Clipdc day02

ISSUE 02

INcentivising innovation S

outh Africa is lacking a culture of incentives.

This was the opinion of Tana Pistorius Professor of IP and Information Technology Law at UNISA , speaking on the second day of the CLIPDC conference, currently underway in Durban.

Pistorius spoke passionately about introducing better methods of leveraging IP for better technology transfer among innovators and aspiring entrepreneurs. “There are only a few countries internationally with strong legal regimes that gives incentives to employees. We can stimulate innovation through incentivising, and currently our local economy is lacking that ability not only in policy but in culture.

The panel moderated by Conference Co-Chair and NIPMO Consultant Dr Jonathan Youngelson, all argued various points of whether technology transfer offices are actually benefitting entrepreneurs in the South African context, and threw some light on measures that could be introduced to make this possible.

While incentives could be one way of stimulating creativity and successful cultivation, the consensus among panellists was the need for better support from private sector to spur development in this arena.

Pistorius said that “angel investors who are a commonplace in the developed world, need to be encouraged and developed further here in South Africa to provide a platform for aspiring entrepreneurs” to successfully communicate ideas and leverage technology transfers for to innovate in better conditions.

Section 12 J of the Income Tax Act in South Africa allows for major benefits for investors through direct exposure to the rapidly growing venture capital (VC) sector, whilst offering up to 40% tax relief on the investment.

Youngelson advised investors to take advantage of this and for entrepreneurs and inventors to be aware so that they could leverage this allowance when approaching funders.

Another key point discussed was the definition and role of IP. Director of the Intellectual Property Unit at the University of Cape Town Dr Tobias Schonwetter was unequivocal in his response. “IP is much broader than trademarks, copyrights and patents. Is it true that the Global North is more innovative than the Global South?

The metric of measure here is the number of patents a country has. I don’t think that this shows that the North is more innovative than the South. The number of patents is not the correct metric to measure innovative activity.”

His view was supported by Jaci Barnet, speaking on behalf of SARIMA, who also expressed frustration with

By NAZAREEN EBRAHIM

the patents having to drive innovation. “Why are we doing technology transfer? Because we cannot just ignore it. It is essential in knowledge economies but it does not mean that we need to follow the same procedure as the US and UK, but we need to be aware of it.”

The new Techno-Preneurs Program (a partnership between the CIPC and the Technology Innovation Agency) launched at the Gala Dinner on Monday evening, aims to ensure that innovators in the technology sector and more will be able to register on the database and post their ideas. This may be the first concerted steps to leveraging technology transfer in South Africa, a developing nation, to assist with inventing and entrepreneurship.

A green-hearted bunnykat made from upcycled materials was presented to Hon Derek Hanekom, SA Minister of Science and Technology, by Sanabelle Ebrahim of the Green Heart Movement at the CLIPDC conference on Monday. BunnyKats are fast-becoming recognised as cultural signifiers of Green Heart City Durban. The delightful creatures are made by the Woza Moya crafters of Hillcrest Aids Centre. As an innovative activation, the citizen-based Green Heart Movement aims to position Durban as Green Heart City, just as New York is known as The Big Apple and Paris as The City of Love. Cape Town has the Mountain, Johannesburg has the Brixton Tower and the mine dumps, and now Durban has the BunnyKat, following on from earlier but disappearing symbols of bananas and rickshaws. Photo courtesy Mikhail Peppas

Success is built on Partnerships

WORD ON THE TWEET Mixo Fortune @4otune: “How will you make money” or “what is your business model” are some of the common questions ALWAYS asked when pitching #clipdc #entrepreneur @NazareenE: RT @MwenaFilu: Role of IP in transitioning from resource to knowledge based economy: insightful lessons from all panelists #CLIPDC @MSF_southafrica: RT @MsfJuliaHill: #CLIPDC opening remarks: let’s use discussion & debate to create best IP policy possible for SA @ FixPatentLaw Mwena tweets @MwenaFilu Role of IP in transitioning from resource to knowledge based economy: insightful lessons from all panelists #CLIPDC Mixo Fortune @4otune “Innovation should do more for the majority with as little resource as possible” ~ Dr Yonah Seleti #clipdc @dstgovza Julia Hill @MsfJuliaHill Mr. Ncwana of @the_dti talking SA IP policy at #CLIPDC. Says that SA needs to have a more workable compulsory licensing system #FixPatentLaw Barry Tuck @BarryTuck About to judge the Pitching Session at #CLIPDC... R100k in prize money to invest in entrepreneurial ideas. Call me Dragon!

