South Africa: Ownership Of Patentable Inventions At Academic Institutions (Part 1)

Last Updated: 28 March 2013
Article by Rachel Sikwane

Most Read Contributor in South Africa, September 2018

In 2008 the government introduced important intellectual property (IP) legislation.  The Intellectual Property Rights from Publicly Financed Research and Development Act 51 of 2008 - which only came into force on 2 August 2010 – governs the ownership and exploitation of IP which flows from publicly financed research and development (R&D). In essence the Act provides that IP that is created in South African universities and research institutions should remain in South Africa, and that it should be used for the benefit of South Africans.  The Act makes it clear that government sees IP as an important driver of economic growth.

The Act achieves its aims in certain ways. It defines IP in very broad terms and it clearly goes beyond patents and designs to unregistered rights like confidential information or trade secrets. The Act creates a powerful National Intellectual Property Management Office (NIPMO), as well as a National IP Fund to help with the cost of IP protection. To make sure that the individual institutions identify, protect and commercialise IP, the Act requires them to establish their own technology transfer offices.

Insofar as IP ownership is concerned, the Act provides that, as a general rule, the recipient of the funding will be the owner of any IP that flows from the R&D. If the institution doesn’t want to protect or exploit the IP, however, it must notify NIPMO, which will then have the right to acquire the IP.  Alternatively, if the R&D was partially funded by a private entity, the entity can be granted an option to acquire the IP. The Act does also make provision for co-ownership in cases where a private entity has contributed both resources and to the creation of the IP, and where it has agreed to share the benefit with the individual/s that co-created the IP, and agreed with the institution on how to commercialise the IP. Lastly, the Act provides that where the private entity funds the R&D on a full cost basis, it alone will own the IP.

The Act then goes on to provide how such IP can be commercialised.  When it comes to licensing local companies, the Act provides that preference must be given to BBBEE companies. It also provides that the state must have a perpetual and royalty-free licence to use the IP anywhere in the world if the country’s health, security or emergency needs require it, and that the state can acquire the IP if it isn’t   commercialised for the benefit of the people of SA.  As for offshore transactions, the Act provides that NIPMO must be given notice of an intention to enter into such an agreement, that NIPMO must be convinced that the IP cannot be adequately commercialised in SA and that the agreement must comply with NIPMO’s requirements.  

In December 2012 NIPMO issued Guidelines on the Act, seemingly in response to the many queries that had been received.  The Guidelines deal with some practical issues. For example, on the issue of just what public funding is, the Guidelines say that money that comes from any of the national, provincial or local government departments or from bodies like the Small Enterprise Development Agency (SEDA) and the Technology Innovation Agency (TIA) is public funding.

The Guidelines give some specific examples:  if Eskom funds R&D at institutions this is not public funding because it uses income from electricity sales and not funds received from National Treasury; similarly the IDC uses income derived from investments; yet the Support Program for Industrial Innovation (SPII), which is managed by the IDC, does use public funds. 

On the issue of R&D, the Guidelines acknowledge that the term is not defined in the Act, but say that it is generally understood to refer to the sum of three distinct activities – basic research, applied research and experimental development. They go on to provide a list of activities that should be excluded from R&D. These include   education and training (excluding post graduate research); scientific and technical information services; testing and standardization; patent and licence work; policy related studies; routine software development; R&D financing activities; and indirect support activities.

As to which institutions are affected by the Act, the Guidelines list all the universities in South Africa, as well as ten statutory institutions. These are the following - Agricultural Research Council (ARC), Council for Geoscience (CG), Council for Mineral Technology (MINTEK), Council for Scientific and Industrial Research (CSIR),   Human Science Research Council (HSRC),   National Research Foundation (NRF), South African Bureau of Standards (SABS), South African Medical Research Council (MRC),   South African Nuclear Energy Corporation (NECSA) and Water Research Commission (WRC).

The Guidelines end with a number of scenarios intended to show just how the Act will apply.  These are far too long to discuss, but they all make the point that, as the Act is not retrospective, it doesn't apply to any IP that was created prior to 2 August 2012, although it might apply to further or follow-on IP created in consequence of IP that was created before that date.

This may be dry stuff, but the Act is likely to become increasingly important.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions