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Innovation drives prosperity


he protection of South Africa’s publically-financed Intellectual Property is critical because of the benefits it can bring to the country’s economy and its people. This was the strong message from Dr Val Munsami, Deputy Director-General for Research, Development and Innovation at the Department of Science and Technology. Addressing the opening of the conference on Accelerating IP and Innovation in South Africa, Dr Munsami said the SA government has made increasing investments into research and development. The two day conference has brought together over 30 internationally-renowned experts to discuss a range of issues in IP including how to accelerate commercialisation of innovation in developing countries, among others. The conference is also seen as an ideal platform to discuss the Intellectual Property Rights (IPR) from Publicly Financed Research and Development Act of 2008. “What we want to see is how the country’s IPR Act will benefit the country from both an economic perspective and a public goods perspective.” Dr Munsami said government is committed not only to investing in research and development, but also to leveraging those investments for the greater good of the economy and the public benefit. “So we have to do two things: Firstly, we have to commercialise some of the ideas into services and products. Secondly, we have to take those ideas and use them to benefit communities. There are many examples of how this can be done. For instance, a water purification programme that can be used to benefit local communities who do not have water.” He said the DST has as its vision the creation of a prosperous society that derives enduring equitable benefits from science and technology. “Our mission statement is about developing, coordinating and managing a national system of innovation that will bring about maximum human capital, sustainable economic growth and improved quality of life.” Dr Munsami said the government operates with a “12 outcomes” framework, which seeks to address 12 high-level challenges faced by the country. “These relate to basic education, health issues, economic growth and human capital. “We want to ensure the investments we make talk to government policy. In all we do, we need to recognise the potential value and contribution

Dr Jonathan Youngleson addresses delegates of intellectual property, which is why we have set up the National Intellectual Property Management Office of South Africa (NIPMO) to monitor and promote the objectives of the IPR Act. “By managing the country’s intellectual property, we ensure that the country derives some benefit from it. If one looks at the Intellectual Property Rights Act, one of the critical components is that the government has “walk-in” rights to IP if there is a need for it from an economical and social perspective. It’s not a common practise internationally, but from our perspective it is necessary.” Dr Munsami said while the National IP Management Office of South Africa (NIPMO) currently resides in the DST, the ultimate aim is for it to exist independently and to have as its role, the management of publicly financed IP. “Funding ideas and stimulating public research is vital, as is the protection of ideas,” he said. “Else we end up with the leaky buckets system – where ideas leak out of our country and we miss out on economic opportunities.” Dr Jonathan Youngleson, head of the NIPMO, welcomed delegates to the conference. He said since the White Paper on Science and Technology was published in 1999, IP has been identified as an important issue for South Dr Val Munsami Africa.

South Africans ‘set the bar high’


outh Africans ‘‘have set the bar very high on invention,’’ American intellectual property attorney Sherry Knowles told the first conference panel on Monday morning.

‘‘Of course, the patent rights on fire have probably expired by now,’’ she mused, before urging local delegates to create something as life-changing as fire once they have left the conference. Her comments on the discovery of the world’s oldest cooking fires at the Cradle of Humankind were picked up by audience members during the robust question session afterwards, during which Stellenbosch University legal academic Professor Owen Dean complained that South Africa’s proposed traditional knowledge bill might indeed grant perpetual knowledge protection from generation unto generation. ‘‘Innovation takes guts, it takes some insanity. And you also need a great big dose of obsessive-compulsive disorder (OCD),’’ said Knowles. She then cheerfully asked the audience, ‘‘who here has OCD?’’ before raising her arm. Two members of Knowles’ panel – chief judge Randall Rader and Q. Todd Dickinson, the former US Under-Secretary of Commerce – had spent the previous workday in very illustrious company: with American president Barack Obama,

