Letter on South Africa's IPRs from Publicly Financed R&D Regulations

May 29, 2009 

To
The Hon. Minister of Science and Technology
Department of Science and Technology
Private Bag X894
Pretoria
South Africa
0001 

Dear Ms. Pandor,

The Centre for Internet and Society is a non-profit civil society organisation working primarily in the areas of intersection between the Internet and society to promote pluralism, public accountability, and new pedagogic practices, with particular emphasis on the issues facing developing nations. We work closely with the scientific community in India, even having a respected scientist, Prof. Subbiah Arunachalam, as a distinguished fellow of our Centre.  We have collaborated with, inter alia, scientific organisations such as the Council of Scientific and Industrial Research, the Indian Academy of Sciences, and the National Aerospace Laboratories.  You can find more details about our work at our website. 

We understand that the Department of Science and Technology has called for comments on the Intellectual Property Rights from Publicly Financed Research and Development Regulations.  While many in South Africa have raised serious doubts about the workability of the Regulations, we too, being from a developing country which seeks to capitalise on its scientific resources, wish to register a few serious concerns. 

We have two main concerns.  First, we believe that a law whose main aim is compulsory control of research through intellectual property law is counter-productive and that the unintended consequence of such a law would be an inevitable slowing down of research as productive knowledge gets trapped in a gridlock, unable to be used by other scientists and businesses.  Second, we believe that even if such a statute is to be endorsed, at least the regulations must ensure enough leeway for scientists to contribute to the knowledge commons by promoting open access to knowledge, open innovation policies, open collaborations, and the open source philosophy. 

To start with the law, we refer you to an article written by Prof. Anthony So of Duke University and his colleagues (attached hereto), in which they discuss the non-desirability of importing Bayh-Dole style statutes into developing countries.  They list out multiple reasons for coming to this conclusion.  Amongst others, they point out the problem of patent thickets will arise from multiple universities and research institutes patenting basic research.  Such thickets are especially likely to form in interdisciplinary areas such as nanobiotechnology, microarrays, etc., where researchers and companies willing to bring out products will have to contend with numerous patents from multiple fields, thus leading to products never making it to the marketplace since they become economically unviable due to the number of associated patents and the consequent high rates of royalties.  It must be understood that even if a company decides to go ahead with such a product, the unduly high cost would be borne by the citizens of South Africa.  Such laws also make the faulty assumption that intellectual property rights are the only way to promote innovation and ensure returns on R&D investment.   

The growing instances of embracing of openness and repudiation of patents and other IP as means of promoting innovation must be borne in mind.  In India, the Council of Scientific and Industrial Research, under Dr. Samir Brahmachari's leadership has launched the Open Source Drug Discovery programme.  This programme encourages collaboration and sharing of research as a more efficient way of ensuring that research is converted into products.  A legislation such as the Intellectual Property Rights from Publicly Financed Research and Development Act represents the antithesis of such progressive policies which developing countries are looking towards to spur their advancements in science and technology. 

Further, the experience of many universities and research institutions, including the Indian Council of Scientific and Industrial Research as well as, shows that often much more money is spent in pursuing patents than is actually generated from them.  Thus, technology transfer offices often either just break even or run a loss. 

Additionally, it must be noted that "technology transfer", often cited as a boon of the Bayh-Dole Act, happens quite vibrantly in the absence of intellectual property too. Historically, public research centres have not spent money on acquiring patents, instead choosing to disseminate knowledge through presentations at conferences, publications in journals, and teaching of students.  In fact, the paper by Anthony So et al. quotes both industry as well as donor agencies as opining that technology transfer offices, instead of being gateways to innovation, often end up gatekeepers of knowledge. 

While commercialisation itself is not inimical to research, such commercialisation should a) not be foisted upon researchers and research institutes; b) not come at the sake of public interest.  In this regard, we wish to draw your attention to a book by Peter Mugyenyi titled Genocide by Denial.  In this book Dr. Mugyenyi presents a compelling account of the millions of deaths he believes are directly attributable to profit-seeking by drug companies.  Such profit seeking puts commercial benefits derived from state-granted monopolies in the form of patents ahead of public interest.  Neither the Act nor the Regulations provide sufficient safeguards against such profit seeking.   

One way to do this would be to make the decision of the researcher or research institute to refrain from commercialising the research binding on the  National Intellectual Property Management Office (NIPMO).  Similarly, the NIPMO must have the authority to overrule a researcher or a research institute seeking control under intellectual property law when the NIPMO considers such control to be antithetical to public interest. This would help to accommodate open access and open innovation, two ideas which were the norms earlier and are again finding favour after the hey days of intellectual property in the West.  Another way would be to prevent discrimination in the licensing of intellectual property and thus barring exclusive licensing agreements.  Thus, any party willing to pay reasonable royalties would be able to make use of the knowledge or the technology that researchers have uncovered.  Thus, to ensure that the research is not boxed up with no company willing to pay the demanded royalties, NIPMO must have the power to ensure that unreasonable royalties are not demanded. 

The membership criteria provided for the NIPMO are amongst the worst aspects of the present Regulations.  It is noted that experience in research and development is not one of the requirements for appointment to NIPMO.  Those who have no familiarity with research and development are in a disadvantageous position when it comes to determining the shape of further research and development.  By giving such a role to IP managers and businessmen whose primary interest is generating profit and not furthering public interest, a great disservice is being done to all researchers as well as citizens since ultimately all of them will have to bear the additional costs imposed by exclusive licences and the profits that NIPMO will seek to further, given its current compositional rules. 

The Regulations as currently envisaged create a large layer of bureaucracy which will only end up harming the aims of increased research and technology transfer.  Universities and research institutes will also have to create multiple new offices to comply with the requirements of the Regulations (for instance, to conduct biannual IP audits).  Such centralisation and bureaucratisation of research is to be avoided. 

The Regulations also end up forcing researchers to refrain from taking funding from those donors who have a commitment to openness, such as the Wellcome Trust which promotes open access, and donors who will only fund projects that result in open source software and open technical standards, since their commitments may conflict with the requirements of the Regulations, given that the Regulations seek to promote not just control over research by establishing IP over it, but actually commercialising it too.  While NIPMO has the choice of giving the go-ahead to such projects, it is not required to do so under the Regulations.  This situation should be rectified.  Further, it would end up discouraging inter-country collaborations as the researchers are mandated to independently apply for IP protection in South Africa and in foreign jurisdictions too unless they get special clearance from NIPMO. 

Given all these concerns, we urge you to make substantive changes to the Regulations before bringing them into effect. 

Yours sincerely,

Pranesh Prakash
Programme Manager
Centre for Internet and Society