Bayh-Dole Act, IP, National Research Fund, Research and Development, Science Technology and Innovation Act, South Africa IP Rights from Publicly Financed Research and Development Act, Technology Transfer Offices, University Patenting
“Every Kenyan is an inventor.” – Anon.
With the enactment of the Science, Technology and Innovation (ST&I) Act 2013 (discussed by this blogger here), it is imperative that the central government legislates on the management of intellectual property (IP) emanating from publicly financed research and development (R&D). Such legislation would ensure that IP from publicly funded R&D is commercialized for the benefit of all Kenyans in line with the State’s IP mandate under Article 40(5) of the Constitution. This is also consistent with an increasing awareness in Kenya of IP as an instrument for wealth creation.
In the context of publicly funded research, institutions such as universities can be encouraged through an enabling legal framework to protect and commercialise the fruits of their research. Such a legal framework would, among other things, clearly delineate the rights and obligations of the public funders and the researchers. In support of such legislation, this blogger submits that Kenya’s IP legal framework must reflect a manifest desire to transition from a resources-based economy to a knowledge-driven economy.
In section 32 of the ST&I Act, the National Research Fund (NRF) is established and the Act provides that the Fund shall consist of an initial sum of money amounting to two (2%) of Kenya’s Gross Domestic Product (GDP) to be provided by the Treasury. From an IP perspective, the question arises: when the NRF sponsors R&D leading to patented inventions, for instance, who should own the patents? If these patents are commercially viable, who will be allowed to commercialise them and how will such commercialisation be done equitably and in a manner that does not adversely affect public benefit?
It may have been the above questions that resulted in enactment of two laws in the US and South Africa relating to IP from publicly funded R&D namely, the US Bayh-Dole Act, 1980 and South Africa’s Intellectual Property Rights from Publicly Financed Research and Development (IPR-PFRD) Act, 2008.
In the US, Senators Birch Bayh and Bob Dole in 1980 sponsored an Act that allowed and encouraged research institutions to take title to patents arising from government-sponsored research. Where a research institution elected to take title to government-funded inventions, they must file patents and have written agreements with faculty and staff requiring disclosure and assignment of inventions. The research institutions would also take the lead in commercializing these inventions through licensing agreements with the industry. The universities are required to share a portion of revenue with the inventors and all excess revenue must be used to support research and education.
The Act also provides certain rights and obligations for the funding agencies. The government funder can prevent universities from taking title to patents in “exceptional circumstances”. The government also retained a paid-up/royalty-free license to practice a subject invention owned by a university. In addition, the government retains so called “march-in” rights which allows it to compulsorily license subject inventions for various purposes such as to achieve commercialization, to alleviate health or safety needs etc.
The impact of the Bayh-Dole Act has been an exponential rise in university patenting. In 1980, there were about 495 patents issued to universities compared with 3,278 patents in 2005. Since 1980, American universities have spun off more than 4,000 companies formed around the universities’ research results. According to recent survey data by the Association of University Technology Manager (AUTM), in fiscal year 2012, $36.8 billion of net sales were generated and start-up companies started by 70 academic institutions employed 15,751 full-time employees.
Prior to the enactment of the Act in 2008, it is reported that there were disparate policies on IP ownership and commercialisation and no balance of incentives and regulation. In addition there was an unbalanced relationship in negotiations of IP arrangements between researchers and industry. Finally, it is noted that there was low accountability to tax payers for public spending on R&D.
In 2008, South Africa enacted the IPR-PFRD Act whose preamble reads as follows:-
“The object of this Act is to make provision that intellectual property emanating from publicly finance research and development is:
utilised and commercialised
for the benefit of the people of the Republic of South Africa.”
In 2012, an article in the South African Journal of Science by Prof Anastassios Pouris at University of Pretoria titled “Science in South Africa: The Dawn of a New Renaissance” showed that South Africa had significantly increased its research output between 2000 and 2010. Among the factors cited for the upward trend in South Africa’s published research figures is the enactment of the IPR-PFRD Act. Figures between 2000 and 2010 show that the country has more than doubled its paper publication numbers, from 3,617 in 2000 to 7,468 in 2010. The study argues that this rise in research output is an indicator of economic growth and development of the country and its international competitiveness.
Elsewhere in South Africa, the introduction of the IPR-PFRD Act has been heralded as a significant milestone in empowering local universities in their negotiations with industry partners around research funding and managing the results flowing out of such research. However, there have been some concerns raised about the Act which seem to work against Technology Transfer Offices (TTOs) in a manner that does not support the overall objectives of the Act.
In general, the critics of Bayh Dole and IPR-PFRD state that these Acts promote the commercialization of academia which in effect alters the universities’ research agendas toward profit instead of research, teaching and service. Furthermore it has been noted that there is a misconception that university IP is generally highly profitable and has great commercial whereas the reality is that only a very small percentage of university-developed IP is commercially feasible.
Despite the various criticisms of these Acts, it is clear that they are a powerful tool for Universities and their TTOs in managing IP from publicly funded research. At the very minimum, such Acts increase the accountability to tax payers for public spending on R&D. These Acts also enable innovation in the public interest as well as limiting the ownership of IP by the Government. Regarding the commercialisation of IP, these Acts ensure that IP does not gather dust on government shelves, they also ensure wider dissemination of publicly financed R&D as well as contributing to the growth of businesses.
In subsequent posts, this blogger will examine in greater detail the legal provisions that ought to be included in the proposed IP law for publicly funded research and development.