The Department of Science and Technology’s Special Service Delivery Unit, the National Intellectual Property Management Office, briefed the Portfolio Committee on progress in implementing the Intellectual Property Rights Act and National Intellectual Property Management Office.
The presentation gave an outline of the establishment of the Office and highlighted the significance of intellectual property and the Intellectual Property Rights Act.
The presentation further placed a great deal of emphasis on the legislative mandate and the changes that the legislation brought about. These changes affected five key areas, being Intellectual Property ownership, commercialisation and utilisation of the Intellectual Property, creation of a database of all publicly financed Intellectual Property, state access rights to the Intellectual Property, as well as Offices of Technology Transfers.
The use of Intellectual Property as a tool for development was further stressed, as the importance of incorporating the impact element through using Intellectual Property as a tool for economic development, instead of money making tool was raised. The use of Intellectual Property as a development tool in the Gauteng, Limpopo, Free State, Eastern Cape and Western Cape provinces was then addressed to reveal how Intellectual Property had helped create solutions to a number of local problems, including health and safety.
Committee Members were impressed by the information afforded to them by the National Intellectual Property Management Office, and particularly commended them on their passion. A central concern amongst Members was preventing the exploitation of young innovators from rural areas by large companies. The issue of the National Intellectual Property Management Office’s role in raising Intellectual Property awareness and in protecting innovators in rural areas was leading one. Yet another point of concern to members was the lack of support that young innovators were faced with. This was rooted from the fact that several South African innovators made breakthrough inventions, and were then recruited abroad and the country thus lost its talent to the international world.
The Chairperson expressed thanks to the Committee Members for the previous day’s events. He highlighted his views on how the media had failed to portray the importance of science and technology, which resulted in society not being aware of the fact that science was not only for scientists but had the ability to dynamically change lives.
Intellectual Property Rights Act and National Intellectual Property Management Office
Dr Kerry Faul, Head of NIPMO at DST, undertook the briefing. She explained that intellectual property was divided into two broad categories, the first being industrial design and the other being copyright. Associated with intellectual property, were the Intellectual property rights, which included patents for inventions, plant breeders’ rights for new plan varieties and trademarks.
Dr Faul gave a run down of where the concept of derisk (NIPMO) came from, explaining that the idea was identified in 2002 when a Research and Development Strategy was put forward by the Department of Arts, Culture, Science and Technology who had identified an ‘innovation chasm’- the need to convert research and development outputs into products, processes and services that reach the shelves. The piece of legislation for South Africa’s Intellectual Property Rights (IPR) Act came into effect in 2010.
NIPMO was established as a transition office towards a government component as a Specialised Service Delivery Unit (SSDU). It relied greatly on DST for all corporate and support services. This was formalised on 13 December 2013.
On the legislative mandate, the purpose of the IPR Act was to provide for more effective utilisation of IP that emanated from publicly financed Research and Development (R&D), to provide for the establishment of Offices of Technology Transfer (OTT’s), for the legislative establishment of an IP fund, as well as for the creation of NIPMO, which was the implementing office of this piece of legislation.
She further highlighted the objects of the IPR Act as
- IP emanating from publicly financed R&D was 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 and Broad-Based Black Economic Empowerment (BBBEE) entities had preferential access.
She further explained that the IPR Act applied to all recipients of public funding, received from a funding agency that uses the funds to conduct R&D. The funding agency may be the state or a state agency that funds R&D. Moreover, the piece of legislation applies to all intellectual property created after 2 August 2010.
Dr Faul explained the type of changes that the legislation brought about. She noted the five ways in which this piece of legislation had made a material impact on the way people operated previously.
- In terms of IP ownership, previously, government funds could be used to fund R&D and the funder could then claim ownership to everything through a contractual agreement. This new piece of legislation on the other hand offers three ownership possibilities, and holds the default position that “he who creates, will own”.
- With regards to commercialising and utilising the IP, R&D outcomes would end up in publications in scientific journals. As a result of the new legislation, the owners of the IP have an obligation to commercialise and utilise the IP for the benefit of society.
- Concerning the publicly financed IP, previously, IP emanating from publicly financed R&D could be assigned offshore, which thus meant that government was spending public funds on products that would not benefit people locally. The new IPR Act involves the use of a database that prevents such from occurring because NIPMO had been granted approval power in the assignment of all IPs, and one of the requirements that must be met for the approval was that the assignment must be in the interest of the public.
