Research for Development in South Africa Collaborative Research Or Research for Sale?

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Research for development in South Africa – collaborative research or research for sale?

The Regulations for the IPR Act of 2008

We ...need to work with our friends around the world. Science, technology and innovation proceed more rapidly and more cost-effectively when insights, costs and risks are shared; and so many of the challenges that science and technology will help us meet are global in character.

Science cannot supplant our ethics or our values, our principles or our faith. But science can inform those things and help put those values — these moral sentiments, that faith — can put those things to work — to feed a child, or to heal the sick, to be good stewards of this Earth.

Remarks by President Barack Obama to the NationalAcademy of Sciences. Washington, April 27 2009

It is striking that President Obama's vision of a collaborative, ethical and empowering science system are notably absent from the model for scientific research that is being implemented through the IPR Act of 2008 and the Regulations that have been drafted to enforce it. In this legislation, the South African government seems to be turning the clock back to a conservative vision of a world driven by money and commercial exploitation, more akin with Reagan or Bush than Obama.

When we engage in research we hope to generate new knowledge and innovation that will benefit South Africa, and indeed humanity generally. We produce publications, conference papers, demonstrations and sometimes working models to illustrate our findings. Often what we produce is subject or potentially subject to copyright, patent and trademark laws, which are collectively referred to as 'intellectual property', sometimes we prefer to collaborate freely, building benefits from shared capacity.

Now intellectual property that is ‘created’ in publicly financed institutions in South Africa has been completely redefined in a new Act of Parliament, the Intellectual Property Rights from Publicly Funded Research and Development Act, 2008. The new Act was published on the 28th December last year, and has major implications for all South African researchers, not just scientists and engineers. It is likely to affect you in that it makes it obligatory to subject all research funded totally or partially (even if only a fraction) by the country’s public institutions to a process of government scrutiny! Even if your work is not ‘protectable’ in South Africa, if there is somewhere in the world where it could be registered in some way, then the terms of the new Act apply. In the past there were many areas of research that were not necessarily ‘protectable’ under South African law, and researchers often chose not to even consider the possibility of patenting, preferring rapid publication; this may not now be an option.

Researchers in the medical school, science and engineering, humanities, social sciences, business school, and architecture can not assume any longer that these provisions do not apply to them because what they do is not normally patentable. Nor can any unit working with open source software development, as software is patentable in the US and the Regulations require that permission must be sought for open source development. The scale of what this might mean for the university IP office and for individual researchers is daunting; even more so the volume of forms to be filled in. But most of all, it is the loss of freedom for researchers and the university to make their own decisions on how to manage the dissemination of their work and how to ensure its impact that is most threatening.

"The specific object of the legislation is that intellectual property emanating from publicly financed research and development should be commercialized for the benefit of all South Africans, and protected from appropriation." It should be “for the benefit of the people of the Republic, whether it be for a social, economic, military or any other benefit”. It is often appropriate to commercialize the results of research, but its more often not worth costs, and complicated bureaucratic rules can in fact act as an impediment to innovation.

The Government Department with responsibility for this is the Department of Science and Technology, and the policy documents motivating the research claim that "the law is aimed at facilitating the creation of new knowledge that is derived from public funding and to secure this knowledge in the form of IP rights, including, but not limited to patents, for IP that could have economic and social benefits."

The Department has published Draft Regulations for the implementation of the Act. These have serious implications for researchers and the universities they work in, in particular threatening to limit the freedom of universities and their researchers to make their own decisions about how to ensure the national and international impact of their own research.

A major problem is that the Regulations are not well drafted and as a result are often ambiguous and difficult to interpret. They are drafted from the point of view that intellectual property protection, patenting and commercialization of research need to be enforced wherever this is possible, through a series of bureaucratic reviews at institutional and national level. It would appear that these reviews would be carried out by patent lawyers and business specialists, with little or no involvement of research expertise. The Regulations appear to have little understanding of the ways in which research is conducted in the 21st century, with its complex online networks of collaborative, interdisciplinary and international partnerships. We therefore fear that, as they stand, these Regulations might pose a serious threat to the future of South African research, seriously restricting, if not preventing, the ability of South African researchers to enter into the contractual arrangements required by international research consortia.

