Puzzle Pieces of the Draft IP Bill Begin to fall into Place
At a presentation hosted by the Licensing Executives Society, McLean Sibanda (Senior Patent Attorney, Innovation Fund) overviewed the current status of the draft Bill covering IP from Publically Funded Research. Following its first release for public comment in May 2007 the Bill has been significantly revised and many of the initial concerns raised have been addressed. RCIPS Director, Piet Barnard participated in the Stakeholder workshop held on 7 March 2008 and the remodelled Bill is with the State Law Advisors prior to it entering the Parliamentary process towards becoming an Act of Parliament.
The Portfolio Committee will navigate it through the last phases of stakeholder and/or public input prior to preparation of the final draft, with the aim of presenting it to the National Assembly in May 2008 and it being signed into an Act of Parliament.
After considering the 70-odd public submissions received on the first draft of the Bill, an Expert Review Panel was constituted with representatives from India, Canada, USA and South Africa. The panel reviewed the public comments, the initial Policy Framework and the draft bill released in May 2007 against the new bill, with the brief of determining whether the current version addressed the concerns raised, was in the 'spirit' of the approved IPR Framework for Publicly Financed Research and was seen as "enabling".
McLean discussed the 8 core issues that were raised around the draft released in May 2007.
1. Scope
Particular concerns were raised during public and stakeholder consultation around Copyright. The revised Bill has been focussed on "creations that can be protected through any law", but excludes copyright in publications, theses and journal articles. The policy focuses on inventions and there was a need to consider software and plant breeders.
The scope covers Publically Funded research and extends now to all entities that are publically funded, i.e. over and above institutions and science councils, to e.g. SMMEs being funded by BRICs, etc. Also, the Bill is associated with funding for R&D, not equipment or bursaries.
2. Disclosure
The new draft has less prescriptive timelines and biennial reporting to the National Intellectual Property Management Office (NIPMO) will be required.
3. Benefit Share
IP creators (at institutions) have been protected by ensuring that they receive 20% of gross revenues accruing to the institution.
4. IP Offices at Institutions
An 'Office of Technology Transfer' (OTT) must be established by each tertiary institution, although its functions may be housed within a differently named group - e.g. RCIPS at UCT - and their key function will be analysing the disclosures in terms of their likelihood of success of commercialisation.
5. NIPMO
The role of the National Intellectual Property Management Office (NIPMO) has been moved to one focussed more on co-ordination and capacity building. In cases where IP licensing (when arising from publically funded IP) falls outside the guidelines (e.g. to a foreign entity), NIMPO will still need to be consulted.
Although it was the original intention for NIPMO to be part of the new Technology Innovation Agency (TIA), it has been decided that for the time being it will be a separate entity housed within DST. This will allow possible conflicts between TIA and NIPMO to be defined and understood.
6. IP Transactions
Although there is a preference for BBBEE and SMMEs to be involved in IP transactions there is now latitude to structure the best deal possible which may omit these preferences if it is absolutely essential. If one structures anything offshore, understandably, there will be a need to prove that benefits do indeed accrue to South Africa; exchange control regulations will also need to be observed.
Provision has also been made for IP to revert to an institution, should one assign IP to a start-up company to whom IP has been assigned be liquidated.
7. Walk-in Rights for the State
These terms are actually already being included in Innovation Fund contracts. The State will be granted a non-exclusive, non-transferrable license to IP in the case of an emergency- it appears as though there is a bit more work to be done on defining what constitutes an emergency as was evident during question time where the apparently impending fuel crisis was discussed in the context of PetroSA vs. Sasol IP as an example.
Walk-in will also occur if the Institution does not commercialise the IP. Here again, the intention is for NIPMO to engage, understand and assist; no timeline has been specified, allowing for the difference in commercialisation timelines in different sectors, e.g. biotechnology where IP can take up to 15 years to reach the market.
The rights will also exist when IP has been commercialised without it being disclosed to NIPMO!
8. Co-funded Research
The Bill is attempting not to hinder public-private sector participation. With co-funded research there is the possibility for an exclusive license to be granted, provided that the company is best placed to commercialise the IP.
Full ownership is possible as long as research and development by a university is conducted on a full cost basis, which is defined as the full economic cost to undertake the R&D according to Generally Accepted Accounted Principles (GAAP) that considers both direct and indirect costs. This makes provision for firms to protect IP defensively, i.e. to protect the IP arising from research, but not requiring it to be commercialised.
Please note: this report was based on notes taken by Andrew Bailey who attended the meeting and it does not represent an official view / statement by DST or UCT and is intended for general information purposes.