Intellectual Property creators at universities get to share in the benefits

Sixty per cent of South African universities reported that they were not empowered to commercialise their Intellectual Property (IP) through spinoffs, start-ups or incubators. This was the finding of a survey conducted by the National Intellectual Property Management Office (NIPMO) which sits in the Department of Science and Technology and deals with publicly funded research and development (R&D) IP.

Dr Buis said that over the past 10 years, NIPMO has distributed R142-m as a part of its IP Fund. This fund provides financial support for statutory protection and maintenance of IP and covers things such as novelty searches, renewals of patents and prosecution costs.

NIPMO’s TTO Support Fund establishes and maintains Technology Transfer offices, building the capacity of the people in those offices and empowering the TTO to protect the IP. She said: “Since 2011, this fund has concluded 25 agreements, supported 31 institutions and two regional offices. We have created over 170 positions with the associated training opportunities and operational costs and, in over 10 years, our support has totalled R270-million.”

For guidelines on how to access these funds: www.nipmo.dst.gov.za/about

To get universities to capitalise on research, Dr Buis said NIPMO is an enabler as well as a regulator. “As enabler there are NIPMO incentives to IP creators. To protect, commercialise and promote innovation, we have the IP Creators Recognition Certificate that acknowledges the role played in contributing to an innovation agenda. We also work with Department of Higher Education and Training in aligning the incentives to their programme,” she said.

NIPMO, Dr Buis added, has partnered with science councils. She encouraged academics to visit the Department of Science and Innovation’s Innovation Bridge Portal. www.innovationbridge.info   “It is a match making platform that brings IP creators, industry and funders together. It’s worth looking at, to see what technologies are listed.”

She added: “Regarding the Innovation Bridge Portal – you will be delighted to know that 54% of technologies that are available on the portal come from universities, 16% from Science Councils and 28% from SMEs and startups.”

She explained that IP, which is defined as “the creation of the human mind”, is divided into two categories:

• Industrial Property – inventions, designs, plant varieties, marks and logos;
• Copyright – literary works, films, music and even computer programmes.

“IP Rights are rights given to people over these creations of their mind.” The requirement for a patent, which is the IP right for an invention, is that it must be new; inventive and have a utility value. Patent holders get a 20-year monopoly to use that invention. Dr Buis said: “You could also have copyright in the form of literary works associated with it.”

She used an example of a literary work to illustrate one type of IP.

“Take George Orwell’s essay, A Nice Cup of Tea: the copyright automatically subsists in the work and it lasts for the author’s lifetime plus 50 years in SA and 70 years in United States. “Orwell’s essay was published in 1946 and lasted for the rest of his life, which was four years since he died in 1950. In South Africa that copyright would have expired 50 year later in 2000, or 70 years later in 2020 in the United States.”

Trademarks, Dr Buis said, give customers confidence. “People will say, for example, that they only drink Dilmah tea. They also prevent people from copying your brand as certain IP rights are associated with Trademarks.” She narrated how the South African Rooibos Tea industry took on a company that had infringed its US registered trademark and won.

She explained: “Geographical indicators are associated with a region and certain product qualities leading to a geographic origin. With the Rooibos example, the Cederberg region of the Western Cape is the only place where rooibos is grown. In 2014 Rooibos tea was protected as the first non-alcoholic geographic indicator. Champagne, which is French region specific, forces us to call our version sparkling wine.”

The aim of the 2010 IP Rights Act was to provide more effective utilisation for IP emanating from publicly financed research and development. Dr Buis: “This R&D must be identified, protected, utilised and commercialised for the social or economic benefit of the people. The Act also wants human ingenuity and creativity to be acknowledged and rewarded – there are preferential clauses for small enterprises.”

To see if the Act applies, three questions need to be asked.

1. Was the IP created after 2 August 2010? (When IPR Act came into effect).
2. Was the IP created as the result of R&D activity? If Yes,
3. Was the IP created using Public Funds? If yes, then the IPR Act applies.

Before 2010, Dr Buis explained, IP ownership was contractually determined allowing Government or international companies to own IP that was funded by the taxpayers’ purse. “The Act made IP ownership legislated. In general, the recipient – the university conducting the R&D – will own the IP emanating from it.”

The Act provides for three possibilities:

• The university owns the IP that was developed by the researchers at that university.
• There is co-ownership through collaboration between the university and the private sector.
• The full cost option – universities sometimes do R&D as contract research. If funding covers both the direct and indirect cost, the IP Act does not apply.

For a university to assign IP there are approval requirements listed in The Act.

Said Dr Buis: “They can licence it and if it is for commercial use, no approval is needed. “Only when it is royalty free or there is an nonexclusive licencing agreement would that approval be required.” NIPMO took great care to not withhold approval unreasonably.

She also noted that since the introduction of the Act, Government has certain access rights to IP in times of emergency. “We are in the middle of a pandemic which gives the State the right to access IP. This is not without cost; they do not get the IP for free.”

Dr Buis said that in the past, researchers got the benefits from the commercialisation of the IP if it was in the contract. If it was not, they would not have benefited. “This has been changed in the IPR Act. Now, universities are legislatively mandated to share benefits, which includes the revenues that accrue when the IP is commercialised, with the IP creator.

“The minimum percentage that IP creators are entitled to is 20% for the first R1-m and thereafter 30% of the net revenue. Those are minimum requirements; but we often find that universities push those sums up quite a lot.  “There is an understanding that IP creators must be kept happy and be given their just reward. It’s a great incentive to continue research.”

Dr Buis said that NIPMO was engaged in advocacy through its IP Wise programmes.  “On World Intellectual Property Organisation (WIPO) Day, which is 26 April, we help institutions to popularise IP within their organisations and make researchers aware of the IPR Act and get them to understand the benefits of commercialising their IP.”

Regarding NIPMO’s regulatory and compliance mandate – universities have to submit their IP policies to ensure they are compliant with the Act.

Charmain Naidoo is a contract writer for Universities South Africa.