Speech by Naledi Pandor MP, Minister of Science and Technology, National Intellectual Property Management Office, Diep in die Berg, Pretoria
Kerry Faul
Guests
It's only been five years. South Africa's Intellectual Property Rights from Publicly Financed Research and Development Act came into effect in 2010. The National Intellectual Property Management Office, known as NIPMO, was subsequently set up to implement the Act.In addition to giving policy guidance where required, NIPMO provides support to the offices of technology transfer at our publicly funded research institutions. This has led to significantly improved IP management in our universities and other research institutions.
It wasn't all as simple as that sounds - in the beginning. There was a fuss over what was deemed by some to be a "nationalisation” of university IP.
Let me explain. The Act applies whenever public funds, however small, are used for research and development. The Act takes ownership of intellectual property away from the individual inventor, although in most instances this would have happened any way in terms of the employee’s employment contract, and vests it in the public institution in which the research was conducted. The institution is then obliged to protect and commercialise the IP, and to share any benefits of such commercialisation with the IP creator. The Act says that of the first R1 million of gross revenues, IP creators must receive a minimum of 20%.Thereafter they must receive at least 30% of net revenues. If the institution chooses not to protect and commercialise IP, it is required to pass it on to the state via NIPMO(created in terms of the Act).
In commercialising intellectual property, the Act requires a preference for local commercial partners, as well as small, medium and micro enterprises and broad-based black economic empowerment entities.
The Act is modelled on the United States Bayh-Dole Act, passed in 1980. Bayh-Dole has been credited with unlocking the innovation potential of American universities. The Philippines passed similar legislation, and India did as well, despite heated arguments against it. South Korea enacted its Technology Transfer Facilitation Law in 2000, and by 2004 had outstripped SA’s patenting rate, coming off a fairly similar base in 1999.
University IP managers are positive about the new Act. According to Rory Moore, previously of the University of KwaZulu-Natal, and who is now in private practice largely servicing universities, the legislation seeks to “address the situation where IP lies idle at universities or is sold off to private companies, often overseas, with no benefit accruing to the university, the government or the South African people”.
Andrew Bailey at UCT, who unfortunately could not make it as he is lecturing at our WIPO Summer School in Durban, raised one concern back then. He saw it discouraging business from investing in the DTI’s THRIP (Technology and Human Resource for Industry Programme). Under THRIP the government matches business investment in research projects. UCT saw companies opting to pay for all research in order to retain IP. This reduced the overall funding to the university. However, NIPMO took this challenge within its stride and, within the mandate of the IPR Act, allowed special dispensations for THRIP-funded projects.
I'm pleased to say that the DST is to take over THRIP from the DTI. There had been a concern that the DTI would replace it with a programme less advantageous to university-business research collaboration. We will ensure that university-business research collaboration goes from strength to strength.
IP is a relatively new concept for many developing countries and public research institutions. The IPR Act has fundamentally changed the way in which higher education institutions and "science councils" operated prior to 2 August 2010. The legislation is very inwardly focused aiming to ensure that benefit accrues to the Republic following commercialisation and use of the IP developed, but all the time recognising that South Africa needs to remain a relevant, competitive and global player in the provision of technologies that offer solutions to local and global problems.
Africa has been lagging behind developed nations in this regard. We need to collaborate with each other, and share knowledge and our collective experiences, so that Africa can compete with the best in the world. We need to develop the capacity to create and leverage the intellectual property that is so essential to the development of developing countries.
Over the past five years, NIPMO has systematically refined the South African IP management regime. The NIPMO was set up initially as an interim office (mid 2011) within the Department of Science and Technology. On 13 December 2013, NIPMO was established as a Specialised Service Delivery Unit (SSDU) within the Department.The organisational form of the SSDU, the first one ever established by the South African government, provides NIPMO with the ability to perform its operational functions set out in the IPR-PFRD Act independently of the Department, but at the same time to operate as a sub-programme within the Department in terms of support functions (including HR, Finance, IT).
I should add that NIPMO provides support to industry, not directly but indirectly. The IPR-PFRD Act drives researchers to perform more innovative applied research. There is an assumption that the more innovative the research, the more relevant it is to industry. In addition, one of the roles of an technology transfer office is to foster improved relationships with industry.
The value of an IP regime is measured in terms of its economic value to a country. Boosting R&D and innovation is a growing priority for policymakers. The challenge is to reform our IP regimes, while limiting the potentially adverse effects of improved protection. The greatest level of economic efficiency occurs with the widest possible dissemination of new knowledge. Yet that's the problem.If innovations and new knowledge are openly accessible to all, inventors and innovators will have little incentive to commit resources to research to produce that new knowledge.
It's crucial then to ensure that the fine balance between research, knowledge dissemination and utilisation is maintained. Many new life-changing products, especially pharmaceutical and biotech products, would simply not have made it to the market without adequate IP protection.
It's so important, then, that we encourage our universities and public research institutes to generate intellectual property and to protect it in the form of patents, designs and plant breeders’ rights amongst others, in order to enhance their global competitiveness.
I should add though, that although patenting is a common IP management tool, it is by no means the only one. Traditional or indigenous knowledge is an important part of a country's intellectual property. A few years ago the DST launched the National Recordal System, an initiative to record, protect and promote South Africa's invaluable wealth of indigenous knowledge.
Technology innovation plays a pivotal role in economic development, and intellectual property is at its heart.