Socially Acceptable @SocialyAceptble Afternoon Breakout session to discuss Leveraging Technology Tech Transfer in Developing Countries #CLIPDC pic.twitter. com/wlI7fxNvOa Irfaan Khota @IrfaanKhota #CLIPDC `Do well by doing Good`’,`Regard IP as a Strategic Resource` (panel: TRANSITION TO A KNOWLEDGE BASED ECONOMY AND THE ROLE OF IP)

T

he pharmaceutical industry, which had traditionally been “integrated” with the big companies doing everything from research to manufacture internally, has undergone a revolution over the past decade, says Roy Waldron, Pfizer’s chief IP counsel.

“When I joined the industry there used to be hundreds of projects going on at any one time,” Waldron told the CLIPDC conference in Durban yesterday, adding that the current world economy had forced a rethink on the big pharmas.

“If you are going to invest a billion dollars in developing a new drug then you can only do a few each year and we now look to externalise expertise,” he said.

Waldron was one of the panellists in a session entitled “Leveraging available IP at corporations to jumpstart new ventures in developing economies”, which looked at how big corporations are increasingly using outside expertise and entering partnerships, including with start-ups and universities.

There were some things that pharmaceuticals “do not do well” and Pfizer was increasingly seeking partnerships with universities and creating hubs and building bridges outside of the big pharmaceutical companies.

“This is giving new life to smaller companies that have finance but no assets. It may be a product that may work, but needs further investment to bring to market.

Spinning ventures that did not fit the company profile was a well established practice for Dutch electronics and engineering giant Philips, according to Maaike van Velzen.

Mixo Fortune @4otune “Innovation should do more for the majority with as little resource as possible” ~ Dr Yonah Seleti #clipdc @dstgovza The Innovation Hub @InnovHub Nov Intellectual Property is an important aspect of the innovation value chain.start-ups get educated on the value of IP. #CLIPDC

Roy Waldron

By RAY JOSEPH

“One way was to mobilise people within Philips to start their own company; we have many examples where people from Philips have taken IP and started out on their own,” she said.

The company also actively sought people who were prepared to licence its IP and they were then given “inhouse support. “You need to do this because just giving them patents will not get the best results ... it’s also about know-how sharing,” said van Velzen, adding that Philips did not “burden” people in such relationships with the costs of patents. ““We also allow access to our IP in a non-exclusive way to give them a head-start.”

It was important for big companies to check whether there were “kernels” of IP which were not being used.

“We have an open approach and encourage people to look into our IP,” she said, adding that much of this was freely available and listed with contact details of people within Philips to follow up with.

Morne Barradas, Sasol’s lead IP advisor for risk and compliance, said the company had “embarked on the road” to make its IP more accessible – “but we are still taking baby steps on this.”

Once each year Sasol goes through its IP profile and “prunes” it because of anything that could either be lapsing, or if they were disbanding in some jurisdictions.

For governance reasons this IP was first offered to other Sasol business units. If there was no uptake they could be offered through its chemcity (crc) programme, an enterprise development vehicle which supports entrepreneurs with all facets of business development and helps them take their ideas to market.

“This programme is focussed on best practice, knowhow and infrastructure sharing ... we help them jumpstart their ventures” she said.

Sasol had also established centres of excellence at several universities, supplying equipment and allowing them leverage off the company’s corporate knowhow.

“We have a lot to learn from them and have started building bridges and it is simpler if we can build these bridges from both sides,” she said.

