Intellectual Property Rights from Publicly Financed Research and Development Act (Act 51 of 2008) Presentation to Portfolio Committee on Science and Technology.

Intellectual Property Rights from Publicly Intellectual Property Rights from Publicly Financed Research and Development Act (Act 51 Financed Research and Development Act (Act 51

of 2008)of 2008)

Presentation to Portfolio Committee on Presentation to Portfolio Committee on Science and TechnologyScience and Technology

Jonathan S. Youngleson

7 November 2012

OutlineOutline

1. Background

2. Rationale for NIPMO – Challenges in the NSI

3. NIPMO Interim Office

4. IPR-PFRD Act / NIPMO Impact to Date

5. NIPMO - SSDU Proposal

6. Discussion …

29 October 2012NIPMO - Presentation to Portfolio Committee Page 2

Background Background National System of Innovation Policy EvolutionNational System of Innovation Policy Evolution


1996 2000 2002 2004 20082007 2009/10 2010/11

Science & Technology White Paper

Science & Technology White Paper

Technology Foresight Studies

Technology Foresight Studies

R&DStrategy

R&DStrategy

Creation of DST

Creation of DST

OECD ReviewOECD

Review

IPR-PFRD Policy

IPR-PFRD Policy

10 Year Innovation Plan

10 Year Innovation Plan

IPR-PFRD IPR-PFRD ActAct

IPR-PFRD IPR-PFRD ActAct

TIA Act

TIA 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)

BackgroundBackgroundIPR-PFRD Act & NIPMO & IP Fund EstablishmentIPR-PFRD Act & NIPMO & IP Fund Establishment

DST promulgated the Intellectual Property Rights from Publicly Financed Research and Development Act, (Act 51 of 2008) (IPR-PFRD Act).

Act and Regulations came into effect on 2 August 2010 - established NIPMO and the IP Fund

Act provides for establishment of the NIPMO - Section 8 reads:

“8. (1) There is hereby established an office within the Department, called the National Intellectual Property Management Office (NIPMO).

(2) The Minister may, by notice in the Gazette, assign the operation of NIPMO to any public entity whose objects are consistent with NIPMO's functions.”

Section 9 of the Act sets out NIPMO’s functions:

Co-ordination of the establishment of Offices of Technology Transfer (OTT’s) at Institutions that conduct R&D with public funds.

Capacity development programmes in IP & TT to provide skilled personnel within the OTT’s.

Provision of financial assistance in the form of incentives to recipients and their IP creators, to reward them for proactively securing protection for I P and commercialising it and, for generally promoting innovation.

NIPMO manages IP Fund, operating on a rebate system designed to support statutory IP protection & maintenance of IP Rights in Institutions. Also, to finance NIPMO statutory protection costs for IP disclosed to NIPMO or of which NIPMO assumes assignment on behalf of the State.


OutlineOutline

1. Background



4. IPR-PFRD / NIPMO Impact to Date

5. NIPMO SSDU Proposals

6. Discussion …


Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSI

Underlying the IPR-PFRD Act and establishment of NIPMO are broader government concerns with respect to the functioning of the National System Innovation (NSI) …

Despite significant and growing government spend on R&D …

– Some R6,4-billion in 2008/09, including

– DST annual budget of R4,5-billion – 90% directed to public institutions for R&D

Current socio-economic returns to South Africa from this R&D are limited …

– 5% of SA Patents in USA and Europe are from public research institutions / IP is being lost to foreign jurisdictions

– Little accountability in public sector institutions

– Predominant focus on publications (underpinned by current R&D incentives)

– Limited utilisation and commercialisation of R&D outputs for public benefit

– Undefined socio-economic benefit / impacts


7

Table 1.6: R & D EXPENDITURE BY SOURCE OF FUNDS National R&D Survey 2008/09

SOURCE OF FUNDS BUSINESS ENTERPRISE GOVERNMENT HIGHER EDUCATION NOT-FOR-PROFIT SCIENCE COUNCILS TOTALR'000 % R'000 % R'000 % R'000 %R'000 % R'000 %

Own Funds R 8 130 033 65.9 R 742 954 65.2 R 1 983 683 47.3 R 9 650 4.0 R 381 137 12.1 R 11 247 457 53.5

Internal Resources R 8 130 033 65.9 R 742 954 65.2 R 1 983 683 47.3 R 9 650 4.0 R 381 137 12.1 R 11 247 457 53.5

Government R 2 567 140 20.8 R 325 573 28.6 R 1 242 991 29.7 R 32 711 13.6 R 2 221 321 70.8 R 6 389 736 30.4

Grants R 1 979 423 16.1 R 323 932 28.4 N/A N/A R 21 724 9.0 R 1 316 975 42 R 3 642 054 17.3

