1. Research Contracts and IP Services IPR Act Information Session October 2010

2. Research Contracts and IP Services Government Gazette REPUBLIC OF SOUTH AFRICA Vol. 522 Cape Town 22 December 2008 No. 31745 THE PRESIDENCY No. 1402 22 December 2008 It is hereby notified that the President has assented to the following Act, which is hereby published for general information:– No. 51 of 2008: Intellectual Property Rights from Publicly Financed Research and Development Act, 2008

3. Research Contracts and IP Services

4. Object of Act The object of this Act is to provide for intellectual property emanating from publicly financed research and development to be 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.

5. Research Contracts and IP Services Definitions “Intellectual Property" means any creation of the mind that is capable of being protected by law from use by any other person, whether in terms of South African law or foreign intellectual property law, and includes any rights in such creation, but excludes copyrighted works such as a thesis, dissertation, article, handbook or any other publication which, in the ordinary course or business, is associated with conventional academic work. “Publicly financed research and development” research and development undertaken using any funds allocated by a funding agency but excludes funds allocated for scholarships and bursaries R&D funded by a private entity or organisation at below full cost. “Publicly financed research and development” research and development undertaken using any funds allocated by a funding agency but excludes funds allocated for scholarships and bursaries R&D funded by a private entity or organisation at below full cost. “Private Entity or organisation” means a private sector company, a public entity, an international research organisation, an educational institution or an international funding or donor organisation. “Funding Agency” means the State or an organ of state or a state agency that funds R&D. “Commercialisation” means the process by which any intellectual property emanating from publicly financed research and development is or may be adapted or used for any purpose that may provide any benefit to society or commercial use on reasonable terms. “Full Cost” means the full cost of undertaking R&D as determined in accordance with international financial reporting standards, and includes all applicable direct and indirect cost as may be prescribed.

6. Research Contracts and IP Services Summary of the Act Institutional Arrangements o National IP Management Office o Office of Technology Transfer (RCIPS) Institutional Arrangements o National IP Management Office o Office of Technology Transfer (RCIPS) Benefit Sharing Arrangements o 20% of initial gross revenues (R1m) o 30% of nett revenues Benefit Sharing Arrangements o 20% of initial gross revenues (R1m) o 30% of nett revenues Co-financed R&D o Option to exclusive licence o Joint Ownership possible Co-financed R&D o Option to exclusive licence o Joint Ownership possible Government Rights o Non-exclusive licence for national needs o Non-commercialisation o Non-disclosure Government Rights o Non-exclusive licence for national needs o Non-commercialisation o Non-disclosure Local IP Transactions o Licences - no approval required o Assignment - NIPMO approval Local IP Transactions o Licences - no approval required o Assignment - NIPMO approval Off-shore IP Transactions o Exclusive Licences & Assignment require NIPMO approval o No capacity in RSA & Benefits to RSA Off-shore IP Transactions o Exclusive Licences & Assignment require NIPMO approval o No capacity in RSA & Benefits to RSA Disclosure and Ownership of Intellectual Property  Recipient [UCT] has title to IP if project falls within scope of Act  Funder can have title to IP if project is full cost, i.e. falls outside scope of Act  Obligation to protect  NIPMO may protect in national interest where recipient elects not to Disclosure and Ownership of Intellectual Property  Recipient [UCT] has title to IP if project falls within scope of Act  Funder can have title to IP if project is full cost, i.e. falls outside scope of Act  Obligation to protect  NIPMO may protect in national interest where recipient elects not to

7. Research Contracts and IP Services Benefit Sharing Act IP Creators and their heirs entitled to: At least 20% of revenue accruing to institution for first one million rand of revenues (or such higher amount the Minister may prescribe), and Thereafter, at least 30% on nett revenues IP Creators and their heirs entitled to: At least 20% of revenue accruing to institution for first one million rand of revenues (or such higher amount the Minister may prescribe), and Thereafter, at least 30% on nett revenues Regulations Payment not later than a year after receipt Nett – deducted out of pocket expenses Institution to develop policy to regulate b/s of non-monetary benefits NIPMO to approve policy Payment not later than a year after receipt Nett – deducted out of pocket expenses Institution to develop policy to regulate b/s of non-monetary benefits NIPMO to approve policy

