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IPR Act Information SessionOctober 2010

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Government Gazette

REPUBLIC OF SOUTH AFRICA

Vol. 522 Cape Town 22 December 2008 No. 31745

THE PRESIDENCY

No. 1402 22 December 2008

It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–

No. 51 of 2008: Intellectual Property Rights from Publicly Financed Research and Development Act, 2008

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Object of Act

The object of this Act is to provide for intellectual property emanating from publicly financed research and development to be identified, protected, utilised and commercialised for the benefit of the people of the Republic, whether it be for a social, economic, military or any other benefit.

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Definitions

“Intellectual Property" means any creation of the mind that is capable of being protected by law from use by any other person, whether in terms of South African law or foreign intellectual property law, and includes any rights in such creation, but excludes copyrighted works such as a thesis, dissertation, article, handbook or any other publication which, in the ordinary course or business, is associated with conventional academic work.

“Publicly financed research and development”• research and development undertaken using any funds allocated by a funding agency but

excludes funds allocated for scholarships and bursaries • R&D funded by a private entity or organisation at below full cost.

“Private Entity or organisation” means a private sector company, a public entity, an international research organisation, an educational institution or an international funding or donor organisation.

“Funding Agency” means the State or an organ of state or a state agency that funds R&D.

“Commercialisation” means the process by which any intellectual property emanating from publicly financed research and development is or may be adapted or used for any purpose that may provide any benefit to society or commercial use on reasonable terms.

“Full Cost” means the full cost of undertaking R&D as determined in accordance with international financial reporting standards, and includes all applicable direct and indirect cost as may be prescribed.

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Summary of the Act

Institutional Arrangementso National IP Management Office

o Office of Technology Transfer (RCIPS)

Benefit Sharing Arrangementso 20% of initial gross revenues (R1m)

o 30% of nett revenues

Co-financed R&Do Option to exclusive licenceo Joint Ownership possible

Government Rightso Non-exclusive licence for national needs

o Non-commercialisationo Non-disclosure

Local IP Transactionso Licences - no approval requiredo Assignment - NIPMO approval

Off-shore IP Transactionso Exclusive Licences & Assignment require

NIPMO approvalo No capacity in RSA & Benefits to RSA

Disclosure and Ownership of Intellectual Property

Recipient [UCT] has title to IP if project falls within scope of ActFunder can have title to IP if project is full cost, i.e. falls outside scope of ActObligation to protectNIPMO may protect in national interest where recipient elects not to

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Benefit Sharing

Act

IP Creators and their heirs entitled to:

• At least 20% of revenue accruing to institution for first one million rand of revenues (or such higher amount the Minister may prescribe), and

• Thereafter, at least 30% on nett revenues

Regulations

• Payment not later than a year after receipt

• Nett – deducted out of pocket expenses

• Institution to develop policy to regulate b/s of non-monetary benefits

• NIPMO to approve policy

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Full Cost

Act • Any R&D undertaken at an

institution and funded by a private entity or organisation on a full cost basis shall not be deemed to be publicly financed R&D and the provisions of this Act shall not apply thereto.

• "full cost" means the full cost of undertaking R&D as determined in accordance with international financial

reporting standards, and includes all applicable direct and indirect costs as may be prescribed.

Regulations

• Each institution must every 2 years, submit to NIPMO for approval, formulae for calculation of its applicable direct costs and indirect costs together with an explanatory note

• The formulae must include the basic applicable direct costs of undertaking the R&D determined in terms of the institution's financial and related policies and in accordance with GAAP

• If not feasible to determine the indirect costs accurately, the formulae will include a determination of a surcharge in the form of a percentage to be levied on the direct costs as a best estimate of the indirect cost

• On approval NIPMO or such other agency accredited by NIPMO in terms of guidelines to be issued by NIPMO, must issue such institution with a certificate confirming NIPMO's acceptance of the institution's costing model

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Act

• Admin Agency under DST

• Supporting Role• Capacity building• Guidelines• IP Transactions• IP Fund

• Regulatory/ enforcement

• Disclosures

• Offshore IP Transactions

• Government Rights• Full-costing

Regulations

• Minister appoint Head of NIPMO

• Advisory Board (5 to 9)• Independent dispute

NIPMO

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TTO [Research Contracts & IP Services]

A recipient must :

• put in place mechanisms for the identification, protection, development, management of IP, IP transactions and, where applicable, the commercialisation of IP and appropriate capacity-building relating thereto;

• provide effective and practical measures and procedures for the disclosure of IP and ensure that IP is appropriately protected before results of such R&D are published or publicly disclosed by other means;

• Ensure disclosures are made within 90 days or such longer period as may be prescribed, of identification of possible IP and before the IP is made public;

• assess the IP to determine whether it merits statutory protection and, where appropriate, apply for and use best efforts to obtain statutory protection in its name;

• refer disclosures for which it elects not to retain ownership or not to obtain statutory protection to NIPMO within 30 days or such longer period as may be prescribed, of it making such an election;

• in the case of an institution, manage revenues due to it from IP transactions and the commercialisation thereof, including managing the benefit-sharing arrangements with intellectual property creators at the institution.

