1. Progress in implementing the IPR Act and NIPMO Occasion: Portfolio Committee on Science and Technology Date: 20 April 2016

2. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 2

3. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 3

4. NDP states: “Innovation is the primary driver of technological growth and drives higher living standards”. “Innovation” may be described as a “multi-stage process whereby organisations transform ideas into new/improved products, services or processes, in order to advance, compete and differentiate themselves successfully in the marketplace”. Universally accepted that intellectual property (“IP”) and the associated rights are a critical aspect to innovation and economic growth. Thus, IP holds (at least one of) the key(s) to our future. IP, Innovation and the NDP 4

5. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 5

6. Intellectual property refers to “creations of the mind”. Divided into two categories: –Industrial property (including inventions, designs, plant varieties, and marks or logos); and –Copyright (literary works, music, films etc., as well as computer programs). Intellectual property rights are the “rights given to persons over their creations of the mind”, namely –a patent for an invention –a plant breeders’ rights for a new plant variety; or –a trade mark for a mark. What is IP and IPR? 6

7. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 7

8. OECD Review Science & Technology White Paper Technology Foresight Studies R&D Strategy IPR Policy 10 Year Innovation Plan 2008-18 IPR Act & Regulations Technology Innovation Agency Act NSI Challenges: Existence of innovation “chasm” Fragmentation of instruments Explicit reference to Foundation for Technological Innovation (FTI) The “Knowledge Economy”: Knowledge = Basic form of Capital Economic growth driven by Innovation (Technological) 1996200020022004200820072009/102010/112012/13 8 NIPMO: the implementing office of the IPR Act POLICY EVOLUTION…

9. South Africa is not the first in this regard: –USA:Bayh-Dole Act (1980) –Japan:Technology Licensing Organisations (1998...) –Germany:Law on University Employees’ Inventions (2002) –Taiwan:Science & Technology Basic Law (1999) –UK:IP Ownership Decentralisation Efforts (1980’s) –Korea:Technology Transfer Promotion Act (2000) –Brazil:Innovation Law (2005) –Philippines:Technology Transfer Act 2010 –South Africa:IPR Act (2010) 9 NIPMO: the implementing office of the IPR Act

10. 10 Specialised Service Delivery Unit (SSDU) on 13 December 2013. Head of the unit has powers conferred by legislation. Rely on DST for all corporate and other support services. Protocol approved by Minister and to be published shortly; HR and Financial delegations in progress. NIPMO: the implementing office of the IPR Act

11. OTT capacity building Sector networking and partnership development Advocacy, Education & Learning IP legal advice to stakeholders and third parties Disclosure and compliance IP transaction review for approval Enforcement of IP rights of government Register of IP emanating from publicly financed R&D created by all recipients Grants for IP Protection Costs (IP Fund) Incentives for IP Creators Financial support to promote objects of IPR Act (e.g. IP tools, enforcement fund) Advisory & Support Regulatory & Compliance Fund Management 11 NIPMO: the implementing office of the IPR Act Regulatory and an enabling capacity to execute the IPR Act mandate through three (3) directorates, operating under the Head, with 14 permanent employees (and 6 interns):

12. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 12

13. Purpose of the IPR Act: Provide for more effective utilisation of IP emanating from publicly financed R&D. Establish NIPMO & the IP Fund. Provide for the establishment of Offices of Technology Transfer (OTT’s) at institutions. Legislative mandate… 13

14. Objects of the IPR Act: IP emanating from publicly financed R&D is 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 & BBBEE entities have preferential access. Legislative mandate… 14

15. Application of the IPR Act: The IPR Act applies to all “recipients” of public funding, received from a funding agency, whom use these funds to conduct R&D. Recipients thus include −higher education institutions (26); −science councils, and −SOEs, private individuals, companies who receive public funds. Funding agency is the “State, organ of state or state agency that funds R&D”. Legislative mandate… 15

16. Application of the IPR Act (cont.): The IPR Act was promulgated on 22 December 2008 and put into operation on 2 August 2010 with the publication of Proclamation for its commencement. A presumption against retrospectivity exists. Thus the IPR Act applies to “all IP emanating from publicly financed R&D”, which R&D must have been conducted on or after 2 August 2010. Legislative mandate… 16

