Background

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Background

• It would thus appear that an abundance of natural
  resources is no longer adequate for a nations
  prosperity.
• What is more important today is a nations
  ability to generate new knowledge and translate
  that knowledge to goods and services that can be
  traded and that can benefit society.
• It is in this ability that lies the debate and
  also the need to understand the various facets of
  intellectual property.

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Background (Cont.)

• The discussions on intellectual property have
  even transcended to efforts to find solutions to
  provide access to medicine and health.
• We have also seen an increased focus on the
  protection of indigenous knowledge systems and
  the interface with existing intellectual property
  modalities.

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Background (Cont.)

• More and more developing countries are realising
  the importance of being part of the global
  intellectual property system.
• It is very critical for our nation to be a player
  in what Thomas Friedman in his book The World is
  Flat calls, the FLAT WORLD!
• Various studies, including those conducted by the
  OECD, strongly suggest a correlation between
  levels of RD spend and level of innovation of a
  country and that intellectual property can be
  used as a proxy for the level of innovation of a
  country.

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Economic Scientific Wealth
Source DA King, Nature 430 (2004) 311 (15 July
2004)
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Background (Cont.)

• Thus, with increased investment in RD it is
  important to fully understand how to protect the
  knowledge produced by such RD using conventional
  intellectual property and sui generis methods of
  protection, so as to influence the manner in
  which such knowledge can be fully exploited to
  the benefit of society.
• This should include serious debates on how we can
  use intellectual property as a tool rather than a
  hindrance to providing access to health and
  medicine, particularly in developing nations.

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Some ideas and suggestions

• I want to suggest that this could include
  negotiation of humanitarian provisions on the
  licensing of intellectual property generated with
  public funds, for example.

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Some ideas and suggestions

• By being part of knowledge generation, the
  intellectual property rights that can be obtained
  in respect of such knowledge can be creatively
  and usefully leveraged by developing countries
  such that they contribute to reduction in the
  cost of medicine, where such intellectual
  property rights arise, for example from publicly
  financed research or strategically structured
  contract research.

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Further illustration of the issue

• The Business Day on 19th July 2007 ran an article
  with the following headline Patent loss, dip in
  sales hurt Pfizer earnings Lipitor sales plunge
  13.
• Apparently this drug for cholesterol is now off
  patent and competitors have reduced revenues that
  this drug was bringing for Pfizer.
• On the other hand, the loss of patent protection
  and accompanying revenue losses have contributed
  to loss of jobs and factories closing by Pfizer.

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Patenting in developing countries

• Particularly in developing countries, it is
  important that the focus on knowledge generation,
  intellectual property protection, and
  exploitation be aligned with national
  imperatives, such as access to health, food
  security, energy security, and the like, so that
  developing countries can be meaningful
  participants in the global economy.

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Recent trends in Patenting

• Increasingly more and more companies around the
  world, are creating patent pools, which are
  essentially consortia of at least two companies
  agreeing to cross-license patents relating to a
  particular technology.
• The creation of patent pools can save patentees
  and licensees time and money.
• This is more prevalent in the electronics sector.
  
• Although this is a hotly debated field owing to
  the competition law issues it poses, it is
  important that developing countries, and publicly
  financed research institutions, in particular,
  pursue such a strategy for managing and
  exploiting intellectual property.

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Further illustration of the issue

• The July 2007 edition of Managing Intellectual
  Property (MIP) reported that Microsoft and LG
  electronics are to cross-license their patents in
  a deal that will see the US software company make
  a net payment to LG.

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Recent trends in patenting

• Other examples that strengthen this argument are
  the growing number of patents that have been
  licensed with humanitarian provisions, such as
  for example, Yales stuvidine (d4T) widely used
  antiretroviral drugs.
• Yale negotiated a price cut, which immediately
  reduced the price of this drug in Africa by
  almost 40.