Foreign Patents set to flood market B

usiness players in South Africa

By SUE SEGAR must become far more aware much are patents owned by of the importance of IP in the public-funded institutions really globalized economy. Sooner or commercialized?” later, some 4000 registered patents In his address he provided a from foreigners in SA will become number of measures which should be effective – and “one should not wait considered in South Africa in order long as they will soon be kicked out to put IP more under the spotlight in of the market.” terms of business.

This was the message meted out Providing an anecdote, he

by Professor Joseph Straus (NIPMOsaid: “When I flew last week from UNISA IP Chair, IP and Innovation Johannesburg to Cape Town, my Management, University of South neighbour was the owner of a few Africa) yesterday. factories in Johannesburg. So I Straus was speaking during asked him, what about patents and the plenary session, How Can he said, “well, we had some, but it Developing Countries Transition was cumbersome and expensive to From a Resource- to a Knowledgemaintain, so we really don’t care based Economy and What is the Role that much.” of IP? “I think this is a situation which The IP system in South Africa is disregarding the changes in the was being under-utilised, probably globalized economy under the new because the system was cumbersome, world economic order established Straus said – but he stressed that under the WTO,” Straus said. more use should be made of it.

Turning to the Intellectual Citing statistics from 2011, but Property in publicly funded which were still pertinent today, he institutions, Straus said he had said SA patent office currently has asked a former student of his, who “some 5296” registered patents. now runs an IP portal in Hong Kong “Of those, 1000 are of South (IP Exchange), to put some of the African origin. portfolios on his portal to see if So a country of 50 million people there was any market interest. One has 1000 registered patents in its company had put more than 1000 own country.” patents onto the portal, while the Straus compared these figures CSIR had also put more than 1000 with those cited during the on. conference on Korea, which, he said, “In the end there are 3800 patents started at a low level but which had on this portal and there have built up to having about 120 been more than 314 000 000 patent applications in views. the country – “their own “What does it patent applications and mean? Those are not from abroad.” large companies “The most – these are important thing is to universities make business aware and research of the importance of institutions.

IP in the globalized Those 3800 economy.

Straus, patents from who is also publicly funded Professor of Law institutions at Universities of in SA are Munich and Ljubljana practically not and Professor of exploited at all.”

George Washington “This means that Law School, said a vital the co-operation question to ask is how between industry and much co-operation is going universities does not on between universities look very intensive to and industry in South say the least.”

Africa.

Amongst the “Another measures question is Professor Joseph Straus how

suggested by Straus were: * Make private business aware of IP importance in the globalized economy; * Provide incentives for creativity – tax benefits etc; * Consider special rules on employees’ inventions; * Incentivize internal systems for rewarding creative minds in companies – for improvement proposals etc; * Start developing necessary foundations for the examinations systems – less for examination reasons than for generating a sufficiently broad layer of technically skilled patent specialists; * Provide necessary funds and human resources for monitoring the fate (infringement, use etc) of publicly funded patents; * Provide statistics on IP court cases, not only on court decisions but also in- and out-of-court settlements; * Exploit all available possibilities offered by the law enforce – orient yourself on case law of other countries – before considering changes and amendments; * Consider the introduction of a grace period and research exemption of a general type, not only of Roche Bolar type safe haven.

Speaking during the same session, Professor Ruth Kiraka, Dean, School of Research & Graduate Studies at Strathmore University (Nairobi), provided an East African perspective.

Kiraka said an IP audit conducted in Kenya in 2006 had found that, between 1990 and 2003 (a period of 13 years) SME’s had filed about 116 patents, large companies had filed about 45 patents and research and development institutions, including universities had filed about 50 patents.

“Those numbers are very depressing. It is not good. The interesting thing is when you talk to institutions they appreciate the importance of IP and patenting as a contribution to the knowledge economy.”

Kiraka said a key factor was that many countries in the region were putting less than 1 percent of their GDP into research and development.

“If we do not have a vibrant research and development culture in a country, we won’t have much happening in terms of patenting,” she said.

