Intellectual Property Rights from Publicly Financed Research and Development Act 51 of 2008
REPUBLIC OF SOUTH AFRICA
Vol. 522 Cape Town 22 December 2008 No. 31745
THE PRESIDENCY No. 1402 22 December 2008
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 51 of 2008: Intellectual Property Rights from Publicly Financed Research and Development Act, 2008.
2 No. 31745 GOVERNMENT (fAZETTE. 22 DECEMBER 2008
Ad No. 51, 2008 l~lELLECTlIAL PROPERI\, RIGIITS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENf ACT, 2008
(English text signed by the President.) (Assented to 17 December 2008.)
ACT To provide for more effective utilisation of intellectual property emanating from publicly financed research and development; to establish the National Intellectual Property Management Office and the Intellectual Property .'und; to provide for the establishment ofoffices of technology transfer at in...titutions; and to provide for matters connected therewith.
BElT ENACTED hy the Parliament of the Republic of South Africa, as follows:
1. In this Act, unless the context indicates otherwise "BBBEE" means broad-hased black economic empowerment as defined in 5 section 1 of the Broad-Based Black Economic EmpowemlCnt Act, 2003 (Act No. 53 of 2003); "commercialisation" means the process by which any intellectual property emanating from publicly financed research and development is or may be adapted or used for any purpose that may provide any benefit to society or commercial use 10 on reasonahle term'>, and "commercialise" shall have a corresponding meaning; "Department" means the Department of Science and Technology; "disclosure" means the provision of full details of potential intellectual property contemplated in section 5 of this Act; "funding agency" means the State or an orgcill of state or a state agency that funds 15 research and deve]opnlCnt; "institution" meflllS (a) any higher education institution contemplated in the definition of "higher
education institution" contained in section I of the Higher Education Act, 1997 (Act No. lOt of (997); 20
(b) any statutory institution listed in Schedule 1; and (e) any institution identified as such by the Minister under section 3(2); "intellectual property" means any creation of the mind that is capable of being protected by law from use by any other person, whether in lerm; of South African law or foreign intellectual property law, and includes any rights in such creation, 25 but excludes copyrighted works such all a thesis, dissertation, article, handbook or any other puhlkation which, in the ordinary course or business, is associated with conventional academic work;
4 No. 31745 OOVERNMENT GAZETrn. 22 DECEMBER 2008
Ad No. SI, 2008 INTELLECTUAL PROPERTY RJUHTS AWM Pl l l3LICLY F1:-.1ANCPJ) RESEARCH AND DEVELOPMENT Aer. 2008
"intellectual property creator" means the person involved in the conception of intellectual property in temlS of this Act and identifiahle as such for the purposes of ohtaining statutory protection and enforcement of intellectual property rights. where applicahle; "intellectual property transaction" means any agreement in respect of intellec tua! property emanating from publicly financed research and development, and includes licensing, assignment and any arrangement in which the intellectual property rights governed by this Act are transferred to a third party; "Minister" means the Minister responsihle for the Department; "Nett revenues" means the revenue less the expenses incurred for intellectual property protection and commercialisation of the intellectual property, as may be prescrihed; "NIPMO" means the National Intellectual Property Management OOice estab lished by section 8; "otf..,hore" means out.. of this Act until such right expires.
(2) Intellectual property creators at an institution and their heirs are entitled to the 5 following benefit-sharing:
((I) at least 20 per cent of the revenues accruing to the institution from such intellectual property for the first one million rllild of revenues, or such higher amount as the Minister may prescribe; and
(b) thereafter, at least 30 per cent of the nett revenues accruing to the institution 10 from such intellectual property.
(3) The benefits contemplated in subsection (2) must be shared in equal proportions between the qualifying intellectual property creators or their heirs unless otherwise agreed between those creators and the recipient or determined in accordance with institutional policies. 15
(4) The benefits to intellectual property creators and their heirs contemplated in subsection (2)(a) must be a first calIon the applicable revenue ahead of any institutional distribution.
(5) The recipient may distribute the balance of the revenues generated by intellectual property as it deems fit, but must apportion part of it for funding, among other things- 20
(a) more research and development; (b) the operations of the office of technology transfer; and (c) statutory protection of intellectual property.
(6) (a) This section prevails over a provision of a law mentioned in the second column of Schedule 1 existing at the commencement of this Act to the extent that it is 25 inconsistent with such a provision.
