Technology Transfer and Licensing Agreements sit at the centre of Kenya’s life sciences ambitions right now. The WHO-Medicines Patent Pool mRNA technology transfer programme bringing manufacturing capability to Kenya BioVax Institute is a live example of exactly this kind of arrangement, and any company bringing pharmaceutical, diagnostic, or biotech know-how into Kenya, whether through licensing, joint venture, or outright technology transfer, needs to understand that Kenya does not treat these as purely private contractual matters. The Kenya Industrial Property Institute has a statutory mandate to screen them.

KIPI’s Screening Mandate for Technology Transfer and Licensing Agreements

Under the Industrial Property Act, 2001 (Cap. 509), sections 5 and 69 give KIPI the mandate to screen technology transfer agreements and licence contracts. Section 69 is the operative substantive check: a licence contract must not impose unjustified restrictions on the licensee where those restrictions would be harmful to Kenya’s economic interests. The Act lists specific examples of prohibited restrictive clauses, including terms that prevent the licensee from adapting the technology to local conditions or introducing innovations, unless the adaptation would unsuitably affect the licensor’s products, and terms that restrict the licensee from entering agreements relating to competing technologies where that restriction is not needed to protect the licensor’s legitimate interests. A licensing agreement drafted purely on a foreign template, without checking it against these restrictions, risks being unenforceable in Kenya even if it is perfectly standard elsewhere.

Default Terms When the Contract Is Silent

Technology Transfer and Licensing Agreements often rely on statutory default terms that apply whenever a licence contract does not address a point expressly, and these defaults are more generous to the licensee than many licensors would want. In the absence of a contrary provision, a licensee is entitled to exploit the patent, utility model, or industrial design without limitation as to time, across the whole of Kenya, and in any field of use. Conversely, and importantly for licensors, in the absence of a contrary provision the licensee may not grant sub-licences to third parties. A well-drafted licence agreement should therefore expressly address duration, territorial scope, field of use, and sub-licensing rights rather than relying on these statutory defaults, since the default position may not match either party’s actual commercial intent.

Employee and Commissioned Inventions

Getting Technology Transfer and Licensing Agreements right matters just as much for internal research arrangements as for inbound foreign licensing. Ownership of an invention made by an employee or a commissioned researcher follows a clear statutory rule. An invention made in relation to an employment or service contract, using the employer’s resources, data, means, materials, installations, or equipment, belongs to the employer. An invention made without any such relation to the employment and without using the employer’s resources belongs solely to the employee or the commissioned person. This rule applies directly and indirectly to governmental and other organisations, relevant for university, KEMRI, or KEPHIS-affiliated researchers working on licensed technology, where institutional ownership of resulting IP needs to be addressed in the underlying research or transfer agreement rather than assumed.

Other Instruments Beyond Patent Licensing

Technology and knowledge transfer in the life sciences context frequently uses instruments beyond a straightforward patent licence. KIPI’s own commercialisation guidelines address material transfer agreements (for provision of samples or prototypes for trials), confidentiality and non-disclosure agreements, joint venture agreements, and franchise arrangements. Each carries its own drafting checklist: a material transfer agreement should clearly define the material transferred and confidentiality obligations; a joint venture agreement should define the IP management structure, commonly through an IP management committee handling filings, licensing, and disputes; and any assignment of IP should be in writing, since the form of the agreement itself is a KIPI requirement, not just good practice.

Why This Matters: A Cautionary Example

Kenya’s Industrial Property Tribunal has shown it will scrutinise the underlying patent itself, not just the licensing terms around it. In a 2020 dispute, an inventor alleged that a mobile banking overdraft product infringed his registered patent for mobile virtual bank account management. The Tribunal not only dismissed the infringement claim, it revoked the patent entirely under section 103(3) of the Act on the respondents’ counter-application. For any company relying on a Kenyan patent as the foundation of a technology transfer or licensing deal, this is a direct reminder that patent validity itself can be challenged and lost in the course of an infringement dispute, due diligence on patent validity is not a formality to skip before structuring a high-value licence around it.

A related point specific to regional filings: Kenya’s courts have confirmed that a patent granted through ARIPO under the Harare Protocol is not automatically enforceable in Kenya without separate national validation through KIPI. A licensor relying on ARIPO coverage alone, without confirming Kenyan national entry, may be licensing rights that are not actually enforceable in the jurisdiction the licensee is operating in.

Cross-Border Tax and Royalty Considerations

It is worth noting that Kenya’s broader intellectual property institutional landscape has been under discussion for reform. A 2020 Intellectual Property Bill proposed merging KIPI, the Kenya Copyright Board, and the Anti-Counterfeiting Agency into a single Intellectual Property Office of Kenya, though this remains a proposal rather than enacted law as of this writing, and KIPI continues to operate as the relevant authority for technology transfer screening under the current framework described above.

A licensing arrangement bringing foreign technology into Kenya typically involves royalty or licence fee payments flowing back to the licensor, and these payments attract withholding tax under Kenyan tax law, generally at a rate that can be reduced under an applicable double taxation treaty. Structuring the payment flow, and confirming which jurisdictions have an operative treaty with Kenya, should happen at the term sheet stage, not after the licence agreement is signed, since the withholding tax treatment directly affects the net return the licensor actually receives and is often the subject of separate negotiation about which party bears the tax cost.

Companies structuring technology transfer into Kenya’s pharmaceutical manufacturing sector specifically should also coordinate the technology transfer agreement with the manufacturing licensing timeline described in our companion article on pharmaceutical manufacturing, since a technology transfer that depends on local manufacturing capacity being operational needs its commercial milestones sequenced against when the section 35A manufacturing licence and GMP certification are actually expected to be in place, not assumed to be simultaneous.

Related Reading

This is the fourth article in our Life Sciences and Healthcare series. See our companion guides to medical device and health product registration, digital health and telemedicine regulation, and pharmaceutical manufacturing licensing and EPZ incentives.

Structuring a technology transfer, licensing, or joint venture agreement for the Kenyan life sciences market? Clay & Associates Advocates advises on KIPI-compliant licensing, IP due diligence, and technology transfer structuring. Contact us to discuss your agreement.

This article is for general information and does not constitute legal advice. Every technology transfer and licensing agreement should be reviewed against section 69 of the Industrial Property Act and KIPI’s current guidelines before execution.