- Regarding state access to IP, previously, the state had to apply to the High Court to request access rights to a particular protected invention. As a result of new legislation, the state now had broader access rights to any IP through Presidential Proclamation in an emergency.
- On OTTs, previously, only key research institutions had OTTs. The new legislation states that every institution must have an OTT and they must have an approved IP policy.
On NIPMO’s activities and services, Dr Faul highlighted what NIPMO was doing to implement the legislation. She explained that the regulatory and compliance directorate managed a database of publicly financed IP and every six months, the recipients were mandated to report the status of their IP and the status of commercialisation to NIPMO. There were currently 1057 disclosures on NIPMO’s database, of which 932 of them were active, 190 have been granted IP rights and 74 of the disclosures had been commercialised. Of the 74 commercialised disclosures, 45 exclusive licenses had been given. Moreover, an OTT Support Fund was established to assist with the employment of individuals within the OTT. This fund supported 28 institutions and 2 regional offices. The last fund was the IP Fund that fell under the legislated mandate that aims to provide institutions with a rebate for IP prosecution and maintenance costs. 24 institutions were supported by this fund.
In further addressing the activities and services, Dr Faul revealed that NIPMO together with companies in the Intellectual Property Commission hosted a WIPO Summer School where over 330 individuals were trained on IP and technology transfer. Moreover, workshops were held where over 500 individuals were trained in IP management and technology transfer as well.
On NIPMO’s activities and services pipeline, there was currently a model to establish an IP enforcement fund, to broaden the IP creator incentives, and there was a partnership with the Department of Trade and Industry (DTI) that was aimed at remedying the demographic around patent attorney development.
Dr Faul highlighted the use of IP as a tool for development and explained that IP expanded from being a money making tool, to being a tool for economic development. She evidenced this with demonstrations of situations in the US, the UK, Europe and Australia that showed trends of IP being increasingly aimed towards public good instead of making money.
In using IP as a tool for development, generating revenue and creating jobs were critical.
In pointing out the use of IP for development within a number of provinces, Dr Faul addressed the situation in the Gauteng province, explaining that Wits University and the National Health Laboratory Services (NHLS) developed a patented technology called TBCheck, to address the problem concerning the verification of accuracy on the diagnostic machine. As a result of this technology, 78 000 test results were saved from being inaccurate.
In Limpopo, the problem at hand was that no successful mass propagation of some Strelitzia species had been achieved by tissue culture. Researchers at the University of Limpopo then optimised the ‘in vitro’ culture conditions to minimise oxidative browning. The impact of this method was that it was commercially viable and allowed for rapid mass propagation of the Strelitzia flower. Moreover, in the Free State, the problem was that individuals and Small, Medium and Micro-Sized Enterprises (SMME) lacked access to technology providers at affordable costs. The solution was the establishment of a Centre for Rapid Prototyping and Manufacturing by the Central Unit of Technology (CUT) technology station in Bloemfontein. It impacted by assisting in reconstructive surgeries of patients who suffer from severe facial disfigurement and had no access to medical aid funds.
Additionally, Rhodes University in the Eastern Cape developed a continuous reactor for the fermentation of honey to address the need to upscale honey production in order to meet demand. The invention has been granted a South African patent and the company was created and had established markets in Switzerland, USA and South America. In the Western Cape, the Lumkani fire detector was invented by the University of Cape Town to be used in informal settlements prone to rampant shack fires. The product had a provisional patent protection filed for and was copyrighted in the form of software.
In conclusion, Dr Faul indicated the challenges faced in executing the IPR Act mandate. She raised the challenge of resources, stating that there were financial and human constraints internally within NIPMO and within the sector. The human resource constraint was that the majority of individuals had less than 5 years’ experience.
Secondly, she mentioned that the Minister of Science and Technology offered NIPMO a great deal of support, however, there was lack of support from senior management in other government departments as well as from the executive in higher education institutions and science councils.
Moreover, the availability of entrepreneurs who took the technology to the market was vary limited, and regarding funding, she explained that derisk funding was needed for technology maturation and legal support during new company set up.
Lastly, she stressed that a key aim was to raise awareness.
