NIPMO’s role and mandate, and IP as a tool for economic growth

Occasion: Select Committee on Communications and Public Enterprises

Date: 23 September 2015

OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

3

• NDP states: “Innovation is the primary driver

of technological growth and drives higher

living standards”.

• “Innovation” may be described as a

“multi-stage process whereby organisations

transform ideas into new/improved products, services or processes, in order to advance, compete and differentiate themselves successfully in the marketplace”.

• Universally accepted that intellectual property (“IP”) and the associated rights are a critical aspect to innovation and economic growth.

• Thus, IP holds the key to our future.

IP, Innovation and the NDPIP, Innovation and the NDP

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OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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• Intellectual property refers to “creations of the mind”.

• Divided into two categories:

– Industrial property (including inventions, designs, plant varieties, and marks

or logos); and

– Copyright (literary works, music, films etc., as well as computer programs).

• Intellectual property rights are the “rights given to persons

over their creations of the mind”, namely

– a patent for an invention

– a plant breeders’ rights for a new plant variety; or

– a trade mark for a mark.

What is IP and IPR?What is IP and IPR?

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OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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OECD ReviewOECD Review

Science & Technology White Paper

Science & Technology White Paper

Technology Foresight Studies

Technology Foresight Studies

R&DStrategyR&DStrategy

IPR PolicyIPR Policy

10 Year Innovation Plan 2008-18

10 Year Innovation Plan 2008-18

IPR Act & IPR Act & RegulationsRegulationsIPR Act & IPR Act & RegulationsRegulations

Technology Innovation Agency Act

Technology Innovation Agency Act

NSI Challenges:

•Existence of innovation “chasm”

•Fragmentation of instruments

•Narrow definition of “innovation”

Explicit reference to Foundation for Technological

Innovation (FTI)

The “Knowledge Economy”:

•Knowledge = Basic form of Capital

•Economic growth driven by Innovation (Technological)

1996 2000 2002 2004 20082007 2009/10 2010/11 2012/13

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NIPMO: the implementing office of the NIPMO: the implementing office of the IPR ActIPR Act

POLICY EVOLUTION…

• South Africa is not the first in this regard:

– USA: Bayh-Dole Act (1980)

– Japan: Technology Licensing Organisations (1998...)

– Germany: Law on University Employees’ Inventions (2002)

– Taiwan: Science & Technology Basic Law (1999)

– UK: IP Ownership Decentralisation Efforts (1980’s)

– Korea: Technology Transfer Promotion Act (2000)

– Brazil: Innovation Law (2005)

– Philippines: Technology Transfer Act 2010

– South Africa: IPR Act (2010)

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NIPMO: the implementing office of the NIPMO: the implementing office of the IPR ActIPR Act

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• Specialised Service Delivery Unit (SSDU) on 13 December

2013.

• Head of the unit has powers conferred by legislation.

• Rely on DST for all corporate and other support services.

NIPMO: the implementing office of the NIPMO: the implementing office of the IPR ActIPR Act

• OTT capacity building

• Sector networking and partnership development

• Advocacy, Education & Learning

• IP legal advice to stakeholders and third parties

• Disclosure and compliance

• IP transaction review for approval

• Enforcement of IP rights of government

• Register of IP emanating from publicly financed R&D created by all recipients

• Grants for IP Protection Costs (IP Fund)

• Incentives for IP Creators

• Financial support to promote objects of IPR Act (e.g. IP tools, enforcement fund)

Advisory & SupportAdvisory & SupportRegulatory & Compliance

Regulatory & Compliance

FundManagement

FundManagement

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NIPMO: the implementing office of the NIPMO: the implementing office of the IPR ActIPR Act

• NIPMO functions in a regulatory and an enabling capacity to

execute the IPR Act mandate through three (3) directorates,

operating under the Head, with twelve (12) permanent employees:

To be appointed

OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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Purpose of the IPR Act:

• Provide for more effective utilisation of IP emanating from

publicly financed R&D.

• Establish NIPMO & the IP Fund.

• Provide for the establishment of Offices of Technology Transfer

(OTT’s) at institutions.

Legislative mandate…Legislative mandate…

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Objects of the IPR Act:

• IP emanating from publicly financed R&D is 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.

• Human ingenuity and creativity must be acknowledged and

rewarded.

