Exchange Control and IP from Clinical Trials

Changes to the South African Exchange Control regulations in 2012 clarified that intellectual property is regarded as capital. This has had a number of perhaps “unexpected consequences”. One important issue is the approval needed for clinical trials.

Clinical trial agreements typically provide for clinical trial data to be transferred to the sponsor, as well as inventions, copyright in notes and reports. All of these are intellectual property within the broader definition of intellectual property and as such Exchange Control approval is required for the transfer of these rights and the data sets to the sponsor. The various issues are discussed in more detail in the ENS information sheet.

UCT has obtained SARB approval for the clinical trial agreements that the university has entered into since 2012. At a recent panel discussion at “Innovation Bridge” SARB indicated that they would be engaging to see how these approvals can be streamlined for universities going forward. At present UCT is submitting agreements that have been categorised into various types of “conditions” as a means of streamlining the decision making. Other SA universities are also being encouraged to submit their clinical trial agreements so that SARB can build up a body of evidence on which to base their approvals protocols.

In terms of the IPR Act there are issues with clinical trials too where funders are wanting to claim IP, but full co, with special dispensation relating to clinical trials for specific infectious diseases which include HIV/Aids, TB, malaria and neglected diseases.

Clinical Trials in phases 1 to 3 are regarded as “research” and as such fall under the IPR Act where they are not conducted at full cost. There have been challenges negotiating contracts with philanthropic funders who are focussed on diseases such as TB, cannot pay Full Cost, but want certain IP rights. It is important for both the university and the country to be able to participate in these trials as there are broad benefits. NIPMO has granted upfront approval for IP transactions (that include royalty-free non-exclusive licenses, offshore exclusive licenses, or local and offshore assignments) for specific infectious diseases which include HIV/Aids, TB, malaria and neglected diseases (see the NIPMO advice on clinical trials that can be downloaded from the right-hand column for the full list of neglected diseases), where a philanthropic organisation or its intermediary is funding the trial, at below full cost. There needs to be an objective to making the drugs being tested available at a preferential rate or reduced cost in developing countries. - See more at: http://www.rcips.uct.ac.za/rcips/ip/pfbill