[A2k] IP-Watch: Proposed Rules On Public Research In South Africa Stir Debate

[Thiru Balasubramaniam]

http://www.ip-watch.org/weblog/2009/06/04/proposed-rules-on-public-research=
-in-south-africa-stir-debate/#more-4201

4 June 2009

Proposed Rules On Public Research In South Africa Stir Debate

By Dugie Standeford for Intellectual Property Watch @ 3:32 pm

Draft rules on intellectual property rights in publicly financed
research are stirring significant debate in South Africa between those
who say the rules may stifle innovation, breach WHO commitments and be
unconstitutional, and others who say concerns are overblown and the
measures are needed to boost the country=92s economy.

The regulations proposed by the government expand the 2008 IPR from
Publicly Financed Research and Development Act, which requires
universities to assess and report on all research that could
potentially be commercially viable.

Under the proposed regulations, if a university chooses not to seek
intellectual property protection, the National IP Management Office
(NIPMO), a proposed body with a staff of experts in IP,
commercialisation and patents, has the right to reassess the decision.
If NIPMO disagrees with the university, it may itself acquire
ownership of the research and IP rights. If, however, NIPMO agrees
with the assessment, the university is free to assign its rights to
the research to the inventor.

Where all direct and indirect costs are borne by a private entity,
research is considered privately funded and not subject to the law.

The Department of Science and Technology published draft rules
implementing the act in April. The comment period ended 29 May. Draft
rules available here [pdf].

Stifling Innovation?

Some have raised concern about the way the government is addressing
the issue.

While research policy and administration are =93not often in the
spotlight, they have important ramifications for education,
development and the economy=94 in South Africa as well as for the
nation=92s =93standing and status in the eyes of the research community
all over the world,=94 the African Commons Project said in an online
petition posted 26 May. The organisation helps communities enter the
digital economy through collaborative technology.

The act is intended to stop results from publicly funded research from
being misappropriated by foreign multinationals, the project said. It
is also meant to measure output from publicly financed research, and
to enable technology transfer from research entities to industry, it
said.

But the negative impact of the regulations far outweigh any benefits,
the project argued. The draft rules focus on the use of patenting and
other forms of IP protection to commercialise research in the
interests of innovation, it said, adding that they are =93hostile to, or
at the very least suspicious of, open source and open processes.=94

The regulations also impose a series of bureaucratic reviews at
institutional and national level before open approaches are possible,
at the discretion of an advisory board that =93appears to be made up of
patent lawyers and business experts,=94 it said. This is at odds with
the way many international research consortia work and will put local
researchers at a disadvantage, the group said.

Researchers do not appear to have any role in deciding the most
effective use of their inventions, the project said. In addition, the
regulations give the government =93intrusive and invasive march-in
rights=94 retrospectively to reverse decisions made by universities, it
said.

Perceived Threat to Health Research

Many of the provisions of the recently adopted World Health
Organisation (WHO) global strategy and plan of action on public heath,
innovation and intellectual property (IPW, WHO, 22 May 2009) directly
contradict the IPR Act and its proposed regulations, said Eve Gray,
honorary research associate at the University of Capetown Centre for
Educational Technology and director of the OpeningScholarship Project.

Among other things, the action plan argues for the support of basic
science including, where feasible and appropriate, voluntary open-
source methods, and calls for identification of incentives and
barriers, such as IP, that might affect public health research, she
said. The WHO recommended more open access to research on public
health, and suggested examining the feasibility of voluntary patent
pools to spur innovation of and access to health products and medical
devices, she said. It also stressed the importance of national,
regional and international collaboration and knowledge transfer, she
said.

By contrast, the act and regulations aim to lock down South African
research, Gray said. The act =93casts its wide net to include potential
IP and patent protection in any legislation in the world,=94 she said.
Databases, research methods, business processes, software and
collaborative research ventures will be subject to scrutiny by NIPMO
to ensure that publicly funded research is kept in South Africa, she
said.

Following enactment of the US Bayh-Dole Act, many US academic
institutions seem to be unduly focused on patenting and licensing
basic scientific discoveries despite the fact that such activities
=93very seldom generate significant financial returns,=94 Loyola
University Chicago Visiting Professor of Law Matthew Herder and Loyola
University Chicago School of Law Vickrey Research Professor Cynthia Ho
said.