17. KEY ASPECTBEFORE IPR ACTCHANGES THE IPR ACT BROUGHT ABOUT IP ownershipDecided upon contractually. Thus government or any local or international private could own the IP, the generated IP being subsidized by the taxpayers purse. IP ownership is legislatively prescribed. There are three ownership scenario’s but in essence he/ she who creates shall own. Thus the recipient, who undertakes the R&D, owns any IP emanating there from. Commercialise/ Utilise the IP R&D outcomes largely ended up in publications in scientific journals. Recipients are the default owners of the IP but now have the concomitant obligation to commercialise/utilise IP emanating from publicly financed R&D for the benefit of society. Publishing and obtaining statutory protection for IP are not mutually exclusive activities. …and changes the legislation brought about 17

18. …and changes the legislation brought about 18 KEY ASPECTBEFORE IPR ACTCHANGES THE IPR ACT BROUGHT ABOUT Database of all publicly financed IP and a regulation of a number of transactions IP emanating from publicly financed R&D could be assigned offshore or locally and thus public funds could subsidise activities that the public may not see the benefit of Approval/reporting requirements are set in place i.e. any assignment of IP now requires NIPMO approval, which approval may only be issued once certain requirements are met which include that the assignment is in the interest of the public. Recipients who have created IP using public funds following R&D, must report to NIPMO biannually. A database indicating the pipeline of publicly financed IP now exists for the first time. State access rights to the IP Access rights to an invention for which a patent has been granted exist under the compulsory licence provisions in the Patents Act. This provision is enacted through an application to a High Court. State rights to the IP are legislated and are applicable to all forms of IP which emanate from publicly financed R&D. This provision is enacted through a Presidential Proclamation.

19. …and changes the legislation brought about 19 KEY ASPECTBEFORE IPR ACTCHANGES THE IPR ACT BROUGHT ABOUT Offices of Technology Transfer (OTTs) Some key research institutions had OTTs for technology transfer and commercialisation of research outputs Legislative mandate that each institution has an OTT which perform certain functions, including provide effective and practical procedures for the disclosure of IP; 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; assess the IP to determine whether it merits statutory protection, and where appropriate obtain protection; Manage revenues due to it from IP transactions and commercialisation; Negotiate and enter into IP transactions; and Reporting obligations in terms of the IPR Act

20. In practice… 20 Basic research Proof of concept Technical development / commercial planning Product & business development Business start-up Business growth Idea Generation IP Office e.g. CIPC NIPMO Public Sector Support Offices of Technology Transfer (OTTs) Private Sector Support R&D is conducted and IP created

21. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 21

22. 22 Pipeline of publicly financed IP (since 2 Aug 10): 1057 disclosures Of which are Active 932 disclosures (88%) Of which have a granted IP right 190 disclosures (18%) Of which have been commercialised 74 disclosures (7%) Exclusive licences 45 Licences granted to SMMEs / BBBEE entities 35 Revenue received by institutions from commercialised IP > R4.4 million OTT Support Fund funding to date R106 million No. of institutions who have received support 28 institutions and 2 regional offices No. of highly specialised technology transfer posts created 85 posts (+19) IP Fund funding to date R83 million No. of institutions who have received support 24 institutions NIPMO activities and services

23. 23 Black (Black, coloured and Indian/Asian) groups together represent between 55% and 65% of individuals within OTTs at HEIs and SCs

24. NIPMO activities and services 24 Nearly two-thirds of the total individuals within an OTT are female.

25. A breakdown of the number of disclosures received reveals that the majority are inventions/ patents as set out below: NIPMO activities and services 25

26. NIPMO activities and services 26 Form type 2012/132013/142014/152015/16 IP1 Form (Referral of IP and release form) 16 (NWU, SU, UJUKZN, UCT, WITS) 14 (NMMU, NWU SU, UCT, WITS) 27 (TUT, UCT, UKZN, UP, UWC, WITS) 50 (WITS, SU, UCT, UP, UJ, NMMU, UWC) IP4 Form (Local assignment) 1 (UCT) 2 (NMMU) 4 (DUT, SU, NMMU & WITS) 3 (WITS/Mintek, CSIR, SAT (UCT)) Institutions are mandated to request approval from NIPMO for certain IP transaction.

27. NIPMO activities and services 27 Form type2012/132013/142014/152015/16 IP5 Form (Off-shore assignment) IP Leakage measure 1 (CPUT) 0 3 (CSIR) 1 (WITS) IP6 Form (Off-shore exclusive licence) IP Leakage measure 0 2 (CPUT and UCT) 3 (CSIR, Mintek, SU) 0 IP8 Form (Referral of IP clauses in collaborative agreement) 8 (SKA, SU, UCT, WITS) 11 (CPUT, NWU, SU, UWC) 11 (NWU, SU, UCT, UP) 13 (SU, NWU, CSIR, WITS, UWC, UCT, NMMU)

28. NIPMO activities and services 28 NIPMO received 45 new miscellaneous queries for the 2015/16 financial year (down from previous years) *Private companies included: Law firms (Hahn and Hahn, Webber Wentzel), Sasol, Water Hygiene Convenience, MIASA, Price Waterhouse Coopers, Citrus Research International and Denel **State owned entities included: Industrial Development Corporation (IDC), Square Kilometer Array (SKA), South African National Space Agency (SANSA), and ARMCSOR (ongoing) PARTIES THAT SUBMITTED NO OF QUERIES RECEIVED Higher Education Institution 14 Schedule 1 institutions6 Private companies*13 State owned entities**4 DST6 Other government departments 2 International organisation 1 TOTAL45

29. NIPMO activities and services 29 Reduction of miscellaneous queries attributable to regulatory tools implemented (incl. 5 PNs and 6 NINs): GuidelineTitleDate of first publication Guideline 1 of 2012 “Interpretation of the scope of the Intellectual Property Rights from Publicly Financed Research and Development Act (act 51 of 2008): Setting the scene” 12 December 2012 Guideline 2.5 of 2015 “Guidelines for the operation of the IP Fund” 31 March 2016 Guideline 3.1 of 2015 “Guideline for the operation of the incentive scheme for IP Creators” 27 March 2015 Guideline 4.1 of 2015 “Intellectual Property Ownership”31 March 2015

30. Informal: WIPO Summer School on IP and TT – 330 individuals (60:40 split for local and international attendees), Workshops - over 500 individuals trained in IP management and technology transfer (including TISC). For researchers: IPWise TM Initiative In excess of 1000 researchers and TT professionals trained in IP awareness; role of the IPR Act; and the commercialisation process. Professionalisation:  SLP and PGD in IP Management & Innovation. NIPMO activities and services 30

31. IP enforcement Fund: Valuation critical for a government- funded/ insurance model. IP creator incentives:Non-monetary incentives including awards (WISA, NSTF) and local and international exchanges etc. Patent attorney/ agent/ Partnership with dti to remedy officer development demographic. program: NIPMO activities and services…in the pipeline includes 31

32. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 32

33. 33  Statistics show the OTTs rarely are self-sustaining and, if so, it takes at least 6 years to get to that point; - Concentrated in a few “big hits”; and - Majority is shared with the inventors  In 2006, 52% of institutions spent more on TT than income received; while 16% covered their costs.  However, 95% of the economic impact of TT is outside the institution in the private sector. IP as a tool for development

34. 34 Dr Kevin Cullen, UNSW IP as a tool for development

35. 35 Generate revenue and create jobs, an international perspective: “Bayh-Dole Act is working” 82 institutions have reported net product sales of $36.8 billion with start up companies providing work for 15 741 individuals

36. 36 Generate revenue and create jobs, an international perspective: IP as a tool for development

37. 37 IP as a tool for development “APPLE is generally regarded as an embodiment of everything that is best about innovative businesses. It was started in a garage. For years it played a cool David to Microsoft’s lumbering Goliath. Then it disrupted itself, and the entire entertainment industry, by shifting its focus from computers to mobile devices. But there is something missing from this story, argues Mariana Mazzucato of Sussex University in England, in her book, “The Entrepreneurial State”. Steve Jobs was undoubtedly a genius who understood both engineering and design. Apple was undoubtedly a nimble innovator. But Apple’s success would have been impossible without the active role of the state, the unacknowledged enabler of today’s consumer- electronics revolution.” Professor Mariana Mazzucato

38. 38 IP as a tool for development Initial Economic modelling activities have revealed: Assumptions: −International benchmark is that the income from IP accruing to the institutions makes up ~5% of the total value derived thus 95% accrued in society with a 50:50 split to financial returns (with a further 75% certainty) and socio-economic returns; −3% of the total portfolio will be commercialised for the first time each new year; and −An 8% discounted growth rate.