Diana de Mello shows materials prodced for Brazil:s education campaign

public must be educated about patents I

gnorance about the value of intellectual property and a need to educate all members of society, from political leaders down to the man and woman on street, are essential for innovation and growth to take root in developing countries.

This was the consensus of a panel that discussed the need to educate the public - who often chose cheaper, inferior goods in favour of more expensive original brands - about the importance of IP. “Brazilians are very creative but, if we say innovation is bringing something to market, then we are not doing well,” said Diana de Mello, coordinator of the Brazilian IP Program for Industrial Innovation.

She said a major campaign has been launched to educate Brazilians from all walks of life about the value of IP and the need to protect it as part of a national programme to kick-start innovation.

The programme has adopted a multi-pronged approach to the problem and has produced a wide range of educational literature aimed at all levels of the society, ranging from policy makers and judges to students and journalists and ordinary Brazilians.

In South Africa, corporates are best equipped to defend their IP and it is a far bigger problem for SMMEs, according to Peggie Drodskie of the SA Chamber of Commerce and Industry.

By RAY JOSEPH

“’There is a lot of ignorance among consumers about the importance of IP ... and by consumers I mean the public, labour, government and business,” said Drodskie. “IP is not really recognised, nor how it contributes to the economy and drives growth, encourages research and development in agriculture and improves food security.”

Another argument for strong protection was the ease with which it was now possible for hackers to steal information and IP. Drodskie said it was important to begin education about IP at an early age, suggesting that “we start talking about it while youngsters are still at school.

In a university context it was important to adopt a multi-pronged approach to educating students and the staff and management of universities about IP, says Jaci Barnett, the director of Innovation and Technical Support at the at Nelson Mandela Metropolitan University in Port Elizabeth.

“We have run some intensive courses for researchers and post graduate students, but we need to keep up the momentum and ensure we get the message out there, she said.

The university had received some government funding and was focussing on small business and runs breakfast and work sessions where participants were introduced to the concept of IP

and innovation.

Angela Nwaneri, Associate Patent Counsel for Johnson and Johnson, said she believed that IP is an essential element of development. “What is the alternative to patenting? Keeping it hidden under your pillow?”

“But if you believe that knowledge is built on knowledge and no-one is creating anything new, then patenting is not the real issue. But look at the iPhone ... it is a miracle that it ever came to market. But it would never have made it to market without all those patents behind it.”

In India 95 percent of medicines are not covered by patents, says Nwaneri, adding the rider “...so no one is producing them.

“Often a patent sparks something the IP holder never thought of but to move from research to the knowledge based economy you need patents,” she said.

Angela Nwaneri

Using innovation to accelerate health care research I

nnovation is being used to accelerate health care research and development (R&D) across Africa.

Dr Ellis Owusu-Dabo, Scientific Director at Centre for Collaborative Research in Tropical Medicines in Ghana explained how health care R&D is about investigating innovation, equity and human rights.

While donor funding was welcome, he said, “donor driven research can be ‘skewed’. That will affect the research agenda and regional and national health priorities.”

He called for more collaboration and support for better advances in research and development in healthcare.

“Drive research in innovation. Invest in people. We need to encourage young ones to continue with research.”

One organisation which is heeding the call is PATH which pushes innovation with continued research and development in healthcare. “PATH aims to bring health technologies to those underserved especially in developing countries. One of the critical factors for success is in the partners we select to work with us,” Dr Ponni Subbiah said.

As the Global Programme Leader in Drug Development at PATH, Subbiah explained that accelerating innovation with healthcare R&D is about understanding local needs; working with investigators and research centres in the

By NAZAREEN EBRAHIM

developing world to access local knowledge. “This enables a top down approach and helps develop products that are demand driven.”

In an example of a partnership which has borne fruit, Subbiah cited the example of the tiny square labels on vaccine vials, from which a “practitioner could tell if label colour changed that the vaccine hadn’t been stored or transported properly. This came from food industry.”