The Chairperson said he was impressed to hear that the Department was not requesting additional funding. Universities played a crucial role in innovations, as these higher institutions were involved in the research and innovation. However, not much was being offered by the universities, which could be the reason for science and technology not heading in its intended direction. Moreover, the potential of science and technology was not known because people tended not to grasp its seriousness. The problem could further be that SA was a new democracy, and people’s focus was on leaving a legacy of their own behind, instead of working with others and risking the chance of ideas being claimed by others. People put their individual interests above the interests of the country. He asked the Department whether it would have been necessary to invite the Department of Trade and Industry (DTI) to the meeting, and for clarification regarding the Department’s connection with DTI. Regarding the health industry, he asked whether it was indeed true that pharmaceutical scientists and companies extended the validity period of their Intellectual Property Rights (IPR) by slightly modifying the medicine through adding a small molecule in order to extend the IPR by an additional twenty years to prevent generics from being made.
Mr N Paulsen (EFF) raised the point that Siyabulela Xusa, who build a rocket in his mother’s kitchen and was now at the Massachusetts Institute of Technology (MIT) was a case in point of the issue that South Africa did not hold onto and make use of talented individuals in the country. When needing to purchase a satellite, the decision was made to purchase a Russian satellite, as opposed of one that was locally developed at the University of the Western Cape, which showed the lack of appreciation there was for local talent and developments. There was need for a change in mind-sets of ordinary South Africans as well as government, because South Africans had the potential to create, and government needed to begin to appreciate that, else the country would continue to lose brilliant talent to the rest of the world. The work of the Department was imperative, and for that reason he was concerned that they captured their information about IPs on an Excel spreadsheet.
Moreover, there was a fantastic institution was affiliated to the Centre for Higher Performance Computing, which could assist with innovations locally, and thus solve the problem of money leaving the country and being spent on entities that developed abroad.
Mr Paulsen added that he had announced on Twitter that he would be attending the meeting with the Department, and people then raised a number of questions that they would like the Department to answer, so he would write the questions down to allow the presenters to provide him with a written, emailed response.
Mr Paulsen then revealed that he knew of an IP officer who was an attorney who was well qualified for his job, yet he did not have an easy time with dealing with the IP registration process. He asked whether the support the Department was providing to institutions was indeed making the process easier. In addition, he mentioned another individual who had an idea that needed to be made into reality and that it was taking a long time to secure the IP Rights. Mr Paulsen wanted to know what was the average time needed to complete the IP finalisation process. Many more people would want to register for IPs for their innovations, which would create more work for the Department. He thus wanted to know how the Department was streamlining the process to encourage locals to be more innovative.
On IP officers, he pointed out that there were no set qualifications that an IP officer needed, so there was a need to create a field of specialisation around the work and to encourage university students and equip them to deal with the IP registration process.
The Chairperson highlighted that a key driving force for the country should be putting our country before anything else; this was something that was taking too long to be realised.
Ms L Maseko (ANC) thanked the Department for their presentation and was impressed that the Department was satisfied with their finances. She went on to ask about cyber squatting and the Department’s cyber security, and what happens when the Department finds out that there has been a trademark infringement. She raised attention to slide 15 of the presentation, and asked about the legislative sector including Parliament, which has moved from just depending on the executive. She used the example of the Gauteng province and their 2006 creation of a Programme Evaluation and Budget Analysis that they struggled to get the copyright for because they were a public institution.
Moreover, in relation to what Dr Faul mentioned regarding new innovations and the principle that ‘he who creates must own’ she requested clarification on the copyright and trademark matter involving Bafana Bafana.
She in addition raised attention to the issue regarding the young man who designed the Moses Mabhida stadium and passed away before he could receive his recognition. She asked how young innovators such as this could be protected, in the case that they were in rural areas and thus were not exposed to the resources that offered them guidance on what do.
Furthermore, in the case of NIPMO’s activities and services, she wanted to know what the target and achieved percentages of the Department were.
On legal advice that NIPMO provided, Ms Maseko asked whether that came with a charge, and if so, whether NIPMO was charging market related rates for their services. In relation to charging, she asked whether the summer school and workshops that the Department presented and lectured at were charged for, or if they were free.
Lastly, she asked whether the name change of the Strelitzia flower to “Mandela’s Gold” needed to be patented.
The Chairperson commented on the concept of money, raising the point that it was important not to be driven by money to the point that money was chosen over the needs of the country.
Dr A Lotriet (DA) addressed the fact that NIPMO was a Special Service Delivery Unit (SSDU) within the DST, and asked how exactly NIPMO could not take another form as a result of the Act that was mentioned. She sought clarification on NIPMO’s relationship with the DTI in terms of IP; and requested that NIPMO’s website be updated, given that the last updated information was from 2013.