Contracts R 587 717 4.8 R 1 641 0.1 N/A N/A R 10 987 4.6 R 904 346 28.8 R 1 504 691 7.2

All government, research agencies, agency funding and science councils

N/A N/A N/A N/A R 1 242 991 29.7 N/A N/A N/A N/A R 1 242 991 5.9

Business R 209 346 1.7 R 15 980 1.4 R 454 184 10.8 R 26 591 11 R 137 356 4.4 R 843 457 4.0

Local Business R 209 346 1.7 R 15 980 1.4 R 454 184 10.8 R 26 591 11.0 R 137 356 4.4 R 843 457 4.0

Other South African sources

R 29 460 0.2 R 1 821 0.2 R 100 470 2.4 R 28 297 11.8 R 5 521 0.2 R 165 569 0.8

Higher Education R 2 120 0 R 86 0 R 16 704 0.4 R 3 442 1.4 R 677 0 R 23 029 0.1

Not for profit organisations

R 19 160 0.2 R 278 0 R 36 593 0.9 R 19 473 8.1 R 2 463 0.1 R 77 967 0.4

Individual donations R 8 180 0.1 R 1 457 0.1 R 47 173 1.1 R 5 382 2.2 R 2 381 0.1 R 64 573 0.3

Foreign R 1 396 033 11.3 R 53 348 4.7 R 410 038 9.8 R 143 400 59.6 R 392 008 12.5 R 2 394 827 11.4

Parent Company R 566 111 4.6 N/A N/A N/A N/A N/A N/A N/A N/A R 566 111 2.7

Foundations R 7 015 0.1 N/A N/A N/A N/A N/A N/A N/A N/A R 7 015 0

All sources R 822 907 6.7 R 53 348 4.7 R 410 038 9.8 R 143 400 59.6 R 392 008 12.5 R 1 821 701 8.7

Total R 12 332 012 100 R 1 139 676 100 R 4 191 366 100 R 240 649 100 R 3 137 343 100 R 21 041 046 100

Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSI


Underlying the IPR-PFRD Act and the establishment of NIPMO are broader government concerns with respect to the functioning of the National System Innovation (NSI) …Underlying the IPR-PFRD Act and the establishment of NIPMO are broader government concerns with respect to the functioning of the National System Innovation (NSI) …

Despite significant and growing government spend on R&D …Despite significant and growing government spend on R&D …

… SA Government R&D Funding 2008/09 – R6,4-bn …… SA Government R&D Funding 2008/09 – R6,4-bn …

Growth in Subsidised R&D OutputsGrowth in Subsidised R&D Outputs


Total permanent academic staff:

1996 - 13,449

2010 - 16,684

Subsidised research outputs of the public higher education system: 2000 - 2010

9,748

4,647

8,0748,086

6,660

5,602 5,476

3,7233,8573,421

3,1812,728

1,4211,1821,1001,104969961

0

2000

4000

6000

8000

10000

12000

2000 2002 2004 2006 2008 2010

Publication units Research masters graduates Doctoral graduates

Growing Research OutputsAvg. Growth p.a.: Publications – 15% pa; Masters – 14% pa; Doctoral – 10% pa

Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSIIP Outputs Vs FundingIP Outputs Vs Funding

while R&D subsidies (specifically DHET)

have increased significantly and research outputs

have shown growth over the last decade

…

29 October 2012Page 10

Source: CHET – March 2012 and NACI 2010, South African Science and Technology Indicators

… IP output growth has not

been commensurate …

NIPMO - Presentation to Portfolio Committee

Government research funding allocations by output category & financial year: (Rm)

1,225

845919

1,024

1,2371,245

1,540

1,837

2,225

1,048

796

652596

474 505489461

414379310343

265228192

539

3753652822982532021790

500

1,000

1,500

2,000

2,500

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Publications units Research masters grads Doctoral graduates TOTAL

Significant Research Subsidy Funding Allocation: Annual Average Growth: 23 % p.a.

Growth in SA publication output as % of WorldGrowth in SA publication output as % of WorldISI indexed outputISI indexed output


Growing SA World Share ISI PublicationsGrowth: 1995: 0.3% to 2009: 0.6%

Key concerns ….

•5% of SA Patents in USA and Europe are from public research institutions

•IP is being lost to foreign jurisdictions

•Little accountability in public sector institutions

•Predominant focus on publications (underpinned by current incentives)

•Limited utilisation and commercialisation

•Undefined socio-economic benefit

Key concerns ….