Experience from highly successful innovating institutions in the USA, such as MIT, the University of Arizona and the University of California suggest that successful innovation is best driven by the researchers:

A university culture that is accepting of entrepreneurial activities is best built from the bottom up by researchers who promote and connect other colleagues outside of academe. It is the researchers themselves, rather than the [Technology Transfer Offices] (TTOs) who are in the best position to recognise entrepreneurial potential. This comes from their accumulated knowledge in their fields and from the social capital they have built up from their professional relationships both in and outside the university. As these new forms emerge, or more accurately the TTOs become just one component of the innovation and commercialization ecosystem, technology transfer will increase in efficiency, volume, and quality on most campuses. (Litan et al. 2007; 11)

This is not the vision of this Act, This South African Act is modelled on the US Bayh-Dole Act which dates back to the pre-Internet era, (1980) which was intended to encourage universities to patent appropriate research in the interests of economic growth. The Bayh-Dole Act is the legal framework for transfer of university generated, federally funded inventions to the commercial marketplace in the United States. Whether or not the legislation achieved this goal remains a matter of debate, but nearly 30 years after its enactment, this kind of legislation is under review worldwide. Recent evidence suggests that the innovation system in the 21st century is not best served by a bureaucratic technology transfer system built on patents alone.

For example, a recent comprehensive review of national innovation policy in Australia the recommendations include a move away from an approach build on tight IP protection to open dissemination of research findings:

Governments and public agencies are centrally involved in the provision of research, information and content across a very broad range of activities. For some years now, both commercial and policy focus has turned towards the economic and social benefits flowing from open access to these resources, and by contrast, the potential costs and ‘value damming’ that can be involved in ‘business as usual’ models where content is more tightly held. (DEER 2009: 93)

Before looking at the Regulations, it is necessary to grapple with the definitions and provisions in the Act, which are sometimes ambiguous and difficult to interpret:

1. The central provision of the Act is that universities carrying out research involving the use of public funds have to assess and report on all research carried out in the university that might have the potential for IPR protection and commercialisation in any jurisdiction anywhere in the world, through an institutional Intellectual Property Management Office.
2. If there is such potential for ‘protection’ and the researcher and the university do not wish to seek IP protection, or wishes to to take an open source or open access approach to achieving impact, then this decision has to be made according to the guidelines provided by the National IP Management Office (NIPMO) which has to be notified of this decision. NIPMO then reviews the decision and can, if it disagrees with the university, take ownership of and obtain statutory protection for the IP resulting from the research.
3. Although the relevant clause is difficult to interpret, it would appear that research funded by private organisations only counts as not being publicly funded if the full cost of the research is covered, including all direct and indirect costs (15b). This probably means that if a research programme is funded by a corporation or donor, but the university supports the researcher's office and computer infrastructure, such research is subject to this Act. You may have thought that this Act is designed only for research funded by the National Research Foundation or other government-funded research bodies, this is not what the Act says. Even if it is only your salary that is paid through public funds, or it is the lights in your office that are paid for, the terms of the Act apply.

Moreover, although researchers might think that the legislation would only apply to those projects that would normally seek South African patent registration – mostly in the applied sciences - both the definition of what kinds of intellectual property is included under the Act and what geographical region is encompassed is extremely wide. The result is that this legislation is likely to impact on most, if not all, academic disciplines, drawing in researchers who up until now have not been familiar with the processes of protecting their work through a formal system..

The definition of the IP covered by the Act excludes copyrights in published works, and includes ‘creations of the mind’ that are capable of being protected under South African and foreign IP law, anywhere in the world. That would mean that software and business processes, patentable in the US but not in SA, have to be considered in terms of this Act, as would research processes, clinical procedures and diagnoses. None of these are patentable under South African law, but it would appear that this legislation requires researchers to seek foreign patents where these would be applicable. The cost of this provision to the universities, apart from anything else, would be prohibitive, possibly as hundreds of thousands of US dollars per patent, as it appears that patents in most countries in the world would need to be sought for anything that is patentable.

One of the major problems of the legislation and the Draft Regulations that is that protection must be sought, whether or not it would be commercially viable to do so. Nor is there any distinction between when it is desirable to patent something patentable, and when not.