Ms J Terblanche (DA) enjoyed the presentation and particularly appreciated the use of examples. She proposed that Members carry out an oversight visit to see first-hand, what NIPMO was doing. She further pointed out that bees were currently facing extinction and wanted to know whether the same problem existed in the Eastern Cape, and what measures would be taken to ensure that the programme was not affected.
Furthermore, concerning the Lumkani fire detector, fires could be expected in the Western Cape in the winter season when fires were used to warm residents, and ended up spreading and creating mass shack fires. She thus requested an approximated timeframe for the launch of the project, as well as that the project be prioritised.
Additionally, in reference to what was said concerning the lack of support form other government departments and executives in higher education councils, she asked what avenues were taken to address the situation, and whether NIPMO engaged with the Minister of Science and Technology because she was able to address her colleagues at Cabinet with the matter.
The Chairperson commended the Department on the passion they had brought, and assured them that the Committee, acting as public representatives, would ensure that awareness was brought to NIPMO’s work across various communities.
Dr Faul responded that their relationship with the Companies and Intellectual Properties Commission was a formal one and they worked together and supported one another spreading awareness in awareness initiatives such as the summer school programme. They were engaging together with the Department of Basic Education in attempts to introduce Intellectual property to school curriculums. The relationship with DTI on the other hand was based on engagements that complemented each other’s activities and was less formal and saw NIPMO being involved in DTI’s various committees.
On regard to pharmaceutical companies, they received patent protection for a newly developed compound only if it met the requirements of novelty, inventiveness and industrial application. It was often the case that pharmaceutical companies found that, by adding a certain small molecule, the compound would be better digested in the human digestive system, and the company thus sought patent protection for the modified product. Patent protection was only provided if the requirements were met and compound was proven to be more effective.
On the issue of funding, Dr Faul clarified that NIPMO was in a position where they were would accept more money so that their efforts had greater impact. They were considering getting a trading account in order to get access to funds. More entrepreneurs were needed, and they need to be assisted by local government procurement, and the DTI’s policy on local procurement was anticipated to have a critical impact.
Very specific work needed to be done for NIPMO and they were unable to find anyone locally in the private sector to assist, which was why they explored the international market and found that there were already developed international solutions for them. It was unfortunate that they would have to pay licensing fees offshore, but delighted at the fact that they would be developing local capacities to implement and roll it out.
Ms Jetane Weyers, NIPMO’s Director of Regulatory and Compliance, added that in efforts to procure locally, NIPMO had been in contact with the National Research Foundation, who were currently using the Research and Innovation Management (RIM) System. It was found that the RIM System even with adaptations, would not be suitable to assist NIPMO with their specific needs for their technology transfer, and the decision to procure externally was then taken.
On the database, Ms Weyers confirmed that they indeed backed up their information on various forms. She further explained that the IP database was a confidential database that could not be made available to the public because of the sensitive nature of intellectual property. NIPMO currently did not have target percentages because they were trying to get a baseline however; they were encouraged with the percentages achieved. In comparison to international standards, South Africa was on par with international percentages, and this was something to be impressed about, given that NIPMO’s legislation had only been in place for five years.
On commercialisation and utilisation of intellectual property, South Africa currently stood at 7%, while international trends varied between 5-15%, and ultimately, it was encouraging to see what NIPMO had achieved in a short period of time.
Dr Faul then explained, on providing support to institutions and making the process easier for them, DIPMO hosted a short learning programme and a professionalisation course and provided a bursary to ensure that all new appointees do the course on IP management and innovation through the University of South Africa UNISA. Workshops were held to provide hands-on IP management and patent search training, so as to improve their ability to perform IP management. She added that NIPMO worked closely with the South African Research and Innovation Management Association (SARIMA) as well as the Licensing Executive Society of South Africa who also host a number of workshops, and their primary aim was to equip appointees with experience on the ground, which counts highly in ensuring optimal performance.
Ms Paballo Phiri, NIPMO’s Director of Funds and Incentives, added that within most small universities, there was a great lack of resources such as skills capacity and training, and explained that NIPMO was attempting to put these small institutions on par with bigger universities such as the University of Cape Town (UCT). It was for this reason that she thought not to make money available immediately in terms of the enforcement fund, but rather to observe how these institutions managed the IP. The greatest challenges faced were that there were inadequate skills within the institutions, and that the institutions were not delivering when it came to capacitating their own people. There were IP Wise workshops conducted with WIPO and a number of law firms which assisted NIPMO in capacitating their staff and in raising awareness. Attention was given to Small and Medium-sized Enterprises (SMMEs) and “the man on the street” and there were hopes to gain the capacity to be able to provide them with assistance in the form of funding and guiding in the long-term. There was room for improving and expanding NIPMO’s scope from only targeting Higher Institutions of Learning and Science Councils, to becoming more accessible to smaller innovators who might not know who to approach.