as he signed the much-debated, long-delayed patent reform legislation. Rader, who is based in Washington, DC, at the US Court of Appeals for the Federal Circuit, confessed that he had been forced to delay his arrival in South Africa to meet with Obama as he signed the Leahy-Smith America Invents Act. Not that Rader was complaining: ‘‘we celebrated the signing of one of the most important developments in our capitol in many years,’’ he said. Dickinson, who is now the executive director of the American Intellectual Property Law Association (AIPLA), was also part of the small group which met privately at the White House with the American president. Both men expressed their pleasure that contentious issues had been worked out, that the courts had clarified law, and that congress had passed it. Dickinson noted that while businesses were happy that the American law provided certainty, the need to harmonise different national intellectual property provisions, increase speed and reduce costs was of major concern to large global companies. Dickinson also provided two interesting statistics. First he noted that the US has just awarded its eight millionth patent, for a prosthetic eye to assist the blind. Then he noted that a quarter of those eight million patents had been awarded in just over a decade, highlighting the rapidly increasing pace of discovery. Two South Africans also contributed to the panel: Judge Louis Harms, the acting president of the Supreme Court of Appeals, and Advocate Mandla Mnyatheli.

Delegates take notes

Chief Judge Randall Rader

‘‘1.5 million years ago, not too far from Johannesburg, fire was invented in this country!’’ said Knowles, a coorganiser of the Accelerating IP and Innovation in South Africa conference and the founder of Knowles Intellectual Property Strategies.

Sherry Knowles Harms addressed the issue of developing intellectual property in South Africa, case by case, despite not yet having a clear policy. The judges? ‘‘Few are technically trained and a few suffer from technophobia. I think at the moment there is one specialised IP judge in the country, and he is due to retire in two years’ time.’’ The policymakers? ‘‘The politicians have to rely on urban legends, on pressure groups and on conflicting data. They don’t have the foggiest idea.’’ The state of the law? ‘‘IP is vulnerable because it is not protected by the constitution specifically. Our judgements can be undone by parliament,’’ Harms said. Mnyatheli, who is the former chief director of the office of company and intellectual property enforcement at South Africa’s Department of Trade and Industry, discussed his efforts to prioritise intellectual property enforcement. Judges could be guilty of downgrading intellectual property infringements because they were a ‘‘victimless kind of crime,’’ Mnyatheli said. He laughed at the idea of educating the judges. ‘‘Whoa, wait a minute, you don’t train judges – otherwise you go to jail. Judges know everything! We had information-sharing sessions with the judges.’’ He advocated prioritising education and awareness over enforcement, at least in the beginning, and using all participants, including law enforcement agents, prosecutors and magistrates.

networking time: a vital ingredient for a successful conference

Research aligned to national priorities


he Intellectual Property Act (IPR-PFRD Act 51) which came into effect in August 2010 was praised by delegates who said it is an effective tool to iron out inconsistencies in intellectual property (IP) management and technology transfer at publicly financed research institutions. The discussion on the ownership and commercialisation of publicly-funded research and innovation and its relevance in an African context was chaired by McLean Sibanda, co-chair of the local organising committee for the conference and leader in the field of IP law in South Africa. He pointed out South Africa’s specific needs such as housing and health that need to be addressed and said that research done should be aligned to these national imperatives. “If IP is not being generated to address these needs, we’re missing the point. The public is requiring greater accountability of the tax spend directed to R & D,” he said. The IPR Act sets out the framework for the management of publicly financed IP for the benefit of the people of the republic and sets outs incentives for institutions and inventors. Sibanda pointed out that industry is still the biggest contributor to IP in the country, with universities only producing five percent. This disparity is in stark contrast to the increasing investment being made by the State into R & D. But, he said, awareness is increasing and it is this aware-