(b) Despite paragraph (a), any arrangement relating to benefit-sharing that existed at the commencement of this Act by virtue of a provision contemplated in that paragraph continues in terms of that provision as if this section had not been enacted.
Conditions for intellectual property transaction. . 30
11. (1) The recipient determines the nature and conditions of intellectual property transactions relating to any intellectual property held by it, but must take into account the following:
(a) Preference must be given to non-exclusive licensing; (b) preference must be given to BBBEE entities llild small enterprises; 35 (c) preference must be given to parties that seek to use the intellectual property in
ways that provide optimal bene11ts to the economy llild quality of life of the people of the Republic;
(d) exclusive licence holders must undertake, where feasible, to mllilufacture. process and otherwise commercialise within the Republic; 40
(e) each intellectual property trllilsaction must provide the State with an irrevocable and royalty-free licence authorising the State to use or have the intellectual property used throughout the world for the health, security and emergency needs of the Republic;
(j) if a holder of an exclusive licence is unable to continue with the 45 commercialisation of the intellectual property within the Repuhlic during the duration of the licence and the recipient wishes to retain the exclusive licence, the recipient must furnish NIPMO with full reasons for retaining exclusivity;
(g) a recipient must supply the reasons contemplated in paragraph (/) within 30 days of it becoming aware that the holder of the licence is unable to continue 50 commercialising the intellectual property, or such extended time as may be agreed upon with NIPMO; and
14 No. 31745 GOVERN'MENT GAZE1TE, 22 DECEMBER 2008
Act No. 51, 2008 INTELLEC11JAL PROPERTY RIGHfS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACf. 2008
(h) NIPMO may request that the exclusive licence contemplated in paragraph (j) be converted to a non-exclusive licence if a recipient fails to furnish the reasons within the period contemplated in paragraph (g), or if NIPMO is not satisfied with such reasons.
(2) Each intellectual property transaction must contain a condition to the effect that, should a party fail to commercialise the intellectual property to the benefit of the people of the Republic, the State is entitled to exercise the rights contemplated in section 14.
(3) (a) Each intellectual property transaction involving assignment of intellectual property by an institution to a small enterprise in return for shareholding as a consideration must contain a condition providing that in the event of the liquidation of that small enterprise, the intellectual property shall revert to the institution.
(b) The Minister may prescribe the terms and conditions for other intellectual property transactions involving assignment of intellectual property by a recipient.
Restrictions on offshore intellectual property transactions
12. (1) Offshore intellectual property transactions are subject to the following conditions:
(a) A recipient must advise NIPMO of its intention to conclude an intellectual property transaction offshore;
(b) subject to paragraph (c), offshore intellectual property transactions may occur only in accordance with prescribed regulations and any guidelines contem plated in section 9(4)(e); and
(c) any intellectual property transaction which does not comply with the regulations and guidelines requires prior approval of NIPMO.
(2) A recipient wishing to undertake an intellectual property transaction offshore in the form of an assignment or exclusive licence must satisfy NIPMO that
(a) there is insufficient capacity in the Republic to develop or commercialise the intellectual property locally; and
(b) the Republic will benefit from such offshore transaction.
Intellectual Property Fund
13. (1) There is hereby established an Intellectual Property Fund to be managed by NIPMO.
(2) The purpose of the Intellectual Property Fund is to- (a) provide financial support to institutions for the statutory protection and
maintenance of intellectual property rights, subject to subsection (3); (b) finance any costs incurred by NIPMO for obtaining statutory protection of the
intellectual property; and (c) finance any costs incurred by NIPMO when acting in terms of section 14.
(3) An institution may recover the costs incurred in obtaining statutory protection for the intellectual property contemplated in this Act from the Intellectual Property Fund
(a) to the extent determined by NIPMO; and (b) on such terms as may be determined by NIPMO.
Acquisition of intellectual property rights by State
14. (1) The rights acquired by the State in terms of this section are additional to the rights granted to the State in terms of any other legislation in the Republic.
(2) NIPMO must conduct reviews of non-commercialised intellectual property in consultation with the recipients.
(3) If a review contemplated in subsection (2) shows that the intellectual property in question can be commercialised, NIPMO must engage in further consultations
16 No. 31745 GOVER..~MENT GAZETfE, 22 DECEMBER 2008
Act No. 51, 2008 INTELLECfUAL PROPERTY RIGHTS FROM PUBLICLY HNANCED RESEARCH AND DEVELOPMENT ACT, 2008
with the recipient in an endeavour to ensure that the intellectual property is commercialised.