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Patenting within South Africa

• Some recent work that has been published by the
  Innovation Fund and to be officially launched
  during the first week of September entitled The
  State of Patenting in South Africa provide some
  important lessons for South Africa. The report
  concludes that
• At least 50 of the patents filed at the South
  African Patent Office are filed by foreigners.
• Thus there is a need for South Africa to be very
  focused on protecting the knowledge created
  through various research and development
  initiatives

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Patenting within South Africa

• The major private sector companies in South
  Africa adopt a portfolio approach to patenting,
  in support of their core businesses.
• his is well illustrated by the patent landscape
  map SLIDE which shows a clustering of patents
  belonging to Sasol Group of Companies around
  chemicals and fuel with PBMR starting to grow a
  portfolio of patents in nuclear technology.

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Patent Applications (EPO, US, WO 1994 -2005)
with ZA priority
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Patenting within South Africa

• None of the universities or science councils in
  South Africa has managed to build a significant
  patent portfolio, which could be used to spurn
  out new industries.
• A portfolio not only provides strong fences
  against competitors, but also provides a strong
  negotiation position, in respect of access to
  markets and other complimentary technologies and
  be used to negotiate strong collaborations with
  others players.
• This work calls for more focused efforts on IP
  management in order to ensure that IP develops to
  economic development.

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Some Recent DST initiatives

• Our focus as DST on IP has been
• In the 2002 RD Strategy released by the DST,
  which emphasises the importance of intellectual
  property.
• In particular, the RD strategy clearly
  identifies the need for South Africa to have a
  formal policy framework for intellectual property
  protection of publicly financed research and also
  to establish a dedicated fund for protection of
  such intellectual property.

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Some Recent DST initiatives

• In December 2005, Cabinet approved a draft Policy
  Framework for intellectual property from Publicly
  Financed Research, for broader consultation.
• In June 2007, Cabinet approved the Final Policy
  Framework and draft legislation.
• The draft legislation has been published for
  public comment.

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Some recent DST initiatives

• It is important that the final legislation
  provides an enabling environment for intellectual
  property creation, protection, management and
  commercialisation.
• In this regard, the DST will endeavour to make
  such revisions of the draft legislation as is
  appropriate to achieve this, as informed by the
  various comments and inputs already received from
  stakeholders.

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Some Recent DST initiatives

• Of further importance is that the legislation
  will provide, amongst other things, the
  following
• greater clarity on the ownership of intellectual
  property generated from publicly financed
  research
• definite and clear obligations attaching to
  ownership of intellectual property

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Some Recent DST initiatives

• Of further importance is that the legislation
  will provide, amongst other things, the
  following
• clear benefits for researchers to disclose their
  inventions to the institutions, including access
  to skills and funding to commercialise such
  inventions
• a framework for capacity to be established to
  ensure that South African institutions have the
  ability to timeously identify, protect, an
  commercialise intellectual property arising from
  research being conducted at the institutions.

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Some recent DST Initiatives

• Intellectual property protection is often an
  expensive exercise, which competes with other
  priorities for resources.
• In this regard, in 2004, the Innovation Fund, an
  instrument of the DST managed by the NRF, in
  accordance with the vision embodied in the RD
  Strategy, established the Patent Support Fund, as
  the Intellectual Property Fund to provide
  wholesale subsidies to institutions for patent
  costs incurred in respect of intellectual
  property arising from publicly financed research.

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Recent DST initiatives

• To date, this fund has disbursed in excess of
  R10m to subsidies some R25m spent by publicly
  financed institutions on intellectual property
  protection in the period 2003 - 2005.
• The DST has committed R3.5m towards the
  establishment of a fully searchable patent
  database to be housed by the Department of Trade
  and Industrys CIPRO.
• This initiative should make intellectual property
  information accessible to more South Africans.

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Concluding remarks

• Thus, as we discuss intellectual property issues
  in this forum, it is important that we start to
  educate the masses of our people about
  intellectual property matters.
• Without any doubt, there are merits on the
  debates such as open source systems.
• However, such debates cannot be fruitful until
  such time as a greater part of our nation can be
  able to meaningfully participate in all different
  types of debates on intellectual property.

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Conclusion

• Patenting in developing countries is a must
• We need to take note of recent developments in
  patenting and their implications for developing
  countries.
• Take note of recent developments in the South
  African IP landscape
• Patent fund
• IPR bill

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Conclusion (cont.)

• Thank you for your patience