8. Research Contracts and IP Services Full Cost Act Any R&D undertaken at an institution and funded by a private entity or organisation on a full cost basis shall not be deemed to be publicly financed R&D and the provisions of this Act shall not apply thereto. "full cost" means the full cost of undertaking R&D as determined in accordance with international financial reporting standards, and includes all applicable direct and indirect costs as may be prescribed. Any R&D undertaken at an institution and funded by a private entity or organisation on a full cost basis shall not be deemed to be publicly financed R&D and the provisions of this Act shall not apply thereto. "full cost" means the full cost of undertaking R&D as determined in accordance with international financial reporting standards, and includes all applicable direct and indirect costs as may be prescribed. Regulations Each institution must every 2 years, submit to NIPMO for approval, formulae for calculation of its applicable direct costs and indirect costs together with an explanatory note The formulae must include the basic applicable direct costs of undertaking the R&D determined in terms of the institution's financial and related policies and in accordance with GAAP If not feasible to determine the indirect costs accurately, the formulae will include a determination of a surcharge in the form of a percentage to be levied on the direct costs as a best estimate of the indirect cost On approval NIPMO or such other agency accredited by NIPMO in terms of guidelines to be issued by NIPMO, must issue such institution with a certificate confirming NIPMO's acceptance of the institution's costing model Each institution must every 2 years, submit to NIPMO for approval, formulae for calculation of its applicable direct costs and indirect costs together with an explanatory note The formulae must include the basic applicable direct costs of undertaking the R&D determined in terms of the institution's financial and related policies and in accordance with GAAP If not feasible to determine the indirect costs accurately, the formulae will include a determination of a surcharge in the form of a percentage to be levied on the direct costs as a best estimate of the indirect cost On approval NIPMO or such other agency accredited by NIPMO in terms of guidelines to be issued by NIPMO, must issue such institution with a certificate confirming NIPMO's acceptance of the institution's costing model

9. Research Contracts and IP Services Act Admin Agency under DST Supporting Role Capacity building Guidelines IP Transactions IP Fund Regulatory/ enforcement Disclosures Offshore IP Transactions Government Rights Full-costing Admin Agency under DST Supporting Role Capacity building Guidelines IP Transactions IP Fund Regulatory/ enforcement Disclosures Offshore IP Transactions Government Rights Full-costing Regulations Minister appoint Head of NIPMO Advisory Board (5 to 9) Independent dispute Minister appoint Head of NIPMO Advisory Board (5 to 9) Independent dispute NIPMO

10. Research Contracts and IP Services TTO [Research Contracts & IP Services] A recipient must : put in place mechanisms for the identification, protection, development, management of IP, IP transactions and, where applicable, the commercialisation of IP and appropriate capacity- building relating thereto; provide effective and practical measures and procedures for the disclosure of IP and ensure that IP is appropriately protected before results of such R&D are published or publicly disclosed by other means; Ensure disclosures are made within 90 days or such longer period as may be prescribed, of identification of possible IP and before the IP is made public; assess the IP to determine whether it merits statutory protection and, where appropriate, apply for and use best efforts to obtain statutory protection in its name; refer disclosures for which it elects not to retain ownership or not to obtain statutory protection to NIPMO within 30 days or such longer period as may be prescribed, of it making such an election; in the case of an institution, manage revenues due to it from IP transactions and the commercialisation thereof, including managing the benefit-sharing arrangements with intellectual property creators at the institution. A recipient must : put in place mechanisms for the identification, protection, development, management of IP, IP transactions and, where applicable, the commercialisation of IP and appropriate capacity- building relating thereto; provide effective and practical measures and procedures for the disclosure of IP and ensure that IP is appropriately protected before results of such R&D are published or publicly disclosed by other means; Ensure disclosures are made within 90 days or such longer period as may be prescribed, of identification of possible IP and before the IP is made public; assess the IP to determine whether it merits statutory protection and, where appropriate, apply for and use best efforts to obtain statutory protection in its name; refer disclosures for which it elects not to retain ownership or not to obtain statutory protection to NIPMO within 30 days or such longer period as may be prescribed, of it making such an election; in the case of an institution, manage revenues due to it from IP transactions and the commercialisation thereof, including managing the benefit-sharing arrangements with intellectual property creators at the institution.

11. Research Contracts and IP Services Referral to NIPMO Not Required Where the IP: Cannot be protected through statutory registration, or Further R&D required before protection can be obtained, or Has no prospects of addressing socio-economic needs of RSA Where the IP: Cannot be protected through statutory registration, or Further R&D required before protection can be obtained, or Has no prospects of addressing socio-economic needs of RSA Required Recipient does not wish to obtain protection or retain ownership of IP: which can be protected, or has commercial prospects, or can contribute to the socio–economic needs of RSA, or Because recipient wishes to place IP in public domain Recipient does not wish to obtain protection or retain ownership of IP: which can be protected, or has commercial prospects, or can contribute to the socio–economic needs of RSA, or Because recipient wishes to place IP in public domain

12. Research Contracts and IP Services Disclosure to RCIPS on Invention Disclosure Form Assessment by RCIPS Report to NIPMO. Twice Annually on Form IP7 [Reg 14(1)(a)] Failure to disclose - NIPMO takes IP [Act 14(5)] Refer to NIPMO [Form IP1] Protect No societal / economic benefit More work required Return to IP Creator (and Co-funder) 90d 30d 60d 30d Return to UCT Prior to Public Disclosure Zone