Databases, which are protected under the EU database provisions, would also fall under this legislation. Trademarks, artistic works and designs would presumably have to be considered, too. Electronic media would to be covered, given the definition of copyright works that are excluded in the Act.

The requirements of the Regulations

The drafting of the Regulations was reviewed by a committee consisting of a few university IPR officers, the CSIR and a group of industries. Researchers were apparently not represented.

The Regulations tie up the process of commercializing research in a series of bureaucratic processes that are likely to impinge upon most research activity. In itself, this poses serious capacity problems. Moreover, a requirement that any decision not to patent or protect potential IP to a government office will put serious constraints upon university academic freedom and threatens to create serious logjams. When a decision is made on whether or not a piece of research requires protection, the only basis on which the researcher or the university can make decision on their own not to seek IP protection is that it is not patentable (under the broad definition described above) and that the legislation therefore does not apply. In any other case, a form has to be filled in and the decision referred to NIPMO.

While some of the provisions made for considering alternatives to patenting, taken singly, might be admirable, the Regulations appear to demand that the applicant fulfil all the requirements listed, something that would appear to be well-nigh impossible.

There is confusion in the Regulations between public domain, open source and open access, but Section 2 (12) appears to be saying that where a the university wants to make research open access or develop open source software, it has to fill in a form and apply to NIPMO. If the need to make the research open comes from the requirements of cooperative research agreements or funder requirements (as the Gates Foundations, NIH or the EU FP7 do), then such an agreement has to have prior approval from NIPMO, before a contract is signed. According to the Regulations, NIPMO then decides whether this agreement is in the best interests of the country or not. That is in startling contrast to the Constitutional requirement that government should protect and promote academic freedom including freedom of research.

If the university enters into a collaborative research agreement, it must retain ownership of any pre-existing IP and commercialize this in line with the Act; retain IP rights in what it produces, or jointly own IP. It must ensure the commercialization in SA of this collaborative research. If the partners in the collaboration require open licences, then NIPMO has to approve before the university can enter such an agreement. NIPMO will publish guidelines on how universities have to manage such collaborations. The question is how universities will manage their research collaborations with this level of interference. And what effect this will have on research output and its social and economic impact. The conditions for approval if a decision not to ‘patent’ is taken are very stringent.

There is a retrospective clause that says NIPMO can audit a university’s disclosure of IP. The university is required to report twice a year detailing the IP governed by the Act and how it has been commercialized. Then NIMPO can audit annually. If it finds that any IP has not been declared, then it can retroactively enforce assignment of the rights. The question that arises here is whether researchers can enter into open or shared IP arrangements with research consortia with this level of uncertainty looming in the future. Does this mean that the university’s ability to contract with donors who require assurances of open IP management will be compromised? How could the university offer such assurances if they can be reversed by NIMPO at a later date?

This will surely mean that super-caution will be exercised by submitting everything for approval before research contracts begin. And what effect would that have on research effectiveness?

There is a good deal of further detail in the Regulations that is open to challenge. However, it is clear that there needs to be a serious review of these Regulations in the light of the realities of the research experience and acknowledgement of how research is conducted in a 21st century knowledge economy. The aspects of the Regulations and the underlying legislation that risk unconstitutionality might also need to be addressed.

Above all, South Africa needs a research innovation system that really works to deliver the national development goals that could bring about real transformation in our society, especially for the poor and disadvantaged, whether in health, poverty alleviation, environmental issues, technology, or rural and urban development.

References

Department of Education, Employment and Workplace Relations, Government of Australia. 2009. Economic Impact of Public R&D Activity in Australia.

Litan, Robert E , Lessa Mitchell, and E.J. Reedy. 2007. Commercializing University Innovations: A Better Way . AEI-BrookingsJointCenter Related Publication. Brookings Institution, May.

Julian Kinderlerer

Professor of Intellectual Property Law, University of Cape Town

Professor of Biotechnology & Society, TechnologyUniversityDelft

Former Director and Honorary Professor of Biotechnology Law, University of Sheffield

Member of the European Group on Ethics

Eve Gray

Honorary Research Associate

Centre for Educational Technology

University of Cape Town

Andrew Rens

Intellectual Property Fellow

Shuttleworth Foundation