•5% of SA Patents in USA and Europe are from public research institutions

•IP is being lost to foreign jurisdictions

•Little accountability in public sector institutions

•Predominant focus on publications (underpinned by current incentives)

•Limited utilisation and commercialisation

•Undefined socio-economic benefit

Rationale for NIPMO – Challenges in the NSI Rationale for NIPMO – Challenges in the NSI SA Patent SA Patent Filings in USA, EU, & PCTFilings in USA, EU, & PCT


The Patent Cooperation Treaty (PCT) is an international patent law treaty, concluded in 1970, provides a unified procedure for filing patent applications to protect inventions in

each of its contracting states. A patent application filed under the PCT is called an international application, or PCT application.

Rationale for NIPMORationale for NIPMOChallenges in the NSI Royalties BoPChallenges in the NSI Royalties BoP


Source www.wipo.int

Balance of Payments on Royalties Account - 2008

US$100,000,000

US$53,700,000

US$2,000,000,000

US$1,000,000,000

Payments

Receipts

US$1,676,000,000

US$100,000,000

2007 2008Payments $1 596 250 885 $1 675 904 016Receipts $52 913 601 $53 737 885

$1 543 337 284 $1 622 166 131

Trade Deficit: ~ R12-bn p.a.

Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSIIP is Central to Knowledge Economy & Economic GrowthIP is Central to Knowledge Economy & Economic Growth


Underpinning Intangible Assert Value = Intellectual Property …

Adapted from: Sullivan & Sullivan, 2000, J. Intellectual Capital V. 1 (4)

Intangible Asset Value - central to the Knowledge Economy …

1980’s - corporate book value was shrinking in relation to market value - the residual, regarded as capital markets view of the value of a corporation’s intangible (intellectual) assets, was rising.

Average S&P 500 company: between 1978 - 1998 the value of intangibles increased from 20% to 80% of market value, and book value decreased from 80% to 20% (Margaret Blair, 1999)

1990’s - USA annual investment in intangible assets was US$1.0-trillion - e.g. in IP (R&D, business processes/software, branding, employee training, etc.) approx. equal to investment in physical assets - US$1.2-trillion (Nakamura, 2003)

Knowledge economy & its impact on economic growth (Nakamura, 2009), intangible investments, particularly those that enable enterprises to innovate, bring in returns significantly higher than costs of capital, & returns on fixed asset investments, even in traditional industries such as the chemical industry

Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSIStrategic Creation & Management of Intangible Asset ValueStrategic Creation & Management of Intangible Asset Value


IdeasCreativity & Invention

Research & Post Graduate Studies

Innovation & Technology

Transfer

Utilisation & Commercialisation

Masters & DoctoratesConferences

Research Publications

Blue SkiesOriginal ThoughtsProblem Solving

Youth & Enthusiasm

PatentsTrademarks

Industrial DesignSkilled Personnel

EntrepreneurshipWealth CreationJobs Creation

CompetitivenessTaxes

Original Thoughts

Research FacilitiesLaboratories

Libraries

OTT’sInvention Disclosure

Evaluation & SelectionProtection

Licensing/Assignment

BusinessesFactoriesStores & Offices

Un

ive

rsiti

es

& S

cie

nce

Co

un

cils

Go

vern

me

nt

& P

ara

sta

tals

Bu

sin

ess

& C

ivil

So

cie

ty

Technology Push

Market PullTriple Helix

NIP

MO

Social Benefit

NR

F

TH

RIP

TIA

/SP

II/I

DC

Resources

NetworksInfrastructure Outcomes

NIPMO’s vision for the NIPMO’s vision for the National System of InnovationNational System of Innovation

Peer-reviewed system of evaluation (and possible selection) of Projects, Principle Investigators, Units & Institutions:

- Innovator and Institutional rating (National innovation index)

- Recognition & rewards, alternate career path development

- Meeting market needs (pull) by conversion of ideas to Innovations

- More efficient use of public R&D resources

- Contribution to public benefit

- Strengthening Research, Development & Innovation Networks

- Building the ‘Triple Helix’ between Industry, Higher Education and Government

Is this a future for public RD&I for better utilisation of public resources in the Knowledge Economy?


Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSINIPMO's Role in the Innovation Value ChainNIPMO's Role in the Innovation Value Chain


Basic research

Universities

Proof ofconcept

Technical development /

Commercialplanning

Product &business

development

Businessstart-up

(S&TBased)

Business growth

IdeaGeneration

Science Councils

TIA Support

Phase 1

Phase 2

Phase 3

ExpansionEarlyexpansionStart-up

Seed

Industry

Source: Technology Commercialisation (WaikatoLink, modified NIPMO - 29 June 2012)

NIPMO : OTT’s / IP Generation & Management

Rationale for NIPMO – Challenges in the NSIRationale for NIPMO – Challenges in the NSIRequirements for Growth in the Knowledge EconomyRequirements for Growth in the Knowledge Economy


Research & Development

Research Outputs

Masters Doctorates

Applied Outputs

New products / services

New businesses

Publications Other …Intellectual Property

Outputs

∕∕

2000 - 2010R&D 1% of GDP2010/11: DST Budget R 4.5 bn2008/09: R6,4 bn public spend2010: R 2,225 bn DHET subsidy

2000 - 2010Masters 46%

Doctorates 48%Peer-reviewed

publications 64%

2000 - 2010USPO filings 100 to120 per year - steady

EPO filings 100 to120 per year - steady

WIPO PCT filings 400 to 300 per year

Notably there is no consolidated data available viz applied outputs

from publicly funded R&D

?