13. Research Contracts and IP Services Government Rights Act Non-exclusive, royalty-free, non- transferable, worldwide licence for use by Government for health, security, strategic & emergency needs Non-commercialisation Walk-in rights : Failure to disclose – assignment of IP to government Non-exclusive, royalty-free, non- transferable, worldwide licence for use by Government for health, security, strategic & emergency needs Non-commercialisation Walk-in rights : Failure to disclose – assignment of IP to government Regulations " The intellectual properly under this transaction was created with support from the South African Government; ((under the contract number where applicable) awarded by (identify the Funding Agency or relevant government department) where applicable» and is subject to the requirements of the South African Intellectual Properly Rights from Publicly Financed Research and Development Act, 2008 and its regulations (Act 51 of 2008"). The South African Government has certain rights to the intellectual property in terms of sections 11(1)(e), 11(2) and 14 of Act 51 of 2008". Consult with recipient to address non- commercialisation/non-performance Clear ‘proclamation’ process of walk-in rights " The intellectual properly under this transaction was created with support from the South African Government; ((under the contract number where applicable) awarded by (identify the Funding Agency or relevant government department) where applicable» and is subject to the requirements of the South African Intellectual Properly Rights from Publicly Financed Research and Development Act, 2008 and its regulations (Act 51 of 2008"). The South African Government has certain rights to the intellectual property in terms of sections 11(1)(e), 11(2) and 14 of Act 51 of 2008". Consult with recipient to address non- commercialisation/non-performance Clear ‘proclamation’ process of walk-in rights

14. Research Contracts and IP Services NOTES a) If IP is claimed: all projects need to be costed at full cost b) Terms under which funds are provided need to be known and considered before the submission of a proposal c) Unless otherwise agreed in a faculty, all budgets must be signed off by an authorised faculty official (FO) and where applicable the PI and FO must confirm that project was budgeted at full cost ACTIONS a) One uniform cost model must be implemented b) National initiative c) Funders’ Guidelines d) Sign-off page (costing, previous funders, background IP) e) IRMA Summary, Notes and Actions a)A Client/Funder can only claim rights to Intellectual Property if at least the full cost of the project is charged (this includes the cost of GOB-paid staff members working on a project). b)If a foreign entity wishes to own the rights to the IP, the above apply and in addition Reserve Bank approval is required. COSTING OF RESEARCH PROJECTS

15. Research Contracts and IP Services Summary, Notes and Actions DISCLOSURE OF INVENTIONS Implement effective and practical measures and procedures for the disclosure of intellectual property and ensure that intellectual property emanating from any publicly financed research and development is appropriately protected before results of such R&D are published or publicly disclosed by other means; NOTES Published or publicly disclosed, means any form of disclosure to another party. Non-disclosure Agreements ACTIONS Start of Project: Acceptance letter End of Project: Declaration letter Develop procedures in collaboration with departments/faculties Grants/Contracts that fall under the Act

16. Research Contracts and IP Services Co-ownership of IP 4 criteria need to be met: a)Contribution of resources – funding, background, materials/ in-kind, etc. b)Co IP creation – i.e. they need to be regarded as an inventor on a patent. c)Benefit share with IP creators d)Must enter into commercialisation agreement

17. Research Contracts and IP Services Collaborations In terms of IP arising from collaborative research funded by one or more international funding / donor organisations, or research institutions, UCT must: Retain ownership of IP developed by UCT researchers and co-own jointly developed IP Use reasonable endeavors to ensure that commercialisation of the IP Provide access to collaborators in line with international norms / agreements IP can be licensed to collaborators and even assigned (although NIMPO approval required and all usual conditions relating to on-shore and off-shore transactions remain) If access granted for commercialisation by a collaborator on royalty-free basis, then NIMPO approval required at proposal stage Guidelines will be published by NIPMO in respect of multi-party collaborative R&D agreements

18. Research Contracts and IP Services Upfront Referral of Research Contract to NIPMO Royalty-free access to the IP Licensing at below market rate OpenSource output

19. Research Contracts and IP Services Example 1 A funder funds a research project that is supervised and worked on by Prof. X. They pay for all materials and for the time of technical officers. Can the funder claim the IP? No: –Prof. X’s time not covered –no overheads were included –project not costed at full cost Project falls within scope of Act as there is inherent government subsidisation, i.e. there does not need to be direct contribution of money by government. Funder could access IP via exclusive license.

20. Research Contracts and IP Services More information… www.rcips.uct.ac.za Act (including FAQs) IP Invention Disclosure Form and patenting process IP team contact details Patenting and IP Management seminars – see Seminars page

21. Research Contracts and IP Services QUESTIONS