21 November 2017 Register to receive our free newsletter by email each week
Advanced Search
View Printable Version
SOUTH AFRICA: Jury out on intellectual property laws

Will South Africa's Intellectual Property Rights from Publicly Financed Research and Development (IPR) Act incentivise or bureaucratise innovation at public universities? Some academics are concerned about the law's impacts on international collaboration and open access to research, among other things. But it seems only time will tell.

Regulations to the 2008 Act were published last month after multiple stakeholder consultations and amid ongoing concerns that the legislation, despite its worthy intentions, would impede the flow of knowledge, not only between academics and researchers but also in the public domain.

In the absence of previous regulation of intellectual property (IP) emanating from publicly-financed research and development, the Act sets out to provide a framework for public universities and other research facilities, industry and government in terms of which state-funded research is used to benefit South Africans and, ultimately, improve lives.

According to Rory Moore, director of the University of KwaZulu-Natal's Intellectual Property and Technology Transfer Office set up in late 2008 in terms of the Act, 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".

To this end, the act takes ownership of intellectual property away from the individual inventor 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 (US$140,000) 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 a National IP Management Office created in terms of the Act, says Moore.

The Act applies whenever public funds, however small, are used for research and development and is modelled on the United States Bayh-Dole Act, passed in 1980.

According to Moore, university technologies have helped to create nearly 6,000 new companies in the US since the Bayh-Dole Act was enacted. Since November 2008, when the IP office was established at KwaZulu-Natal in terms of the Act, the university has seen an increase in numbers of provisional patents being filed: from one or two every year to 17 in the first year of operations.

Other potential advantages of the legislation, says Moore, include better management of government funding and tax payer's money, improved IP management at public institutions and a uniform national framework for national IP management. The Act offers protection for researchers and private industry, encourages thinking on how best to use inventions, and offers a possible source of income for universities.

Moore said the legislation also relieves individual inventors of the financial and administrative burden of applying for patents and prosecuting them through to the grant stage, a process which can easily cost R1 million. The process is also "risky". According to Moore, success is expected in only 1% of inventions disclosed.

But relieving academics of previously held rights and freedoms to exploit their own IP could be the substance of a constitutional court challenge, believes Moore.

The legislation also upsets the conventional and time-honoured route taken by academics seeking recognition for and exposure of their work - publication.

Under the new dispensation, academics must delay publishing their intellectual property until appropriate statutory protection has been obtained, for example, a patent application has been filed.

"It is a feature of patent law that patent protection cannot be sought for something already in the public domain," said Moore. The necessity to delay publication is a concern for researchers, he said, but publishing could follow as soon as the patent application had been filed (as opposed to granted).

Will the legislation help to bring South Africa closer to the holy grail of a knowledge economy? Yes, but not in the short-term, and not without considerable financial outlay, Moore told University World News.

"Certainly, the Act will result in increased disclosure of new IP, less neglect of existing IP and increased effort directed into IP development, protection and commercialisation," he said.

The legislation is also likely to raise the numbers of companies formed and products reaching the marketplace, reduce the number of inventions leaving the country and increase the number of people generating an income based on intellectual property, he said.

"However, we should not expect to see these benefits for up to 20 years or longer. The question is whether the investment necessary to sustain this process through to success is tolerable."

The fact that technology transfer offices around the world seldom produce sufficient IP income to cover their costs is not lost on critics of the local legislation who also question the practical workability of the legislation, given the volume of research produced, as well as potentially negative implications for institutions participating in research consortia and courting foreign funders.

Eve Gray of the Centre for Educational Technology at the University of Cape Town, argues that the Act frames the commercialisation of research through patenting and IP protection as the only way to achieve the wider benefit the law seeks from publicly funded research.

"The legislation appears to see open innovation, open source and open access as aberrations that need to be controlled through a bureaucratic process of government scrutiny," she wrote in the national newspaper Business Day last year.

Gray told University World News that the IPR Act, and its regulations, did not adequately address the issue of research collaborations with international partners.

"Today, most research is collaborative. Under this legislation, it would be difficult to involve South African researchers in a large and urgent international research effort, like that undertaken to address the Swine 'flu epidemic. They would first need to seek permission for their involvement."

Gray said she also anticipated resistance from large global funders who insisted on open access to research.

Some of these concerns were echoed by Anita Nel, CEO of InnovUS, the wholly-owned technology transfer company of Stellenbosch University, which was established over 10 years ago - long before the IPR Act came into being - to manage the commercialisation of the university's innovation and intellectual property.

Nel said while the institution is positive about the new legislation and had commented on all versions of the Act and its regulations, the company was experiencing "significant resistance and problems" in dealing with open source and general software projects.

"We feel that the regulations should be adapted to accommodate the issue of open source software contributions in a far more practical manner," she told University World News.

Nel says there are also concerns about the "added levels of approval" needed to conclude some commercial agreements with foreign entities.

"We do feel that it [the Act] not only adds to the complexity and length of concluding such transactions, but we have already experienced some hesitance and a number of queries from foreign companies interested in commercialising our technology."

Nel said although the new relationship between InnovUS and the National IP Management Office would "add significant amounts of paperwork", she believed this could be managed "through proper processes and procedures" already in place.

As in most pieces of legislation, a balancing act is required.

Moore said in his view the arguments against the IPR Act were outweighed by the benefits the Act offers to research institutions, industry and government. However, he called for some relaxation of the regulations relating to foreign collaboration on the grounds that opportunities for partnerships with private industry were more limited in South Africa than in the US, from whence the legislation originates.

As the Act currently stands, any contract dealing with collaboration with foreign funders which is affected by the IPR Act - in other words, any contract not fully funded by the foreign party - may have to be checked by the national office, as it will likely be an 'offshore transaction' for purposes of the Act.

On the issue of open source systems, Moore said although the Act does have a mechanism for placing IP in the public domain through open-source systems, provided that the various requirements are satisfied, there is concern that the bureaucracy involved in seeking approval could hamper the free flow of research.

The only way around the issue, he said, is to ensure that funding from overseas funders is done on a full-cost basis, in which case the act does not apply and the IP can be dealt with according to the agreement with the private funder.
Receive UWN's free weekly e-newsletters

Email address *
First name *
Last name *
Post code / Zip code *
Country *
Organisation / institution *
Job title *
Please send me UWN’s Global Edition      Africa Edition     Both
I receive my email on my mobile phone
I have read the Terms & Conditions *