Very Poor Poor Moderate Good Excellent

2000 - 2010 Only 5% of SA IP

outputs (triadic) derived from HEI’s

and Science Councils

Sources: Source: CHET, High Level Knowledge Production: Analysis of Inputs and Outputs (March 2012); NACI 2010, DST R&D Surveys; WIPO – Harnessing the Benefits of Publicly-Funded Research (June 2012)

OutlineOutline

1. Background


3. Government Response - NIPMO Interim Office



6. Discussion …


NIPMO Interim OfficeNIPMO Interim OfficeIPR-PFRD Act & NIPMO Establishment ProcessIPR-PFRD Act & NIPMO Establishment Process

In the 2011/12 financial year, an NIPMO interim office was established and incubated at the DST to deliver on the objects of the IPR PFRD Act and to monitor its implementation.


IPR-PFRD Act, No. 51 of 2008

Regulations

Development of NIPMO Business Case

EXCO approval of NIPMO Interim Office

Proclamation of IPR Act (2 Aug, 2010)

Establish NIPMO Interim Office

National R&D Strategy (2002)

IPR Policy Framework (2007)

Public Consultation

process: August 2008 onwards

NIPMO Establishment

and Operations: August 2010 –

to date

Policy Development

and Legislation: 2002 - 2008

Establish NIPMO as SSDU (April 2013)

NIPMO Interim Office NIPMO Interim Office NIPMO Legislated MandateNIPMO Legislated Mandate

Purpose of the IPR-PFRD Act 51, 2008:

To provide for more effective utilisation of IP emanating from publicly financed R&D;

To establish the National Intellectual Property Office (NIPMO) and the Intellectual Property Fund (IPF);

To provide for the establishment of Offices of Technology Transfer (OTT’s) at Institutions; and

To provide for matters connected therewith.

Object of the IPR-PFRD Act:

Make provision that IP emanating from publicly financed R&D is identified, (evaluated), protected, utilised and commercialised for the benefit of the people of the Republic, whether for social, economic, military or any other benefit.

A recipient of public R&D funding, must assess, record, and report on the benefit for society.

Human ingenuity and creativity must be acknowledged and rewarded.

SME’s & BBBEE entities have preferential access.

Definitions of the IPR-PFRD Act:

Intellectual Property: is “any creation of the mind that is capable of being protected by law from use by any other person …” (but excludes copyrighted works … of an academic nature)

Publicly Financed R&D: is “R&D undertaken using any funds allocated by a funding agency but excludes funds allocated for scholarships and bursaries” and

Funding Agency: is “the State or an organ of state or a state agency that funds R&D” Institutions: Higher Education Institutions (23) & Statutory Research Councils (10), other (by Minister)


NIPMO Interim OfficeNIPMO Interim OfficeFunctionsFunctions

Promote the objects of the Act – including statutory protection, management & commercialisation of IP referred by recipients of public R&D funds

Have capacity to consider IP, and deal with it

Liaise with recipients re: statutory protection of IP, concluding IP transactions, commercialisation of IP

Manage information including data from recipients,

Provide incentives to recipients & IP creators

Provide assistance to institutions for establishment of OTT’s, IP transactions, & commercialisation of IP

Provide appropriate standards & best practices – without limiting the power of recipient to act in its own interests

Develop guidelines for IP transactions involving non-SA entities & persons, and manage their implementation

Monitor, evaluate, & review obligations of recipients

Secretariat to an Advisory Board and establishment of a Dispute Panel

Management of IP Fund29 October 2012NIPMO - Presentation to Portfolio Committee Page 22

NIPMO Interim OfficeNIPMO Interim OfficeCurrent NIPMO Functions & OrganisationCurrent NIPMO Functions & Organisation

NIPMO currently organised into 3 Directorates - following functions …


Directorate: Advisory & Support Services

Directorate: Advisory & Support Services

Directorate: Operations & Special Projects

Directorate: Operations & Special Projects

Directorate:Regulatory & Compliance

Directorate:Regulatory & Compliance

• Monitor, review, & enforce Government’s rights to such IP Central registry for all IP derived from publicly financed R&D