(4) NIPMO may require a recipient to grant a licence in any field of use to any person on reasonable terms if, after the consultations contemplated in subsection (3)
(a) the intellectual property is still not being commercialised; or (b) no agreement can be reached with the recipient.
(5) NIPMO may, on behalf of the State, demand the assignment of rights to any intellectual property if a recipient fails to make a disclosure to NIPMO as provided for in this Act.
Co-operation between private entities or organisations and institutions
15. (1) A private entity or organisation may become an exclusive licensee of intellectual property emanating from publicly financed research and development undertaken at an institution if such private entity or organisation has the capacity to manage and commercialise the intellectual property in a manner that benefits the Republic.
(2) Any private entity or organisation may become a co-owner of the intellectual property emanating from publicly financed research and development undertaken at an institution if
(aJ there has been a contribution of resources, which may include relevant background intellectual property by the private entity or organisation;
(b) there is joint intellectual property creatorship; (c) appropriate arrangements are made for benefit-sharing for intellectual
property creators at the institution; and (d) the institution and the private entity or organisation conclude an agreement for
the commercialisation of the intellectual property. (3) Should the private entity or organisation mentioned in subsection (1) or (2) not
commercialise the intellectual property, the provisions of section 14 of this Act shall apply with the changes required by the context.
(4) (a) Any research and development undertaken at an institution and funded by a private entity or organisation on a full cost basis shall not be deemed to be publicly financed research and development and the provisions of this Act shall not apply thereto.
(b) For the purposes of paragraph (a) "full cost" means the full cost of undertaking research and development as determined in accordance with international financial reporting standards, and includes all applicable direct and indirect cost as may be prescribed.
(5) For the purposes of this section, private entity or organisation includes a private sector company, a public entity, an international research organisation, an educational institution or an international funding or donor organisation.
16. Employees of NIPMO and the offices of technology transfer may not disclose any information in regard to any matter which may come to their knowledge in terms of this Act, or any work arising from the implementation of this Act, or by virtue of the office held by them to any person, except
(a) in so far as the provisions of the Constitution of the Republic of South Africa, 1996, the Promotion of Access to Information Act, 2000 (Act No.2 of 2000), and this Act require or provide for the publication of or access by the public or any interested person to information relating to such matter;
(b) in so far as it may be necessary for the effective governance and management of NIPMO or the offices of technology transfer, or for the purpose of due and proper performance of any function in terms of this Act; or
(c) upon an order of a competent court.
IS No. 31745 GOVERNMENT GAZETTE. 22 DECEMBER 200S
Act No. 51, 2008 INTELLECIUAL PROPERTY RIGI-ITS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACT. 200S
17. The Minister may make regulations regarding (a) any matter that mayor must be prescribed in tenus of this Act; and (b) any ancillary or incidental administrative or procedural matter that it is
necessary to prescribe for the proper implementation or administration of this 5 Act.
Short title and commencement
18. This Act is called the Intellectual Property Rights from Publicly Financed Research and Development Act, 2008, and takes effect on a date determined by the President by proclamation in the Gazelle. 10
20 No. 31745 GOVERNMENT GAZE1TE. 22 DECEMBER 2008
Act No. 51, 2008 INTELLECTUAL PROPERTY RIGHTS FROM PUBLICLY FINANCED RESEARCH AND DEVELOPMENT ACT. 2008
(Section 1: Paragraph (b) ofdefinition of "institution ")
Institution Founding law HUll ~ Sciences Research Act, 1968 (Act No. 23 of Council
~ Research Act, 1971 (Act No. 34 of 1971)Water Research Commission Council for Scientific and Scientific Research Council Act, 1988 (Act No. 46 of Industrial Research 1988) Council for Mineral Mineral Technology Act, 1989 (Act No. 30 of 1989) Technology Agricultural Research Agricultural Research Act, 1990 (Act No. 86 of 1990) Council South African Medical South African Medical Research Council Act, 1991 (Act Research Council No. 58 of 1991) South African Bureau of Standards Act, 1993 (Act No. 29 of 1993) Standards Council for Geoscience Geoscience Act, 1993 (Act No. 100 of 1993) National Research National Research Foundation Act, 1998 (Act No. 23 of Foundation 1998) South African Nuclear Nuclear Energy Act, 1999 (Act No. 46 of 1999) Energy Corporation, Limited