits Act may need an export permit even when sent electronically. Royalties paid to a non-resident are generally subject to Part XIII withholding tax under the Income Tax Act, which a tax treaty may reduce. Licence terms that restrict competition can raise issues under the Competition Act.

What it means for your business

For a Vancouver deep tech startup, the technology transfer agreement is often the company's most valuable asset and the first thing investors review. Unclear ownership, a narrow field of use, or a licence the university can terminate easily can stall a financing or acquisition. Buyers and licensees should confirm who owns each patent and piece of code, what improvements they will own, and what royalties and milestones apply. Example: A biotech spin-out from a BC university takes an exclusive worldwide licence to a patented compound in exchange for a royalty on sales and a small equity stake. Before its seed round, investors require the licence to be amended so the company owns its own improvements.

Risks and common mistakes

Assuming a founder who invented technology at a university personally owns it without checking the university's IP policy. Failing to record a patent assignment with CIPO, risking priority against a later recorded transfer. Transferring know-how without written confidentiality and use restrictions, leaving no clear remedy for misuse. Leaving ownership of improvements and jointly developed technology undefined. Overlooking export permits and non-resident withholding tax on cross-border licences.