• Manage & approve Full Cost Matrices, and international licensing approvals

• Provide Policy Guidelines toward advancements of publicly funded home-grown discoveries and technologies

• Provide guidelines for OTT capacitation for identification, disclosure, protection & use if IP from PFRD

• Promote human capital and infrastructure development

• Develop critical IP management capacity through Offices of Technology and Transfer (OTT) in local institutions

• Advocacy & awareness creation of IPR-PFRD Act & NIPMO

• Special Projects

• Provide Secretariat for Advisory Board & Dispute Panel

• Cultivate appropriate international partnerships aimed at translating IP from PFRD into tangible products and services

• Manage & Report on Social Benefits

• Management of IP Fund

NIPMO Interim OfficeNIPMO Interim OfficeAdvisory BoardAdvisory Board


The Regulations also make provision for an Advisory Board (A/B) to advise the NIPMO and the Minister…

Advisory Board (A/B) appointed by Minister, comprises 5-9 membersChairperson appointed by Minister for presidingAppointment to A/B not to exceed 4 years, may serve a 2nd term by re-

appointment by MinisterHead of NIPMO is ex-officio member of A/BA/B advises NIPMO on performance of its functions, exercise of its

powers, & execution of its duties, including providing guidance & assistance

A/B is accountable to Minister, & reports annually to himCollectively A/B must have balance of experience & expertise in

research, research management, the HEI environment, IP protection & management, technology licensing & commercialization, technology transfer & business

A/B may constitute & maintain expert committees, & seek expert advice

NIPMO to provide administrative & secretarial support

NIPMO Advisory Board Members appointed for two years effective 01 September 2012 to 31 August 2014

(1) Prof Tana Pistorius (Chairperson)

(2) Prof Gary Atkinson-Hope

(3) Prof Derek Keats

(4) Mr Stephen Madue

(5) Ms Nosizwe Mrwebi

(6) Mr Duncan Raftesath

(7) Mr McLean Sibanda

(8) Prof Petro Terblanche

(9) Ms Rosemary Wolson

NIPMO Interim OfficeNIPMO Interim OfficeDispute panelDispute panel


Regulations provide for Dispute Panel (D/P) to be established by the Minister to hear & determine disputes relating to administrative decisions made by NIPMO …

Chairperson appointed by Minister to presideD/P membership can be reviewed by MinisterD/P is accountable to Minister, & reports annually to himD/P comprises 5-20 members with experience & expertise in areas relating to IP protection & management, commercialisation, dispute resolution & businessSitting of D/P must comprise at least 3 members selected by Chairperson, in consultation with Parties to the disputeD/P to establish own Rules of Procedure which NIPMO must publishPrinciples of fairness, justice, & reasonableness must applyDecisions of D/P subject to appeal or review by a competent courtNIPMO to provide administrative & secretarial support

NIPMO Dispute Panel

NIPMO Interim OfficeNIPMO Interim OfficeOperating Model & Instruments Operating Model & Instruments

Logic of the IPR-PFRD Act = Legal framework to encourage disclosure, protection, utilisation and commercialisation of IP… limited sanctions in the IPR-PFRD Act … reliance on creation of enabling environment, technical support, and financial incentives …

NIPMO - 4 main instruments ...


* OTT’s must be established in

terms of IPR-PFRD Act

R&D Subsidies

IP Registration

Invention Disclosures

Companies & Intellectual Property Commission (CIPC)

New products,services,new firms,Public benefit

NIPMOHigher Education

Institutions, Science Councils, other ….

Public Sector Commercialisation Support

& Funding Agencies (e.g. TIA/SPII)

Department of Science &

Technology

DHET / & other Government Departments

Funding & Support

Funding, Policy & IGR

R&D Outputs

Higher Degrees Publication

outputsetc.

• Identify• Protect• Utilise• Commercialise

Offices of Technology Transfer *

Funding & Support

Funding & Technical

Assistance (IP Fund)

Private Sector Commercialisation Support & Funding

Agencies

Offices of Offices of Technology Technology

Transfer Transfer (OTT’s)(OTT’s)

IP FundIP FundNIPMO NIPMO

IncentivesIncentives

Benefit Sharing Benefit Sharing

(Rights of IP (Rights of IP Creators)Creators)

Incentives

11

22

33 44

22 33 4411

NIPMO Interim OfficeNIPMO Interim OfficeNIPMO InstrumentsNIPMO Instruments


NIPMO has four main “instruments” ...