• Small enterprises & BBBEE entities

have preferential access.

Legislative mandate…Legislative mandate…

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Application of the IPR Act:

• The IPR Act applies to all “recipients” of public funding, received

from a funding agency, whom use these funds to conduct R&D.

• Recipients thus include

− higher education institutions (26);

− science councils, and

− SOEs, private individuals, companies who receive public funds.

• Funding agency is the “State, organ of state

or state agency that funds R&D”.

Legislative mandate…Legislative mandate…

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Application of the IPR Act (cont.):

• The IPR Act was promulgated on 22 December 2008 and put into

operation on 2 August 2010 with the publication of Proclamation for

its commencement.

• A presumption against retrospectivity exists.

• Thus the IPR Act applies to “all IP emanating from publicly financed

R&D”, which R&D must have been conducted on or after 2 August

2010.

Legislative mandate…Legislative mandate…

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KEY ASPECT BEFORE IPR ACT CHANGES THE IPR ACT BROUGHT ABOUT

IP ownership Decided upon contractually. Thus government or any local or international private could own the IP, the generated IP being subsidized by the taxpayers purse.

IP ownership is legislatively prescribed. There are three ownership scenario’s but in essence he/ she who creates shall own. Thus the recipient, who undertakes the R&D, owns any IP emanating there from.

Commercialise/ Utilise the IP

R&D outcomes largely ended up in publications in scientific journals.

Recipients are the default owners of the IP but now have the concomitant obligation to commercialise/utilise IP emanating from publicly financed R&D for the benefit of society. Publishing and obtaining statutory protection for IP are not mutually exclusive activities.

…and changes the legislation brought about

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…and changes the legislation brought about

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KEY ASPECT BEFORE IPR ACT CHANGES THE IPR ACT BROUGHT ABOUT

Database of all publicly financed IP and a regulation of a number of transactions

IP emanating from publicly financed R&D could be assigned offshore or locally and thus public funds could subsidise that the public may not see the benefit of

Approval/reporting requirements are set in place i.e. any assignment of IP now requires NIPMO approval, which approval may only be issued once certain requirements are met which include that the assignment is in the interest of the public. Recipients who have created IP using public funds following R&D, must report to NIPMO biannually. A database indicating the pipeline of publicly financed IP now exists for the first time.

State access rights to the IP

Access rights to an invention for which a patent has been granted exist under the compulsory licence provisions in the Patents Act. This provision is enacted through an application to a High Court.

State rights to the IP are legislated and are applicable to all forms of IP which emanate from publicly financed R&D.

In practice…In practice…

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Basic research

Proof ofconcept

Technical development /

commercialplanning

Product &business

development

Businessstart-up

Business growth

IdeaGeneration

IP Office e.g. CIPC

NIPMO

Public Sector Support

Offices of Technology Transfer (OTTs)

Private SectorSupport

R&D is conducted

and IP created

OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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Pipeline of publicly

financed IP:

961 disclosures

Of which are

Active

897 disclosures

Of which have a

granted IP right

89 disclosures

Of which have been

commercialised

42 disclosures

Revenue received by institutions from commercialised IP

R2 921 719

OTT Support funding

to date

R64 254 442

No. of institutions who

have received support

21 institutions and 2

regional offices

No. of highly specialized

technology transfer posts

created

66 posts

IP Fund funding to date

R61 642 363

No. of institutions who have received

support

24 institutions

NIPMO activities and services including impact to date

A breakdown of the number of disclosures received reveals that the majority are inventions/ patents as set out below:

NIPMO activities and services

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A breakdown of the number of disclosures received per institution are set out below:

NIPMO activities and services

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Informal:

• WIPO Summer School on IP and TT – 295 individuals (60:40 split for local and international attendees),

• Workshops - over 500 individuals trained in IP management and technology transfer (including TISC).

For researchers:

• IPWiseTM Initiative

• In excess of 500 researchers and TT professionals trained in IP awareness; role of the IPR Act; and the commercialisation process.

Professionalisation: SLP and PGD in IP Management & Innovation.