Dr Faul explained that technology played a role in determining the time taken between the registration phase to the granting of rights. South Africa’s current system was a formal depository system, however, it was moving towards a substantive examination system and with that said, it currently took on average, 30 months to be granted a right. In any other jurisdiction where there was examination, it could take anywhere between 3-10 years, thus there was no set timeframe for the process.
On accessible the model was to “the man on the street”, the South African patent system was not used as efficiently as it could be by local innovators because of the fact that a patent attorney had to be employed in order for a complete application to be filed. For the fact that this process was costly, patent attorneys were obligated to provide their services pro bono, even though this could not be the case at all times.
She further mentioned that NIPMO had a technology transfer framework model document and manual that gave an overview of the requirements, each depending to the particular research output of the institution.
Dr Faul explained that cyber squatting and cyber security matters relating to trademarks falls outside of NIPMO’s mandate, and that the management of that kind would depend on the Offices of Technical Transfer (OTT) who would be able to engage with the Departments of Trade and Industry and Justice for support, because this matter falls under their mandates.
Dr Faul admitted to not being familiar with the oversight model around the legislative governance model being investigated in Gauteng, however, she assured members that she would look into the matter.
When it came to research and development activities, the principle “he who creates would own” applied, however, when a trademark did not result from a research and development activity, a problem arose, because anyone then had the power to register it.
Ms Phiri addressed the matter involving the Moses Mabhida stadium, and explained that a young boy’s design of the stadium won a competition, and ultimately, his design was used. Allegedly, the engineers involved in the building of the stadium requested clarification on the young boy’s original plan for the top of the stadium, however, upon visiting the boy’s home, they learnt that he had passed on. The crux of the matter, as Ms Phiri explained, was that the boy’s parents requested that their son be acknowledged for his innovation.
Dr Faul said NIPMO did not have a regional presence, however they had begun investigations on regional models and considered further options that would assist in making IP awareness available to “the man on the street”. NIPMO had been working with the National Indigenous Knowledge Systems Office (NIKSO) to find communities with indigenous knowledge and to use their indigenous knowledge in contracts with commercial companies. Despite NIPMO’s lack in rural and regional presence, they could in this way ensure that innovative individuals were protected and not exploited by big companies.
Ms. Weyers stated that NIPMO was very conscious of the legal fraternity and thus only gave legal opinions that related to the IPR Act and the extent to which the Act impacted the legal questions. NIPMO were non-practising lawyers and only provided an interpretation of their legislation because they were not allowed to provide legal opinions on matters that clients might act on. It was for this reason that they were careful about charging for legal advice. Moreover, NIPMO recently initiated a process to amend the legislation, and all the queries being received assisted in informing the amendment to the IPR Act.
On the presentations that NIPMO delivers, the intention was to inform people about the IPR Act, and these were usually presented at workshops where people did not have to pay for attendance. If invited to workshops where people had to pay excessive amounts to attend, NIPMO tended to decline the request, as they had a preference for workshops that were free and accessible to the public.
In conclusion, Dr Faul addressed the remaining issues, explaining that the WIPO summer school was charged for and that the money received from that went back to WIPO.
On the Strelitzia flower, “Mandela’s Gold” name was the registered trademark.
NIPMO’s legislation was phrased to say that NIPMO would either be set up as an office within the DST, or its functions would be signed to another entity with a function consistent to theirs. This was however too limiting to allow a government component, and thus an amendment of the legislation was necessary to allow for a government component. NIPMO, as an SSDU would be incorporated into the DST’s website, and the reason for their website being outdated was because all their content was currently being transferred to the DST’s website.
Dr Faul was not aware of how the bee situation was affecting the project in Grahamstown, but assured Members that the information was attainable.
The Lumkani fire detectors were already being manufactured.
Lastly, she mentioned that The Minister of Science and Technology was approached to speak at a forum with all the Vice Chancellors about the issues they had brought to her attention.
The Chairperson thanked the presenter for the interesting knowledge afforded the Committee; Members would be sharing that information with their constituencies. He further commended them on their passion.
The meeting was adjourned.
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