NIPMO Interim OfficeNIPMO Interim OfficeInstruments: Instruments: Offices for Technology TransferOffices for Technology Transfer


Staffed by appropriately qualified personnel with interdisciplinary knowledge & expertise

Develop policies for disclosure, identification protection, development, commercialization & benefit-sharing

Receive disclosures of IP

Analyze the disclosures for IP rights, suitable forms of protection, commercial potential, & attend to protection

Refer disclosures to NIPMO (Form IP7)

Attend to IP transactions, & commercialisation of IP

Conduct evaluations on scope of IP protection in all geographic territories with commercial potential

Liaise with NIPMO, report bi-annually to NIPMO as provided in the Act

NIPMO Interim OfficeNIPMO Interim OfficeInstruments: Instruments: Intellectual Property FundIntellectual Property Fund

IP Fund Established under IPR-PFRD Act to:

Be managed by NIPMO

Provide financial support to Institutions for statutory protection and maintenance of IP (incl. novelty searches, renewals, prosecution costs, etc.)

Finance NIPMO costs for statutory protection

Fund will operate for next 2 years (to March 2012) according to guidelines for Innovation Fund Patent Support Fund – thereafter new NIPMO Guidelines will apply

Deadline for claims/submissions is 30 November 2012


NIPMO Interim OfficeNIPMO Interim OfficeInstruments: Instruments: NIPMO IncentivesNIPMO Incentives

NIPMO must furthermore provide for…

Incentives to recipients & their IP creators to reward them for protecting, commercialising & promoting innovation

Assistance to Institutions with commercialisation of IP

NIPMO must develop appropriate policies and procedures for the effective implementation of the IP Fund to ensure that the objects of the Act are met

NIPMO must, in accordance with the objects of the Act, determine the operations of the IP Fund, subject to availability of funding from National Treasury


NIPMO Interim OfficeNIPMO Interim OfficeInstruments: IP Creators Benefit SharingInstruments: IP Creators Benefit Sharing

IPR-PFRD Act provides for …

IP creators at an Institution (and their heirs) are granted a specific right to a portion of the revenues that accrue to the Institution from their IP

At least 20% of revenue accruing to an institution for the first R1-million (first call ahead of the Institution distribution)

Thereafter 30% of nett revenue accruing to an Institution

Portion of the Institutional revenue must go to:

– More R&D– Operations of the OTT– Statutory protection of IP– Policy provisions to regulate benefit sharing of non-monetary benefits

with IP creators (NIPMO approval needed)


IPR-PFRD Act IPR-PFRD Act NIPMO Key ChallengesNIPMO Key Challenges


Stakeholders … IP Awareness Entrepreneurial experience Conflicting incentive schemes – DHET Subsidy, NRF Rating Need for Inventor recognition & rewards

NIPMO … Independence in respect of oversight and compliance functions Funding for all of its functions (IP Fund, OTT’s, Incentives) Stakeholder buy-in and cooperation (specifically public sector) People capacity and funding for specialist skills

Stakeholders … IP Awareness Entrepreneurial experience Conflicting incentive schemes – DHET Subsidy, NRF Rating Need for Inventor recognition & rewards

NIPMO … Independence in respect of oversight and compliance functions Funding for all of its functions (IP Fund, OTT’s, Incentives) Stakeholder buy-in and cooperation (specifically public sector) People capacity and funding for specialist skills

OutlineOutline

1. Background





6. Discussion …


3434

Summary of OTT Statistics ...1Summary of OTT Statistics ...1Group A

(Traditional Universities)

Group B(Comprehensive Univ and UoTs)

Group C (IPR-PFRD Act

Schedule 1 entities)

No. of institutions 11 12 10

Existence of IP Policy Yes -10 Yes - 8 Yes - 6

Being Reviewed - 1 Being reviewed - 4No - 1

No - 4

Existence of OTT 8 Institutions 6 Institutions 6 Institutions

OTT Ages

>10 Years 2 None 3

6 - 10 years 3 2 None

0 - 5 years 3 4 3

No. of OTT employees

0 to 2 3 2 2

3 to 5 3 2 2

>5 2 2 2

3535

Group A (Traditional Universities)

Group B(Comprehensive Univ and UoTs)

Group C (IPR-PFRD Act

Schedule 1 entities)

Funding of OTT Operations

Parent Institution 4 4 5

Innovation Fund 1 None None

Parent Institution and Innovation Fund

3 2 1

Invention Disclosures (2009)

54 23 34

Spin Offs/Start Ups since inception

15 11 7

Licensing Deals in the last 3 years

24 16 24

Licensing Revenues in the last 3 years

R5.48m R2.7m R4.6m

Summary of OTT Statistics ...2

IPR-PFRD Act / NIPMO Impacts to DateIPR-PFRD Act / NIPMO Impacts to DateRegulatory & ComplianceRegulatory & Compliance