NIPMO activities and services

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OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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IP as a tool for economic growth

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Generate revenue and create jobs, an international perspective:

• “Bayh-Dole Act is working”

82 institutions have reported net product sales of $36.8 billion with

start up companies providing work for 15 741 individuals

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Generate revenue and create jobs, an international

perspective:

IP as a tool for economic growth

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IP as a tool for economic growth

Initial Economic modelling activities have revealed:

• Assumptions:

− International benchmark is that the income from IP accruing to the

institutions makes up ~5% of the total value derived thus 95% accrued in

society with a 50:50 split to financial returns (with a further 75% certainty)

and socio-economic returns;

− 3% of the total portfolio will be commercialised for the first time each new

year; and

− An 8% discounted growth rate.

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IP as a tool for economic growth

Therefore initial economic modelling activities have revealed:

• ~R37m may accrue to institutions over the next 5 years

• Society may benefit in two possible ways:

– 50% will be socio-economic and other returns through deployment of the

technologies e.g. improving quality of life, improving health, environmental

sustainability, energy security; and/or

– 50% will be financial returns, this translates to income of at least R260m to

industry.

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SmartSpotQuality (Pty) Ltd:

Problem: TB affects 35 million globally. Implementation of the

GeneXpert diagnostic machine meant diagnosis occurs outside the

lab, however, no means for testing the accuracy of the machine.

Solution: Wits University and the NHLS developed TBCheck. The

TBCheck spots are used prior to testing the person’s specimen to

ensure the machine is working correctly.

IP: TBCheck is a patented technology

(ZA, US); spin-out registered.

Impact: Saved 78 000 test results from

being inaccurate. The TBCheck spot cards are currently

shipped to more than 20 countries globally.

IP as a tool for economic growth: Gauteng

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IP as a tool for economic growth: Limpopo

A method of in vitro propagation of Strelitzia:

Problem: No successful mass propagation of some Strelitzia

species such as the popular S. reginae, has been achieved by

tissue culture.

Solution: Researchers at University of Limpopo optimized the in

vitro culture conditions to minimise oxidative browning.

IP: Patent Applications filed in SA, ARIPO, AUS, IN and Europe.

Impact: The method identified is commercially viable and allows for

rapid mass propagation of Strelitzia.

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IP as a tool for economic growth: Free State

3D printing/ additive manufacturing:

Problem: Individuals and SMMEs do not always have

access to technology providers at an affordable cost.

Solution: Technology stations like the one at CUT which has

established a Centre for Rapid Prototyping and Manufacturing.

IP: Aesthetic and functional designs

Impact: Reconstructive surgery of state patients who do not have

access to medical aid funds, and who suffer from severe facial

disfigurement due to cancer and accidents are receiving

reconstructed limbs, facial features etc.

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IP as a tool for economic growth: Eastern Cape

Industrialisation of Iqhilika (Makana Meadery):

Problem: The Xhosa people have been making the alcoholic

beverage, Iqhilika, from fermenting honey for more than 2000 years

but there was no method to upscale this production for market-

demand.

Solution: Rhodes’ University developed a continuous reactor for

the fermentation of honey.

IP: A South African patent has been granted.

Impact: A spin-out company was created employing 12 individuals

and 380 people have been trained as bee-keepers. Markets are

established in Switzerland, USA and South America.

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IP as a tool for economic growth: Western Cape

Lumkani fire detector:

Problem: Informal settlements are prone to rampant shack fires.

Solution: University of Cape Town developed a low cost fire-

detection device which is coupled with a radio-frequency alert

service.

IP: Provisional patent protection filed for and copyright protected in

the form of software

Impact: Safety, financial security,

and quality of life. Company is a

virtual organisation with UCT but

will be spun out into a company in due course.

OverviewOverview

1. IP, Innovation and the NDP

2. What is IP and IPR?

3. NIPMO, the implementing office of the IPR Act

4. Legislative mandate and changes the legislation brought about

5. NIPMO activities and services including impact to date

6. IP as a tool for economic growth and the role of the provinces

7. Challenges in executing the IPR Act mandate

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• Resources: financial and human constraints internally within NIPMO.

• Awareness and hence compliance.

• Support from senior management (senate, executive etc) in government and in the higher education institutions and science councils for this third stream mandate.

• Availability of entrepreneurs to take the

technology to the market.

• Derisk funding and legal/administative

support during new company set up.

Challenges in executing the IPR Act Challenges in executing the IPR Act mandatemandate

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Siyathokoza Re a leboga

Dankie Ro livhuwa Thank youSiyabonga

EnkosiHa khensa

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