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Referral to NIPMO

Not Required

Where the IP:• Cannot be protected through

statutory registration, or• Further R&D required before

protection can be obtained, or• Has no prospects of addressing

socio-economic needs of RSA

Required

Recipient does not wish to obtain protection or retain ownership of IP:

• which can be protected, or

• has commercial prospects, or• can contribute to the socio–economic needs of RSA, or• Because recipient wishes to place IP in public domain

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Disclosure to RCIPS on Invention

Disclosure Form

Assessment by RCIPS

Report to NIPMO. Twice Annually on Form IP7 [Reg 14(1)(a)]

Failure to disclose - NIPMO takes IP [Act 14(5)]

Refer to NIPMO

[Form IP1]

Protect

No societal / economic benefit

More work required

Return to IP Creator (and Co-funder)

90d

30d

60d

30d

Return to UCT

Prior to Public Disclosure Zone

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Government Rights

Act• Non-exclusive, royalty-free, non-

transferable, worldwide licence for use by Government for health, security, strategic & emergency needs

• Non-commercialisation• Walk-in rights : Failure to

disclose – assignment of IP to government

Regulations• "The intellectual properly under this transaction was

created with support from the South African Government; ((under the contract number where applicable) awarded by (identify the Funding Agency or relevant government department) where applicable» and is subject to the requirements of the South African Intellectual Properly Rights from Publicly Financed Research and Development Act, 2008 and its regulations (Act 51 of 2008"). The South African Government has certain rights to the intellectual property in terms of sections 11(1)(e), 11(2) and 14 of Act 51 of 2008".

• Consult with recipient to address non-commercialisation/non-performance

• Clear ‘proclamation’ process of walk-in rights

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NOTES a) If IP is claimed: all projects need to be costed at full cost b) Terms under which funds are provided need to be known and considered

before the submission of a proposal c) Unless otherwise agreed in a faculty, all budgets must be signed off by an

authorised faculty official (FO) and where applicable the PI and FO must confirm that project was budgeted at full cost

ACTIONS a) One uniform cost model must be implemented b) National initiative c) Funders’ Guidelines d) Sign-off page (costing, previous funders, background IP) e) IRMA

Summary, Notes and Actions

a) A Client/Funder can only claim rights to Intellectual Property if at least the full cost of the project is charged (this includes the cost of GOB-paid staff members working on a project).

b) If a foreign entity wishes to own the rights to the IP, the above apply and in addition Reserve Bank approval is required.

COSTING OF RESEARCH PROJECTS

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Summary, Notes and Actions

DISCLOSURE OF INVENTIONS

Implement effective and practical measures and procedures for the disclosure of intellectual property and ensure that intellectual property emanating from any publicly financed research and development is appropriately protected before results of such R&D are published or publicly disclosed by other means;

NOTES

• Published or publicly disclosed, means any form of disclosure to another party.

• Non-disclosure Agreements

ACTIONS

• Start of Project: Acceptance letter • End of Project: Declaration letter• Develop procedures in collaboration with departments/faculties

Grants/Contracts that fall under the Act

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Co-ownership of IP

4 criteria need to be met:

a) Contribution of resources – funding, background, materials/ in-kind, etc.

b) Co IP creation – i.e. they need to be regarded as an inventor on a patent.

c) Benefit share with IP creators

d) Must enter into commercialisation agreement

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Collaborations

In terms of IP arising from collaborative research funded by one or more international funding / donor organisations, or research institutions, UCT must:

•Retain ownership of IP developed by UCT researchers and co-own jointly developed IP•Use reasonable endeavors to ensure that commercialisation of the IP•Provide access to collaborators in line with international norms / agreements•IP can be licensed to collaborators and even assigned (although NIMPO approval required and all usual conditions relating to on-shore and off-shore transactions remain)

•If access granted for commercialisation by a collaborator on royalty-free basis, then NIMPO approval required at proposal stage•Guidelines will be published by NIPMO in respect of multi-party collaborative R&D agreements

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Upfront Referral of Research Contract to NIPMO

• Royalty-free access to the IP• Licensing at below market rate• OpenSource output

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• A funder funds a research project that is supervised and worked on by Prof. X. They pay for all materials and for the time of technical officers. Can the funder claim the IP?

• No:– Prof. X’s time not covered– no overheads were included– project not costed at full cost

• Project falls within scope of Act as there is inherent government subsidisation, i.e. there does not need to be direct contribution of money by government.

• Funder could access IP via exclusive license.

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ices More information…

www.rcips.uct.ac.za

• Act (including FAQs)• IP• Invention Disclosure Form and patenting process• IP team contact details• Patenting and IP Management seminars – see

Seminars page

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QUESTIONS