Group A 11 11 11 5 11 11

Group B 12 10 7 7 10 9

Group C 10 7 10 2 8 7

TOTAL: 33 28 28 14 28 27

Institutional Compliance

Group A: Historically black and Historically white institutions

Group B: Comprehensive Universities and Universities of Technology

Group C: Schedule 1 entities as per the IPR-PFRD Act

Commercialisation Reports

Compliance

Number of Institutions

Institutions ϲ/ IP

Policies

NIPMO Support

(Current & envisaged)

IP Policy Compliance

OTT/ Function

IPR-PFRD / NIPMO Impact to DateIPR-PFRD / NIPMO Impact to DateDisclosure StatisticsDisclosure Statistics


IPR-PFRD / NIPMO Impact to DateIPR-PFRD / NIPMO Impact to DateSA Provisional's & PatentsSA Provisional's & Patents


IPR-PFRD / NIPMO Impact to DateIPR-PFRD / NIPMO Impact to DatePCT ApplicationsPCT Applications


IPR-PFRD / NIPMO Impact to DateIPR-PFRD / NIPMO Impact to DatePublications & DisclosuresPublications & Disclosures


0,88% 1,71% 2,03% 2,40% 2,21% 2,63%

Invention disclosures as % of ISI publications

OutlineOutline

1. Background




5. NIPMO - SSDU Proposal

6. Discussion …


NIPMO SSDU Proposals NIPMO SSDU Proposals Process to DateProcess to DateThe process to date as well as activities underway are summarised below…


The DPSA requirements for a feasibility study are set out below …

● Justify why a government component (GC) / or Specialised Service Delivery Unit (SSDU) is the appropriate institutional form

● Details of policy, legislation, finances, governance, human resources, operations

● Serves as a framework for managing the establishment and implementation of the GC / SSDU

● Serves as a basis for monitoring and evaluation of changes

Part 1:Institutional

Option Assessmen

t

Part 1:Institutional

Option Assessmen

t

Part 2:Business

Case

Part 2:Business

Case

Feasibility Study

Feasibility Study

NIPMO SSDU Proposals NIPMO SSDU Proposals Organisational CompetenciesOrganisational Competencies

NIPMO is a knowledge based organisation. To design the organisational structure and understand the H/R implications, it is necessary to identify and define the priority organisational competencies. Identified as follows:


Institutional competency

Description

Innovation systems

Ability to identify, understand, analyse and interpret systems in the context of product, process, marketing and organisational innovations and to understand and apply this knowledge to promote social, economic and environmental change

Research and development

Ability to conduct, source, analyse and interpret information, data and findings to establish new findings, systems &/or applications

Intellectual property

Ability to classify, identify, interpret and apply the rights that are relevant linked to a particular type of IP (both industrial and copyright) based on the prevailing statutory and regulatory environment

RegulationAbility to develop, review, assess, audit and implement action related to the defined Regulations in the IP environment with identified organisations and stakeholders

Capacity Development

Ability to design, coordinate and manage the development and implementation of skills development initiatives to support the development, regulation, protection and utilisation of intellectual property

Corporate Governance

Ability to design, develop and implement appropriate corporate governance principles and practices to ensure alignment with the relevant public sector acts and regulations

Fund Management

Ability to establish and manage a fund in a way that adheres to good financial management and fund management principles, creates clear criteria for fund allocation and applied these criteria and the allocation of funds in a way that is clear and defensible, and meets predefined objectives

Operational Management

Ability to develop strategic plans and implement these plans that ensure achievement of organisational mandates, performance criteria and targets

NIPMO SSDU Proposals NIPMO SSDU Proposals Core FunctionsCore Functions

NIPMO SSDU will have three core functions …


• Finance and procurement*

• Human Resources*

* Delegations from Accounting Officer of DST

• OTT capacity building

• Coordination of OTT’s

• IGR, sector networking and partnership devt.

• Facilitation of Utilization and Commercialisation

• Specialist Advisory

• Advocacy, Education & Learning

• Disclosure and compliance

• Register of IP

• IT transaction review and approvals

• Legal advice

• Enforce IP rights of government

• Grants for IP Protection Costs (IP Fund)

• Incentives for Inventors

• Funding of OTT’s

• Other financial support to promote objects of Act

• Management of royalties and license fees on assigned IP (longer-term)

NIPMO CorporateServices

NIPMO CorporateServices

Advisory and SupportAdvisory and SupportRegulationRegulation IP Fund & IncentivesManagement

IP Fund & IncentivesManagement

NIPMO SSDU Proposals NIPMO SSDU Proposals Institutional Options - ConsiderationsInstitutional Options - Considerations

Review of functions and good practice indicate that ...

NIPMO - primary mandate is statutory protection, management and utilisation / commercialisation of publicly-funded intellectual property ...

