BlogAcademia
The IPR Act: what it asks of university research
The IPR Act makes a university the owner of what publicly financed research creates, and sets the disclosure, protection and revenue sharing that follow.
On this page
The IPR Act makes the recipient of public research funding the owner of the intellectual property the research produces, and a university is such a recipient. The Act also requires the institution to ensure that its people disclose possible intellectual property within 90 days. That disclosure must come before anyone makes the work public. For a university research group with a promising result, those two rules shape every step that follows.
The route runs through the university's office of technology transfer. That office receives each disclosure and analyses it for its commercial potential. Where the university elects not to retain ownership, it refers the disclosure to the National Intellectual Property Management Office, NIPMO, within 30 days. The creators then share in the revenue their intellectual property earns.
Set out in order, the route shows when to disclose a result and how its revenue reaches the creators.
What the IPR Act covers
The IPR Act applies to intellectual property that comes from publicly financed research and development. Its full title is the Intellectual Property Rights from Publicly Financed Research and Development Act, 2008, Act 51 of 2008. Publicly financed research and development means research and development undertaken with funds from a funding agency, excluding funds allocated for scholarships and bursaries. The Act defines a funding agency as the State, an organ of state or a state agency that funds research and development. The Act's object is that such intellectual property is identified, protected, utilised and commercialised for the benefit of the people of the Republic.
The Act then names the institutions it binds. They include every higher education institution and the statutory bodies in its Schedule 1. Among those bodies are the Council for Scientific and Industrial Research and the National Research Foundation. The South African Medical Research Council is another.
In the Act's terms, intellectual property is any creation of the mind that the law can protect. That protection may come from South African law or from foreign intellectual property law. However, the definition leaves out copyrighted academic work, such as a thesis, a dissertation, an article or a handbook. Where a private entity funds research on a full cost basis, the Act does not apply at all.
Who owns the result under the IPR Act
Under the IPR Act, the recipient owns the intellectual property that publicly financed research produces. A recipient is any person or body that undertakes research with money from a funding agency. The definition includes an institution.
A university may elect not to retain ownership, or not to seek statutory protection. In making that choice, the Regulations ask it to weigh how the intellectual property may contribute to the socio-economic needs of the Republic. The Act then requires it to refer the disclosure to NIPMO within 30 days of that election. Under the Regulations of 2 August 2010, the referral goes on Form IP1 where the intellectual property has commercialisation prospects, can contribute to the socio-economic needs of the Republic, or is to be placed in the public domain. NIPMO then has 60 days to notify the university of its decision in writing. Until NIPMO decides, the university may do nothing except keep the intellectual property confidential.
NIPMO may acquire ownership itself and obtain the protection. Where it does not, the recipient must give the creators the option to acquire ownership. However, a private entity that provided some of the funding receives that option first.
The IPR Act route, from disclosure to licence
The Act and its Regulations set the route in a clear order. Each step carries the provision that governs it.
- The people involved disclose possible intellectual property within 90 days of identifying it (section 5(1)(c)).
- They make that disclosure before anyone makes the work public (section 5(1)(c)).
- The office of technology transfer receives the disclosure and analyses its commercial potential (section 7(2)(b) and (c)).
- The institution decides whether the work merits statutory protection, and applies for it in its own name (section 5(1)(d)).
- If it elects not to retain ownership, it refers the disclosure to NIPMO within 30 days, on Form IP1 where the Regulations require it (section 5(1)(e); regulation 2(4)).
- Once the disclosure has been evaluated and the intellectual property appropriately protected, the researchers may publish their findings for the public good (sections 2(2)(f) and 5(1)(b)).
- The institution reports to NIPMO twice a year (section 5(1)(h)).
A missed disclosure to NIPMO carries its own consequence. If a recipient fails to make a disclosure to NIPMO as the Act requires, NIPMO may, on behalf of the State, demand the assignment of the rights (section 14(5)).
The office of technology transfer
Every institution must establish and maintain an office of technology transfer. Alternatively, it may designate people or an existing structure to carry the office's responsibilities. Either way, that office undertakes the institution's obligations under the Act.
The office receives the disclosures and analyses each one for its commercial potential. It also weighs the form of protection that suits each one. In addition, it refers disclosures to NIPMO on the institution's behalf.
Richnovex works with universities, research groups and technology transfer offices to take research outputs to market, as its work with academia describes.
NIPMO and its support for institutions
The Act established NIPMO, which now sits under the Department of Science, Technology and Innovation. NIPMO gives institutions financial assistance through two funds, the OTT Support Fund and the IP Fund.
Under the Act, the Intellectual Property Fund supports institutions with the statutory protection of their rights. It also supports the maintenance of those rights.
How the IPR Act shares revenue with the creators
The IPR Act entitles the creators at an institution to at least 20 per cent of the revenue for the first R1 million, or for such higher amount of revenue as the Minister may prescribe. Thereafter, the creators receive at least 30 per cent of the nett revenue. Their first share is a first call on the revenue, ahead of any institutional distribution.
The creators share these benefits in equal proportions. They may agree otherwise with the institution, or its policies may decide the split. Under the Regulations, the institution must pay the creators their portion no later than 12 months after it receives the revenue.
Licensing and offshore transactions
When an institution licenses its intellectual property, the Act gives preference to non-exclusive licensing. It also gives preference to BBBEE entities and small enterprises. An exclusive licence holder must undertake, where feasible, to manufacture and commercialise within the Republic.
Every transaction must also give the State an irrevocable and royalty-free licence. The State may use the intellectual property for the health, security and emergency needs of the Republic.
An offshore transaction requires the institution to advise NIPMO of its intention first. For an offshore assignment or exclusive licence, the institution must satisfy NIPMO on two points. Capacity in the Republic must be insufficient, and the Republic must benefit from the transaction.
Disclosure within 90 days comes first
Under the IPR Act, the route to market starts with a disclosure within 90 days of identifying possible intellectual property. That disclosure comes before the work is public. Once it has been evaluated and the intellectual property appropriately protected, the researchers may publish their findings.