39. 39 IP as a tool for development Therefore initial economic modelling activities have revealed: ~R43m may accrue to institutions over the next 5 years Society may benefit in two possible ways: –50% will be socio-economic and other returns through deployment of the technologies e.g. improving quality of life, improving health, environmental sustainability, energy security; and/or –50% will be financial returns, this translates to income of at least ~R400m to industry.

40. 40 SmartSpotQuality (Pty) Ltd: Problem: TB affects 35 million globally. Implementation of the GeneXpert diagnostic machine meant diagnosis occurs outside the lab, however, no means for testing the accuracy of the machine. Solution: Wits University and the NHLS developed TBCheck. The TBCheck spots are used prior to testing the person’s specimen to ensure the machine is working correctly. IP: TBCheck is a patented technology (ZA, US); spin-out registered. Impact: Saved 78 000 test results from being inaccurate. The TBCheck spot cards are currently shipped to more than 20 countries globally. IP as a tool for development: Gauteng

41. 41 IP as a tool for development: Limpopo A method of in vitro propagation of Strelitzia: Problem: No successful mass propagation of some Strelitzia species such as the popular S. reginae, has been achieved by tissue culture. Solution: Researchers at University of Limpopo optimized the in vitro culture conditions to minimise oxidative browning. IP: Patent Applications filed in SA, ARIPO, AUS, IN and Europe. Impact: The method identified is commercially viable and allows for rapid mass propagation of Strelitzia.

42. 42 IP as a tool for development: Free State 3D printing/ additive manufacturing: Problem: Individuals and SMMEs do not always have access to technology providers at an affordable cost. Solution: Technology stations like the one at CUT which has established a Centre for Rapid Prototyping and Manufacturing. IP: Aesthetic and functional designs Impact:Reconstructive surgery of state patients who do not have access to medical aid funds, and who suffer from severe facial disfigurement due to cancer and accidents are receiving reconstructed limbs, facial features etc.

43. 43 IP as a tool for development: Eastern Cape Industrialisation of Iqhilika (Makana Meadery): Problem: The Xhosa people have been making the alcoholic beverage, Iqhilika, from fermenting honey for more than 2000 years but there was no method to upscale this production for market- demand. Solution: Rhodes’ University developed a continuous reactor for the fermentation of honey. IP: A South African patent has been granted. Impact: A spin-out company was created employing 12 individuals and 380 people have been trained as bee-keepers. Markets are established in Switzerland, USA and South America.

44. 44 IP as a tool for development: Western Cape Lumkani fire detector: Problem: Informal settlements are prone to rampant shack fires. Solution: University of Cape Town developed a low cost fire- detection device which is coupled with a radio-frequency alert service. IP: Provisional patent protection filed for and copyright protected in the form of software Impact: Safety, financial security, and quality of life. Company is a virtual organisation with UCT but will be spun out into a company in due course.

45. Overview 1.IP, Innovation and the NDP 2.What is IP and IPR? 3.NIPMO, the implementing office of the IPR Act 4.Legislative mandate and changes the legislation brought about 5.NIPMO activities and services including impact to date 6.IP as a tool for development 7.Challenges in executing the IPR Act mandate 45

46. Resources specifically financial (allocated baseline by NT!) and human constraints internally within NIPMO and within the sector (75% of individuals have less than 5 years experience). Support from senior management (senate, executive etc) in government and in the higher education institutions and science councils for this third stream mandate. Availability of entrepreneurs to take the technology to the market. Derisk funding for technology maturation and legal/ administrative support during NewCo set up. AWARENESS AWARENESS AWARENESS Challenges include….. 46

47. Siyathokoza Re a leboga Dankie Ro livhuwa Thank you Siyabonga Enkosi Ha khensa 47