Abstract:Because the knowledge transfer mechanism is a special internal thread in the mode of production and research cooperation, it is considered the key to the performance of the contract design with the formal contract, especially the positive incentive function. And how to design the physical contract relatively so as to effectively supervise and restrain the invisible knowledge transfer mechanism, especially positive incentives, is the necessary innovative thinking in the conventional process of production, management, storage and transportation links of special products based on knowledge. It needs the systematic analysis and controlling on many factors of knowledge transfer in university industry cooperation mode including occurrence mechanism, cost and risk mechanism, mechanism of psychological relationship. Combined with the principle, content and application of research, contract design of incentive regulation should be made, exploring the special and key invisible resource of knowledge including products, profits and capital.