– Custodian of IP on behalf of government

– Regulating agency

– Enabling agency

– Promotion agency

NIPMO - is not ...

– Policy maker

– Registrar

– Implementing agency viz commercialisation / utilisation (viz. TIA)

Importantly the IPR-PFRD Act makes provision for NIPMO as an Office in DST or the assignment of NIPMO's functions to another public entity …


NIPMO SSDU Proposals NIPMO SSDU Proposals Assessment ParametersAssessment Parameters

Governance & Accountability

– Does the institutional option facilitate good governance, is there independent oversight that enables trust viz the executive authority and stakeholders?

– Does it facilitate accountability to Ministry and Executive Authority and ensure alignment with NSI mandate?

Ability to attract / retain or procure scarce specialist skills

– Does it enable the entity to attract and retain scarce skills?– Does it enable the ability to procure specialist service providers / resources?

Sufficient Independence to Regulate

– Does the location enable sufficient independence to regulate/ ensure compliance across government ?

Ability for IGR (incl. coordination)

– Does the option support or enable improved inter governmental relations?

Independent Financial Management

– Does the option enable independent financial management, including the operating of a trading account?


NIPMO SSDU Proposals NIPMO SSDU Proposals Governance ArrangementsGovernance Arrangements


Ministry of Science &

Technology

Department of Science &

Technology (DG)

NIPMO(Head)

Advisory Board

Accountability, Policy and Performance Reporting

Accountability and Performance Reporting

Accountability, Policy and Performance

Reporting

Advice on functions and performance

Dispute Panel

Dispute hearings

Reporting and accountability on

financial and operational

matters

Preliminary

NIPMO SSDU Proposals NIPMO SSDU Proposals Recommendations - ImplementationRecommendations - Implementation

Implications in respect of establishment requirements, processes and timeframes …


Step OutcomeIndicative

TimeframesStatus/

Date

(1) Feasibility Study & Business Case

Feasibility study prepared as per DPSA requirements Business case prepared as per DPSA requirements

3 months (2) Protocol, Delegations

and SLA

Protocol drafted Financial and HR delegations prepared SLA drafted for corporate services

3 months (in parallel to Step 1)

In process

(3) Government Gazette Notice for Government gazette prepared3 months (in parallel to

Step 1 and 2) tba

(4) Regulatory Approvals Feasibility Study and Business Case, Protocol, Delegations,

SLA & draft Gazette submitted to DPSA and NT for approval3 months tba

(5) Publication Notice published in Gazette 1 month tba

(6) Appointment of Head and Advisory Board

Head of entity appointed 3 months tba

(7) Staffing Staff contracted 3 months tba

(9) Establishment of Trading Account

Trading account submission prepared and submitted to National Treasury for approval

3 – 6 months (in parallel to Step 6 & 7) tba

OutlineOutline

1. Background





6. Discussion …


Great South African Innovations .....Great South African Innovations .....Computicket, CAT scan, Cricket speed gun, Heart transplants, Oil-from-Computicket, CAT scan, Cricket speed gun, Heart transplants, Oil-from-

coal refinery, Pratley Putty, Tellurometer measures, etc.?coal refinery, Pratley Putty, Tellurometer measures, etc.?CAT Scan - Computed Axial Tomography Scan, developed at Tufts University by SA physicist Allan Cormack and Godfrey Hounsfield of EMI Labs - Awarded 1979 Nobel Prize in Physiology or Medicine.

Sasol is the world's first & largest oil-from-coal refinery, providing 40% of SA's fuel. Sasol began in 1927 with White Paper to investigate establishment of this industry

First heart transplant performed by Dr Chris Barnard in Cape Town on 3 Dec, 1967

Dolosse are unusually shaped concrete blocks - 20 tons and more - used to protect coastal installations from the action of the waves. Inventor Eric Mowbray Merrifield forgot protect his design.

The SA-made speed gun, invented by Henri Johnson, was formally launched at The Oval in England during the 1999 Cricket World Cup.

Swimming pool cleaner invented by Ferdinand Chauvier, a hydraulics engineer who came to SA from Congo in 1951. It wasn't until 1974 that the first Kreepy Krauly was released.

Rooibos and Buchu products, Indigenous Knowledge Systems, Hippo water roller, Cobb Cooker and many more ....

29 October 2012

Thank you for your

kind attention!

Jonathan S. [email protected]

Page 52NIPMO - Presentation to Portfolio Committee

Intellectual Property Rights from Publicly Financed Research and Development Act (Act 51 of 2008) Presentation to Portfolio Committee on Science and Technology.

Documents

nipmo presentation

nipmo challenges

establishment of nipmo

nipmo section

established nipmo

operation of nipmo

development act act

portfolio committeepage