P Mjwara: Intellectual Property Rights Conference

14 August 2007

Programme Director
Distinguished guests and delegates
Ladies and gentlemen

I am extremely humbled by this opportunity to address so important a
conference as the one on Intellectual Property Rights.

I am certain this entire conference harbours no illusions about the
importance of Intellectual Property within the global markets. In fact,
Intellectual Property has become a very critical subject matter in today's
knowledge economy.

It would thus appear that an abundance of natural resources is no longer
adequate for a nation's prosperity. What is more important today is a nation's
ability to generate new knowledge and translate that knowledge to goods and
services that can be traded and that can benefit society. It is in this ability
that lies the debate and also the need to understand the various facets of
intellectual property.

The discussions on intellectual property have even transcended to efforts to
find solutions to provide access to medicine and health. We have also seen an
increased focus on the protection of indigenous knowledge systems and the
interface with existing intellectual property modalities.

Needless to say, the importance and relevance of intellectual property has
never been as topical as it is today.

Distinguished delegates, more and more developing countries are realising
the importance of being part of the global intellectual property system. It is
very critical for our nation to be a player in what Thomas Friedman in his book
"The World is Flat" calls, the Flat World! Various studies, including those
conducted by the Organisations for Economic Co-operation and Development
(OECD), strongly suggest a correlation between levels of R&D spend and
level of innovation of a country; and that intellectual property can be used as
a proxy for the level of innovation of a country.

Thus, with increased investment in research and development (R&D) it is
important to fully understand how to protect the knowledge produced by such
R&D using conventional intellectual property and suit generic methods of
protection, so as to influence the manner in which such knowledge can be fully
exploited to the benefit of society. This should include serious debates on how
we can use intellectual property as a tool rather than a hindrance to providing
access to health and medicine, particularly in developing nations. I want to
suggest that this could include negotiation of humanitarian provisions on
licensing of intellectual property generated with public funds, for
example.

By being part of knowledge generation, the intellectual property rights that
can be obtained in respect of such knowledge can be creatively and usefully
leveraged by developing countries such that they contribute to reduction in the
cost of medicine, where such intellectual property rights arise, for example
from publicly financed research or strategically structured contract
research.

Particularly in developing countries, it is important that the focus on
knowledge generation, intellectual property protection, and exploitation be
aligned with national imperatives, such as access to health, food security,
energy security, and the like, so that developing countries can be meaningful
participants in the global economy.

Let me illustrate further:

The Business Day on 19 July 2007 ran an article with the following headline
"Patent loss, dip in sales hurt Pfizer earnings, Lipitor sales plunge 13%".
Apparently this drug for cholesterol is now off patent and competitors have
reduced revenues that this drug was bringing for Pfizer. On the other hand, the
loss of patent protection and accompanying revenue losses have contributed to
loss of jobs and factories closing by Pfizer.

The July 2007 edition of Managing Intellectual Property (MIP) reported that
"Microsoft and LG electronics are to cross-license their patents in a deal that
will see the US software company makes a net payment to LG".

I believe the above examples clearly illustrate the importance of
intellectual property and how this has become a trading currency or a proxy for
a company or nation's potential for prosperity in today's global economy.

Other examples that strengthen this argument are the growing number of
patents that have been licensed with humanitarian provisions, such as for
example, Yale's stuvidine (d4T) widely used antiretroviral drugs. Yale
negotiated a price cut, which immediately reduced the price of this drug in
Africa by almost 40%.

Whatever the debate is on this matter, there is evidence, although in some
cases anecdotal, which suggests a very close relationship between a nations'
competitiveness and intellectual property generation ability.

Here I refer to examples of South African IP funded by the state:
There is an example of where our Department has played a role in the generation
of intellectual property that has potential for energy security for South
Africa. This is the funding by the Innovation Fund of the development of thin
film photovoltaic or solar panel technology by a Consortium led by Professor
Vivian Alberts at the University of Johannesburg. Although this technology has
initially been licensed for commercialisation in Germany, the planning for the
establishment of manufacturing capability in South Africa within the next year
is at very advanced stages.

Some may ask why this technology was first licensed in Germany as opposed to
being commercialised in South Africa. One of a number of reasons is the Euro 20
million subsidies that were provided by the German government to the German
licensee, as part of its alternative energy policy. It is therefore important
that we develop policies and strategies that will not only incentives knowledge
generation and intellectual property protection, but also intellectual property
exploitation in South Africa first and foremost.

This will naturally include mechanisms to grow the South African venture
capital industry as well. This is an area in which the Technology Innovation
Agency that is being established by the Department of Science and Technology
hopes to play a significant role, to ensure energy, health, environmental and
food security.

Our focus as Department of Science and Technology's on IP has been:

In the 2002 R&D Strategy released by the Department of Science and
Technology, which emphasises the importance of intellectual property. In
particular, the R&D strategy clearly identifies the need for South Africa
to have a formal policy framework for intellectual property protection of
publicly financed research and also to establish a dedicated fund for
protection of such intellectual property.

In December 2005, Cabinet approved a draft Policy Framework for intellectual
property from Publicly Financed Research, for broader consultation. In June
2007, Cabinet approved the Final Policy Framework and draft legislation. The
draft legislation has been published for public comment.

It is important that the final legislation provides an enabling environment
for intellectual property creation, protection, management and
commercialisation. In this regard, the Department of Science and Technology
will endeavour to make such revisions of the draft legislation as is
appropriate to achieve this, as informed by the various comments and inputs
already received from stakeholders.

Of further importance is that the legislation will provide, amongst other
things, the following: greater clarity on the ownership of intellectual
property generated from publicly financed research; definite and clear
obligations attaching to ownership of intellectual property; clear benefits for
researchers to disclose their inventions to the institutions, including access
to skills and funding to commercialise such inventions; framework for capacity
to be established to ensure that South African institutions have the ability to
timeously identify, protect, an commercialise intellectual property arising
from research being conducted at the institutions.

Ladies and gentlemen, intellectual property protection is often an expensive
exercise, which competes with other priorities for resources. In this regard,
in 2004, the Innovation Fund, an instrument of the Department of Science and
Technology managed by the National Research Foundation (NRF), in accordance
with the vision embodied in the R&D Strategy, established the Patent
Support Fund, as the Intellectual Property Fund to provide wholesale subsidies
to institutions for patent costs incurred in respect of intellectual property
arising from publicly financed research.

To date, this fund has disbursed in excess of R10 million to subsidies some
R25 million spent by publicly financed institutions on intellectual property
protection in the period 2003 to 2005.

The Department of Science and Technology has committed R3 5 million towards
the establishment of a fully searchable patent database to be housed by the
Department of Trade and Industry's Companies and Intellectual Property
Registration Office (Cipro). This initiative should make intellectual property
information accessible to more South Africans.

Thus, as we discuss intellectual property issues in this forum, it is
important that we start to educate the masses of our people about intellectual
property matters. Without any doubt, there are merits on the debates such as
open source systems. However, such debates cannot be fruitful until such time
as a greater part of our nation can be able to meaningfully participate in all
different types of debates on intellectual property.

In closing, I sincerely hope that your deliberations will provide
recommendations that will inform how our policies in government are developed
to properly deal with intellectual property issues to take South Africa further
in developing the true knowledge economy that we all aspire to be.

I must thank you again for the opportunity to address such an important
gathering.

Thank you.

Issued by: Department of Science and Technology
14 August 2007
Source: Department of Science and Technology (http://www.dst.gov.za)