“How do we become much more efficient in drug development?” she asked, imploring the audience of academics and researchers to push the cause of finding smarter and efficient ways to speed up drug development and delivery.

Emory University Senior Vice President and General Counsel, Stephen Sencer emphasised the importance of technology transfer and partnership. “For knowledge to be applied in service of humanity, it must be transferred out. It is not Technology Transfer Exploitation or Technology Transfer Manipulation but Technology Transfer Offices,” he said.

Sencer was adamant about the importance of “seeking protection in IP. We need to protect IP because the only way to effectively partner is good protection over IP.”

A solar powered lamp in a plastic Coke bottle to light up Africa, an innovative system to harvest power from running water, another which extracts energy from trash and a uniquely African writing and spelling tool.

These were some of the pitches by 10 entrepreneurs vying for a share of the R100 000 prize money put up by Janssen Pharmaceuticals, a division of Johnson and Johnson that ended day two of the CLIPDC conference in Durban.

Other ideas included a business to extract energy from waste, an app to collect experiential taxi data an eco-tourism business that connected people around the world with indigenous craftsmen and women living in deep rural areas of Africa and a fully equipped mobile science lab for rural schools that can be wheeled between classrooms.

The first prize winner will receive R50,000, second R25,000 and third place R15,000 and the remaining R10,000 being shared amongst the best exhibits by the competing entrepreneurs.

Each entrant had five minutes to pitch their ideas to a panel of judges, who then had some tough follow-up questions about revenue models, competitors and other questions about their businesses.

The budding entrepreneurs will now have to sweat it out overnight while judges deliberate. The winners will be announced just before lunch today.

No clear answers in legal battles over patents W

hen it comes to resolving complicated Intellectual Property problems in the legal domain, do not expect clear-cut answers from the courts.

This was the resounding conclusion reached yesterday during the session entitled Recent Global Patent Cases and their Implications at the CLIPDC conference, currently underway in Durban.

The panel discussion featured IP case scenarios from around the world, including some of the big “seed” cases in the US and Canada, as well as compost relicensing and pharmaceutical patent issues and the complexities involved in resolving their technological aspects.

The panel comprised Hans Sauer (Deputy General Counsel, Biotechnology Industry Organisation), Ms Angela Nwaneri (Associate Patent Counsel, Johnson & Johnson), Dr Saudin Mwakanje (School of Law, University of Dar es Salaam, Tanzania), Dr Isaac Rutenberg, (Director, Centre for Intellectual Property & Information Technology Law, Strathmore Law School, Strathmore University, Kenya) and Professor Joseph Straus (NIPMO-UNISA IP Chair).

In a thought-provoking presentation, Rutenberg referred to the specific complexities of applying IP to the software arena.

Rutenberg described how, in the US, there had been several about-turns on whether or not software could or could not be patented.

“In 1972, the Supreme Court first heard a software patent type case and decided software could not be patented.

“Then in the 1980, another Supreme Court case decided you should be able to patent software …”

By 1998, software patents were generating tons of work for people, he added.

However, by 2008, the thinking was that patenting software was “not a good idea at all”.

By 2010, in the well-known Bilski case relating to the patenting of method claims, they decided that “maybe software patents were not such a good idea,” Rutenberg summarised.

“The problem is every time they come up with a test or decision on how to patent it, the clever patent lawyers in the software industry tweet what they are doing and change how they are claiming and the Supreme Court has to decide all over again.”

Rutenberg said in the past year, the Federal Circuit, the patent court in the US, had heard another case, the CLS Bank case where, “out of ten judges hearing the case, they issued seven different decisions and three different approaches were taken.

“Within those seven decisions taken, none of them got majority support. In a nutshell, they said that the computer systems implementing a method are not patentable… at least within the realm of what they were claiming in CLS bank.

So a lot of people have ignored this and it is now up for appeal.

Rutenberg continued: “That was first example of the federal circuit really putting the breaks on software.”