Maclean Sibanda

Dr Jonathan Youngleson ness which will make the implementation of the Act easier. Chief director of NIPMO Jonathan Youngleson explained how South Africa’s resources for IP could be better utilised. “We are spending R12 billion per annum on Balance of Trade on Royalties which is twice what the government is putting into research and development,” he says. “These statistics tell a story about the IP framework for SA.” The new Act with NIPMO’s support is designed to generate changes in a positive direction. Dr Hans Sauer, deputy general counsel for the Biotechnology Industry Organisation in the US highlighted how the Bayh– Dole Act or Patent and Trademark Law Amendments Act, adopted in America in 1980 has revolutionised the biotech industry in the US and the public funding it receives. “The Bayh-Dole Act provided rich return on publicly funded research. Its 30 years of existence has resulted in about 6000 new businesses over the years and 4300 new products in the biotech space,” he said. Dr Ma Jun, director of the Technology Development Office at Tsinghua University in Beijing showed similar experience after their equivalent of the Bayh-Dole Act was introduced in China in 2008. “Research funding and achievements are increasing. Investment has increased by 25 percent since 2008, the number of people working in research increases by five percent annually. To date 202 state

Delegates listen intently

Dr Ma Jun technology transfer centres have been established. A rapid increase in applications for patents have followed the increase of investment from the Chinese government into research and development,” she explained, highlighting the example of Nutech, a large container inspection system developed in her university department which has gone on to be sold in 60 countries and has top market share in the industry. Mahama Ouedraogo, executive secretary for the African Union’s Science, Technology and Research Commission highlighted Africa’s dire need for improvements in IP management. “Research institutions need to strengthen the capacity for undertaking local research in order to inform the policy agenda as well as develop the technologies that could contribute to population development through food security enhancement, good health and improved literacy,” Ouedraogo said.

networking time: a meeting of minds and a place to forge ties

What attracts foreign investment?


here are a number of reasons for the “abysmal” levels of foreign direct investment in South Africa. These include red tape, the country’s exchange control regulations, inflexible labour laws and, to a lesser extent, problems at the Company’s Office.

Alan Lewis

Homi R Khusrokhan

Gordon Myers

Checking the bios

So said Alan Lewis, President, Licensing Executives Society International, during a panel discussion on Accelerating Commercialisation and Attracting Foreign Direct Investment. Calls for nationalisation as well as electricity shortages in South Africa are further prejudicial factors. Another potentially prejudicial aspect, which could become a “poisoned apple”, Lewis said, is the publicly-funded Intellectual Properties Act in terms of which all Intellectual Property which comes out of any research and development using public money is 100 percent owned by the institution. “This could deter our private industry and foreign investors from having research and development done by our local institutions,” Lewis said. “What will happen in the next few years? Will industry turn away from South African institutions and go elsewhere?” Turning to red tape as a deterrent to foreign direct investment, Lewis said in Australia the ease of doing business in 2009 (with 1 as the most friendly) was 9 in Australia, while, in SA it was 32. Lewis cited a range of favourable aspects for foreign direct investment, among them an excellent legal structure, a sound democracy, world class IP laws and good infrastructure. However, in 2009, the amount of foreign direct investment into South Africa amounted to $1,2 billion, as compared to $9,2 in Australia and $94 billion in China. Homi R Khusrokhan, Senior Advisor, Private Equity, Tata Capital Ltd in India said there is a direct relationship between the acceleration of foreign direct investment and innovation and IP development in a country. “A couple of things happen when there is foreign direct investment in a country. When a good funder comes in, it is a powerful signal to others. Investment

