The exchange of technical knowledge was a prerequisite for reviving the West European economies and establishing a military counterweight to the Soviet Union during the Cold War. The economic stabilization of Western Europe reduced its susceptibility to communist overtures; making qualitatively superior weaponry available helped to contain the Soviet Union militarily by compensating for the Warsaw Pact's greater number of forces. Political and military containment of Soviet power nonetheless gave rise to contradictory demands on technology transfer policy and transfer control policy. The economy would have profited most from unrestricted technology transfer. But the qualitative superiority of Western weaponry could only be maintained in the long run by restricting technology transfer so that the Warsaw Pact would not be able to utilize Western know-how for its own weapons programs, for example by importing Western high-technology civilian goods. The development of U.S.-German technology transfer reflected these varied and sometimes conflicting political and military requirements.

Technology is defined here as knowledge about scientifically based processes, mainly technical, for the manufacture of goods. It is assumed that property rights can be exerted over technologies - that technologies are goods like any other. Patent protection, which bestows property rights for a limited period, was introduced to provide an incentive for the development of new technologies. Patent owners thus have rights over the transfer of “their” technology. Secrecy is another tool to exclude others from exploiting new knowledge.