This Is applicable to Kenya, Rutenberg continued, because, although fewer than five patents were issued every year, there was a realistic need for some kind of patenting in the realm of ICT. “A lot of research and innovation happens in ICT. Kenya has been recognised as the world leader in mobile

By SUE SEGAR

banking and nobody has patented mobile banking in Kenya.

“But if you go and search in the US patent office you can find hundreds literally hundreds of patent applications devoted to mobile banking applications.”

Rutenberg said the eligibility of software patents was, currently. very contentious. “The laws in most East African countries and in Europe say no software patents per se but, in Europe, they still have software patents.”

Rutenberg said patent cases in Africa are extraordinarily rare. When they do happen they are usually within IT tribunals or arbitration panels and largely not available to the general public Panel moderator Roy Waldron (Chief IP Counsel, Pfizer) concluded that there were no real clear-cut answers on all technical problems when it came to the courts.

“When you bring IP problems to court there seems to be the impression from the public, practitioners and clients that you will get a clear-cut answer that, once and for all, answers questions about the issues and what the patent law means.

“But what we are seeing is competing policy views by various judges and various tribunals and courts that arrive at different results and different jurisdictions even in the same country. “These are questions that have not really been answered. The question about whether software is patentable or not is a big question because … sometimes the courts decide differently as they waver back and forth between protecting and not protecting it.”

Waldron added: “What we are also seeing is that when the courts veer away from deciding disputes and start making policy decisions you get a very complex landscape.”

Dr Isaac Rutenberg

Grey area for software code as Protected IP S

outh African laws are almost nonexistent when it comes to the protection of software and code. This was the opinion of Unisa’s Professor Tana Pistorius who added that, “we are very unsure in South African context. In the last 20 years, no one has been taken to court based on software infringement.”

The Chairperson of the NIPMO Advisory Board was on the panel to discuss Global Trends and Opportunities for Computer Software and IP at CLIPDC yesterday.

South African patent laws exclude computer software as an invention.

Protection in terms of the South African Copyright Act is very limited with subject matter being covered in the source code, on-screen layout, or any characters or animation forming part of the programme.

Pistorius said that, “Our South African copyright system is a little bit out step with the rest of the world.”

The only real direction we have in terms of jurisdiction on software use is ”if you are a software developer, and you develop for Government department, it needs to be open source and proprietary. This criteria forms part of procurement policies”, explained Pistorius.

The panel also offered the American, Kenyan and European view on patenting and copyrighting software and code in particular.

The European and US approaches with copyright and patents on

By NAZREEN EBRAHIM

software are very similar. Speaking on behalf of multinational Phillips Group Innovation, Maaike van Velzen noted how the company is constantly approached by software developers, in the European context, who want to patent their software innovation.

“Computer programmes are not considered patentable subject matter as most innovation can have software as a component. There are many questions to consider including how accessible will it be? Is it easy to reengineer? Who will use it?”

Software in the US is not patentable.

A mathematical algorithm is not patentable. “The implementation however is patentable,” said US IP strategist Brent Bellows. He stressed the importance of copyrighting any software idea or code if devised in the US. “Register for copyright immediately. File it with the Library of Congress. It gives you certain statutory rights when filed.”

While the US will emphasise the importance of making an effort to copyright every software idea, the view back in the Global South varies slightly. Dr Isaac Rutenberg of the Strathmore Law School in Kenya recounted the story of popular mobile money application M-Pesa.

“Everyone created M-Pesa. This story shows how the laws are almost non-existent in a context like Kenya where Patent laws up until 2001

Tana Pistorius

stated ‘no software and no business methods’. They have since revised the law but excluded ‘software’, however there is still no direction on whether code or software application can be patented.”

The common question that’s been thrown at Rutenberg from developers: “What’s the best method to distinguish myself in the market?”

“Branding,” he says. “It is a much more effective method of gaining market share and claiming ‘Intellectual Property’”. With open-source options and evolution in technology, patents on code or software applications are almost not worth the cost, as most members of the panel agreed.

Branding is the largest promoter of code and mobile applications.

Meeting, networking, building connections

This newsletter was produced by the team at HIPPO. www.hippocommunications.com