brings a pool of talent and ideas.” Among the significant changes which have contributed to India’s recovery were large investments in infrastructure, with the government planning to put $6 billion into this over the next five years. Khusrokhan said the Indian government is constantly striving to make India a better country to do business in, by revising government policies and reducing the regulatory burden. Further factors drawing foreign direct investment were a vibrant stock market, a high GDP growth, despite the global recession, a young labour force, good managerial skills, world class institutes of higher education, and strong IT skills. Jefffrey Q Ke of Win Twin Global Capital, in Shanghai, China told delegates he witnessed the “miracle” of China’s economic growth – from attracting $1,3 billion of foreign direct investment in 1984 to attracting more than $100 billion, the highest in the world. He ascribed China’s success to five major factors – constant government support and flexible policy adjustments; a huge domestic market – which means that companies invest in the country to target the Chinese market; a well educated, businessfriendly labour force; good infrastructure; and attractive capital markets. Among Ke’s recommendations for drawing foreign direct investment are: start small and remain focused on certain regions and certain industries; provide economic incentives to FDI; strengthen education, research and development; open the domestic market to foreign corporations and capital markets to entrepreneurs supported by FDI. Gordon Myers, Chief Counsel, International Finance Corporation, World Bank, said data shows that South Africa is a generally attractive FDI environment for innovation. There is a “skills gap” and a “commercialisation gap” that may offer FDI opportunities, he said. Myers described some investment and advisory mechanisms the IFC can offer relevant to investing in commercialising innovation. He noted that IFC invests on the basis that combines a commercially sustainable approach with identified and measurable developmental goals.

Education is the key


igh quality education which leads to knowledge of intellectual property and its overall economic implications should be a national priority. This was the opinion of Dr Joseph Straus, a distinguished professor on three continents and designated chair for Intellectual Property Rights Management at UNISA, in a panel discussion on education and capacity development for IP.

In a country where education is the most important factor on our road to a positive future, educational institutes have an important role in contributing to IP development and policy. “Schools have two functions: to teach people, in their role as educators of students and IP leaders. They are also incubators for research,” said chair of the panel, John Whealan, associate dean for IP at George Washington Law School in Washington DC. Germany, the US and China have all taken this responsibility to heart in developing programmes for IP education. The Munich International Property Law Centre, established in 2003, is a prestigious GermanAmerican collaboration which calls in the most highly respected IP professors and professionals from around the world to lecture, creating a masters programme of the highest standard. “Everybody who passes is very happy,” said Straus. “It’s an excellent course, but a

very tough one.” With a history of state ownership, China has a short IP history but as with its other industries, IP generation and education is rapidly growing. Already the country has more than 600 law schools and 20 IP schools. This is to meet a mammoth demand – “We have 1.2 million patent applications and 1.07 million trademark applications per year,” explained Guobin Cui, associate professor at the Tsinghua University School of Law in Beijing. South Africa’s standard of IP education is high but its present reach is limited. “Our responsibility as spelt out in the IP act is capacity building and education,” explained Tana Pistorius, acting director to UNISA for Innovation and Technology Transfer. “For progress to be successful, we must train our scientists properly. Education is the most important factor.” Pistorius said IP strategies must be integrated at universities, with consultation from all departments. She added that insecurity and distrust is rife and there is a huge need for education and information in this field. “Researchers may believe the university is going to take something away from them. It’s a hard sell,” she said, suggesting that positive IP case studies could be an excellent tool to illustrate the benefits of good IP management. The African Union has taken it upon itself to improve IP management on the continent. Mahama Ouedraogo, executive secretary of the African Union Science, Technology and Research Commission, says that the establishment of a Pan African IP organisation is in the pipeline with a major focus on building capacity in African

researchers. “Their publishing mentality is bent out of shape – especially because their number of publications is often key in career building. Scientists don’t always put value on patenting, fearing the misappropriation of their ideas.” With only a few models of successful patenting of inventions in Africa, “scientists need to be updated before they are outdated,” he suggested with a smile. They should be taught the basics of IP: how to appropriately document their research, how to deal with collaborations and how to publicly disclose results, amongst others. “Africa as a whole needs to work on making sure that we are taking IP education to another level to help move the IP agenda forward,” said Ouedraogo in closing.

Associate Professor Guobin Cui

Professor Tania Pistorius

Dr Joseph Straus

Strauss added that knowledge and innovation need a proper legal framework which will hopefully be found in the recently promulgated IP Rights from Publicly-Financed Research Act.

Question time

Newsletter by Delegates get to know each other at the pre-conference cocktail party

Accelerating IP and Innovation in South Africa - Day 1  

A conference newspaper for the Accelerating IP and Innovation in South Africa 2011. Facilitated by Hippo Communications.

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