2. Research Contracts and IP Services IPR Act – “Lite” Version

3. Research Contracts and IP Services This “lite” version of the IPR Act presentation provides an introduction to key information Comprehensive information, more detailed presentations and copies of the Act, its Regulations and various guidelines are available on the RCIPS website

4. Research Contracts and IP Services Intellectual Property Rights from Publicly Financed R&D Act

5. Research Contracts and IP Services 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.

6. 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. NB if projects are run below full cost, there a deemed government subsidy even if no specific Funding Agency money is being applied directly in the project. “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.

7. Research Contracts and IP Services NIPMO The National IP Management Office (NIPMO) has been established under Department of Science and Technology NIPMO is responsible for the implementation of and ensuring compliance with the IPR Act The 2-year ‘pilot’ will end early on 2013 and NIPMO will be established as an independent legal entity NIPMO is processing all referrals and routine reporting The Advisory Board is being appointed Guidelines have started to be produced and issued

8. Research Contracts and IP Services Role of RCIPS Research Contracts & IP Services fulfils the role of “Office of Technology Transfer” a function that a university is obliged to establish in terms of the Act – primarily to protect & commercialise IP emanating from UCT’s research RCIPS acts as the liaison with NIPMO, submitting the necessary referrals, motivation and routine reports on behalf of the UCT research community RCIPS has also ensured that the new UCT IP Policy is compliant with the IPR Act and has obtained NIPMOs approval of the policy

9. 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

10. Research Contracts and IP Services Ownership of IP Full CostOwnership A<UCT The default position in terms of the Act is for UCT to own the IP The IP may be made accessible to the funder by licensing, which may be exclusive Can motivate and seek approval from NIPMO for assignment to funder at end of project Whilst IP may not be jointly owned, benefit from commercialisation may be shared If paid > 70%, royalty-free license permitted B<Joint Four conditions need to ALL be met: 1.Contribution of resources [money, background IP, people] 2.Agreement to commercialise the IP 3.Benefit share with IP creators (provided for in UCT IP Policy) 4.Joint creation of the IP. If patented, at least one person from funder’s team must be named as an inventor C= or >Funder When the funder pays full cost or above, they may own the IP It is a negotiation and UCT may charge a margin above full cost, to reward the researcher’s expertise

11. Research Contracts and IP Services NOTES a) If IP is claimed: all projects need to be costed at full cost. Template spreadsheets have been developed and can be downloaded from the RCIPS website. Your Faculty Finance Office can assist you with preparing full cost budgets 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 Costing of Research Projects 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

12. Research Contracts and IP Services Government Rights Act Non-exclusive, royalty-free, non- transferable, worldwide licence for use by Government for health, security & 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 & 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

13. Research Contracts and IP Services NIPMO Referral / Reporting Four main categories of referrals / reporting, which is undertaken by RCIPS: Intellectual Property that is unwanted by UCT, but is deemed to have commercial or societal benefit – ad hoc Specific ‘trigger’ Funder terms in contracts and certain IP transactions – ad hoc Routine reporting on IP Management – every 6 months Full Cost Model adopted by UCT – every 2 years With referrals, the Act stipulates the period within which NIPMO must respond. If they do not, the permission is deemed granted.

14. Research Contracts and IP Services Referral: Contract Terms Assignment (transfer of ownership) of IP Exclusive license agreements with foreign entities Upfront prior to contract signing: Where outputs will be released into the public domain –e.g. research generating OpenSource software which will be release] – 60 day approval period Licensing not at arms-length / below market value / royalty-free –60 day approval In collaborative research: –Commercialisation on a royalty-free basis – 30 day approval –Research outputs should not be commercialised – 30 day approval Note that licenses for research, development and education (i.e. non commercial use) have no restrictions.

15. 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

16. Research Contracts and IP Services Obligation to Disclose to RCIPS For grants/research contracts falling within the Act, researchers are obliged to screen their work for protectable IP to 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

17. 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

18. Research Contracts and IP Services Contact RCIPS Piet Barnard, Director Dr Andrew Bailey, IP Manager Piet.Barnard@uct.ac.zaPiet.Barnard@uct.ac.za Andrew.Bailey@uct.ac.zaAndrew.Bailey@uct.ac.za 021 650 3865 021 650 2425 Research Contracts & IP Services 2 Rhodes Ave Mowbray reception: 021 650 4015 email: ip@uct.ac.zaip@uct.ac.za www.rcips.uct.ac.za