The 1980 Bayh-Dole Act allows exclusive control over many government-
funded inventions to be transferred to universities and businesses
under federal contracts for development and commercialisation.

There is evidence that increased patenting, and related licensing,
industry-sponsored research agreements and use of materials transfer
agreements, can slow the flow of knowledge between academic
researchers and hamper the public=92s ability to access technologies
such as diagnostic tests, the law professors said in a 29 May letter
to the South African government. They reiterated concerns raised with
the government by Universities Allied for Essential Medicines and
suggested changes to address them.

While the act recognises a funding recipient=92s right to choose not to
seek IP protection, the mandatory process for NIPMO to review that
decision and decide whether to step in could take over 200 days, the
lawyers said. That is far too long where a recipient chooses not to
seek a patent for knowledge generated by research, not because it has
no commercial value, but because of its =93immediate value to the
research community as a foundational discovery, research tool, or
platform technology,=94 they wrote.

The draft regulations also fail to give publicly funded research
institutions enough guidance on patenting and licensing practices,
including when to forgo patenting, Herder and Ho said. In addition,
the current text will limit the government=92s ability to invoke its
right under the act to use or have the intellectual property used
throughout the world for its health, security and emergency needs,
they said.

Constitutional Issues

The regulations are unconstitutional, Shuttleworth Foundation IP
Fellow and African Commons Project co-founder Andrew Rens blogged on
=93ex Africa semper aliquid novi=94 (there is always something new out of
Africa).

South Africa=92s bill of rights grants a right to freedom of expression,
which includes academic freedom and freedom of scientific research, he
wrote. But the draft rules require the country=92s institutions to
ensure that IP from collaborative agreements is commercialised,
effectively barring them from taking part in multinational research
consortia which have different rules on how research may be used, he
said.

Moreover, those involved in collaborative agreements requiring IP to
be placed in the public domain or given royalty-free licenses must
seek prior approval from the NIPMO, Rens said. Researchers cannot
choose to join the only or the best research consortium, but must
=93cede their academic freedom to bureaucrats=94 fixated on the sole
objective of =93patenting whatever they can,=94 he wrote.

Concerns =93Overstated=94

Some private-sector representatives are supportive of the proposed
regulations, with some possible changes.

In the past, unscrupulous researchers at publicly funded institutions
and private-sector parties often snapped up the results of publicly
financed research and development (R&D), and the resulting IP, at
prices well below market level, to the detriment of taxpayers, said
Bouwers Inc. attorney Theo Doubell.

Bayh-Dole required American institutions to take ownership of the
results of publicly funded research and the rest of the world is
following suit, said Doubell, who responded on behalf of the Licensing
Executives Society of South Africa.

Opposition to the draft regulations and the act itself primarily
centres on their perceived restrictions on the right to freedom of
expression, Doubell said. But the rights to academic freedom and
freedom of scientific research are not absolute and can be subject to
limitations so long as they are based on democratic values, he said.

The act only regulates those freedoms in so far as they relate to R&D
programs funded with public money, he said: =93The Constitution does not
confer a right to state financial support for specific R&D projects.=94

The legislation and regulations could hamper the ability of South
African researchers to collaborate with private-sector entities and
non-resident, publicly financed organisations, Doubell said. The
extent of the impediment will be determined by the =93quality of the
personnel, systems and processes=94 of the NIPMO and the technology
transfer offices envisaged by the act, he said. And, as with the
constitutional argument, the act and rules only limit collaboration in
R&D funded with public monies, he said.

The draft regulations are procedural but many of the concerns raised
are of a substantive nature and should have been brought up before the
act was passed, Doubell said. Worries about the act=92s perceived
negative effects on collaborative research, and the commercialisation
of publicly funded R&D, are =93overstated and are not substantiated
materially by the law,=94 he said.

The legislation =93represents sound public policy,=94 said Yasmin Forbes,
Microsoft=92s South Africa national technology officer. IP protection
for basic research enables commercialisation of the research through
IP licensing, increasing the likelihood that government-funded
inventions will lead to the development of new products and services,
she said. That drives economic growth, employment, exports, foreign
direct investment and tax revenues, she said. Microsoft has suggested
some areas for clarification, she said.

Dugie Standeford may be reached at info@ip-watch.ch.

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997