Intellectual Property Rights from Publicly Financed Research & Development Bill: deliberations & adoption

Meeting report

Intellectual Property Rights from Publicly Financed Research and Development Bill: [B46B-2008] (the Bill: Briefing by the Department of Science and Technology (DST)
Mr Steven Ratsatsi, General Manager: Innovation and Planning Priorities, Department of Science and Technology, apologised for the absence of the Director-General.

Mr Mclean Sibanda, Senior Patent Attorney, Innovation Fund, DST, provided a brief highlight of the Bill’s purpose. There was a need to protect intellectual property (IP) that was derived from publicly financed research and development (PFRD). The Bill provided ways of identifying such IP and required the recipients of the IP to disclose it, and take the necessary measures to ensure that it would be protected. The Bill also sought to ensure that IP was commercialised in a way that would benefit the Republic and its citizens. The Bill required institutions that received State funding to set up offices of technology transfer that would assist in the identification, protection and commercialisation of IP. The Bill also set out the mechanisms for its implementation. It provided for the administrative arm of the Department, the National Intellectual Property Management Office (NIPMO). The role of NIPMO was intended to be facilitative, and it would promote the objects of the Bill.

Mr Sibanda also explained that benefit-sharing between funding agencies and IP creators was also provided for in the Bill. It also addressed the need to incentivise research and development so that South Africa would continue to generate more IP. IP transactions were regulated by the Bill in such a way that the recipients of public funds were given the choice to determine how they would commercialise the IP. The Bill suggested guidelines for small to medium enterprises and BEE entities. There was recognition of IP leakages out of control, but the Bill sought to minimise these by regulating the conditions under which IP could be transferred off-shore.

An IP fund would also be established by the Bill to provide assistance to institutions such as universities and science councils, to enable them to protect IP. More importantly, the Bill provided specific conditions under which the State had rights to IP. Lastly, the Bill provided for situations of co-funding in terms of public and private sector funds, which created a possibility of co-ownership of the IP.

Having set out the purpose of the Bill, Mr Sibanda noted that the Department of Science and Technology wished to propose certain amendments to the Bill. This would involve changes to clauses 4(2)(a) and 10 (1) of the Bill. He noted that the changes to clause 4 were fundamental to the objects of the Bill, whereas the changes to clause 10 were to correct technical errors.

He explained that clause 4(2)(a) would be amended by adding in a last phrase (underlined in the following wording: “A recipient that prefers not to retain ownership in its intellectual property or not to obtain statutory protection for the intellectual property must-make the choice in accordance with the regulations and any guidelines that may be published by NIPMO by notice in the Gazette.”

The insertion of the choice of regulations and guidelines was fundamental to the objectives of the Bill. It could not be left to NIPMO to publish the regulations, as these were meant to be issued by the Minister.

The amendment to clause 10 was intended to correct a grammatical error, and the last sentence of clause 10(1) was to be corrected from reading “…until such rights expire”  to “ “until such right expires.” The preceding phrase had also referred to “for as long as revenues are derived from such intellectual property” which was a repetition of the concept of “until such right expires” so that it was decided also to delete the former phrase and retain the reference to the right expiring.

Discussion
The Chairperson requested the State Law Adviser to advise the Committee on the legal implications of the suggested amendments.

The State Law Adviser responded that the amendments did not cause any legal problems and contributed to a clearer reading of the Bill. The amendment to clause10(1) would not change the essence of the Bill.

Mr M Sulliman (ANC, Northern Cape) asked what the consequence would be if section 4(2)(a) was left the way it was currently worded. He noted that there would be delays if the Bill had to be sent back to the National Assembly for deliberation on the proposed amendment, and questioned therefore whether what was proposed was serious enough to warrant having to send it back.

Mr Sibanda responded that after reviewing its proposal, and in light of the provisions of clause 17 of the Bill regarding the powers of the Minister to make regulations, the Department would not be uncomfortable if the Committee did not make the amendment. The power to make regulations did exist in terms of clauses 17(a) and (b) and this was probably adequate.

Ms J Masilo (ANC, North West) requested the Department to provide members with a draft of the regulations that they had adopted.

Mr Sibanda responded that the Department was in the process of developing the regulations, through a consultative process that would go on over a period of two months. The Department was happy to provide the Committee with drafts whilst this process went on.

The Chairperson asked why a restricted definition of “Department” had been preferred in the Bill. This seemed to have ignored earlier suggestions that the definition of Department should state “Department for Science and Technology” as opposed to “Department of Science and Technology”. The current definition restricted the possibility that might arise in future whereby another Department could assume a function in terms of the Bill.

The State Law Adviser responded that the current definition had been preferred, to conform to current drafting practice. A General Laws Amendment was contemplated that would address the concern raised around the renaming or reconstitution of functions of departments.

The Chairperson requested clarity from the Department concerning the tax implications of the benefit-sharing provisions and the possibility that benefits would be paid in kind, creating possible difficulties.

Mr Sibanda responded that the issue of tax was dealt with in other laws that were specifically concerned with revenue matters. However, regulations could also address that aspect and this would not require any amendments in the Bill. The issue of payment in kind, such as by donating a library, would not cause any problems since there was always a value for such consideration. The benefits would therefore be calculated from the ascertainable value of the consideration.

Adoption of the Bill
The Chairperson read out the Motion of Desirability, which was agreed to by the Committee.

The Bill was put to a vote clause-by-clause

Clauses 4 and Clauses 10 were agreed to, with amendment.

The Committee formally adopted the Bill, with amendments, and considered whether it should be debated in the House. The Committee agreed to issue a statement in the House as opposed to debating the Bill.

Ms F Mazibuko (ANC, Gauteng) asked whether the Bill should be referred to the National House of Traditional Leaders.

The State Law Adviser pointed out that the memorandum contained a clause to the effect that in the parliamentary procedure to be followed, it would not be necessary to refer the Bill to the National House of Traditional Leaders.

Other Business
Ms F Mazibuko (ANC, Gauteng) asked about the status of Indigenous Knowledge in terms of IP protection. She was concerned that a number of local cultural artefacts were being reproduced abroad in places such as China.

Mr Sibanda responded that there was a Bill on the recognition of indigenous knowledge systems for purposes of IP protection, which had been introduced to Parliament by the Department of Trade and Industry. The Patent Act was also being amended for a similar reason.

The meeting was adjourned.