© CSIR 2012
Adoption of Socially Responsible
Licensing Practices Considerations for South African
Technology Transfer Offices
Rosemary Wolson
Senior Intellectual Property Manager
CSIR Licensing & Ventures
(c) CSIR 2012
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Overview
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Definitions & terminology
SA-specific factors
Institutional culture & policies
Patent filing decisions
Licensing terms
Supportive practices
Metrics & impact
Issues for further consideration
Terminology
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SRL
Humanitarian use
Global access
Social good
Social impact
Public good
Public interest
• What is most appropriate in our context?
– ‘Responsible’ to whom?
– Innovation & technology for development
• Is there a need to prioritise &/or reconcile?
SA context
• Highly regulated system
– SA IPRPFRD Act
• Neutral impact?
– Enshrines certain preferences which promote ‘SRL’
– But takes away some discretion from organisations to set terms of collaboration &
licensing
– Excon Regulations
• Affects assignment rather than licensing
• Unintended consequences
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Broad-Based Black Economic Empowerment (BBBEE)
Public Finance Management Act
Indigenous knowledge & Bioprospecting Regulations
Sub-optimal co-ordination between different departments, initiatives
• Learning curve
– Trying to do it as well as others
• Impact
(c) CSIR 2012
5
Institutional culture & policies
• Organisational philosophy
– CSIR Mandate: ‘To contribute to the improvement of the
quality of life of the people of the Republic’
– IP&TT Strategy
• Dichotomy: Commercial gain v social good
• ‘Technology Transfer for social good is aimed at transferring to the
society, IP and technologies that will contribute towards improving
the quality of life of the people of South African (including poverty
alleviation) at a macro and micro-level. The CSIR may not
necessarily derive any financial returns in social good technology
transfer. The key driver should be in addressing societal needs and
sustainability of the solutions delivered, ownership by the
communities, and use of existing and established infrastructure to
deliver the solutions.’
Institutional culture & policies
• Position & influence of the TTO within the organisation
– Seniority of the director
– Level of support from senior management
– Relationship with the rest of the organisation
• Perceived as enabler or watchdog?
– Strategic objectives of the TTO
• Pressure to be self-funding?
• Activist/agent for change role?
• Setting the research agenda
– Prioritisation
• eg Focus on local priority disease areas or all?
– R&D investment decisions
• Role of TTO in relevant funding allocation panels
• CSIR Growth and Development Strategy, Research Impact Areas, Flagships
• Strategic partnerships
• Impact assessment, monitoring & evaluation
– KRAs & KPIs
Patent filing decisions
• Reduce IP barriers
• Selective patent filing
– Choosing not to file in (certain) developing countries
– Developing country companies can then – in theory - produce the
invention without a license
– Must be sure that this will in fact achieve one’s objectives
• Could prevent companies in developed countries from taking up the
technology all together
• Could reduce interest from developing country licensees who want patent
protection (where there is innovative capacity)
• Access to other technology might be required to practise the invention
• Access to know-how might be required
• Petty patents/utility patents
Reasons not to patent
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Least developed countries
Defensive publication as an alternative
Contributing to ‘patent thickets’
‘Enablers’
– Tools & reagents
Reasons to patent
• Existing innovative capacity
• Existing domestic industry – particularly one which exports in addition to
serving local markets
• Application in both developed & developing markets
• Necessary to induce investment (time to development)
– Private or public sector eg TIA
• Obtain leverage to access other technology or know-how
– Patents as ‘bargaining chips’
– Open up cross-licensing opportunities
• To enable & ‘enforce’ SRL
– Patents as a tool to assist in justifying tiered pricing
• Developed/developing
• Public/private
• Open & proprietary mechanisms can and do co-exist
• Freedom-to-operate considerations
Licensing objectives
• Availability in developing countries
• Affordability in developing countries
• Measures to ensure availability/affordability if licensee does not achieve
necessary outcomes
• Promoting competition
– Balancing access & incentives
• Building in some flexibility to allow for unforeseen and/or changed
circumstances
• Support for innovation & industry in developing countries?
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R&D support & collaboration
Human capital development eg exchange programmes, scholarships
Knowledge & technology transfer – know-how
Development of local industry/local manufacture
Benefit-sharing with communities (IKS & PGR)
Licensing options
• Specify minimum sales volumes in developing countries
– Other milestones
• Humanitarian use
– Reservation of rights for defined purposes &/or markets
– Importance of definitions eg ‘charitable objectives’
• Market segmentation – different terms to apply:
– Developed v developing countries; public v private sector
– Exclusive v non-exclusive/non-assert
– Exclusive (in profitable markets) with guarantees (for underserved
markets)
– Pricing
Licensing options
• Price control in developing countries
– Differential/tiered pricing eg public/private
– Set limits on mark-up – ‘cost+’
– Royalty sacrifice – in full or in part
• Non-exclusive licensing
– Open source, protected commons
• Non-assert clauses/waivers
– Liability to IP holders reduced
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Diligence/performance clauses
Mandatory sub-licensing
Reversion or conversion of licensed rights
Walk-in rights
Licensing options
• Benefit-sharing with communities & providers of plant genetic
resources
– Monetary & non-monetary
• Change of circumstances – need for flexibility
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New uses for unmet needs
Licensee to develop or grant sublicense
Licensee to consult licensor to renegotiate – agreement to agree?
Benefit-sharing provisions to be crafted sufficiently broadly to cover all
developments enabled by the license
• Freedom-to-operate retained by licensor
– For not-for-profit research use
• Licensor
• Others?
– Diagnostic use exemptions/non-asserts
Supportive practices
• Selecting licensees
– Local v international
– Large v SMEs
• Start-ups
– BBBEE
– Preferences in IPRPFRD Act
• Do/should licenses which observe the preferences qualify as ‘SRL’?
• What is a PRO’s role in implementation?
– And what is a TTO’s role in implementation?
– Awareness & education
• Monitoring compliance & enforcing performance-related
terms
– To the extent feasible
• Encouraging open access publishing
• Creative Commons licensing of content
TTO metrics
• Traditional
– Invention disclosures, patent applications, issued patents,
license/options signed, license income, equity, start-ups formed
• Social impact
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Anecdotes/vignettes
Open source licenses
Research tools shared
Benefit-sharing agreements/benefits shared with IK holders
Economic modelling - put a value on social impact achieved
• Estimate the savings generated from implementing a policy recommendation
eg reduced health burden on state due to clean water policy; increased
productivity due to a healthier population
• Demonstrating & communicating impact
– Case studies, success stories
Concerns
• Quality & liability
– Risks especially high in healthcare arena
• Product diversion
– ‘Leakage’
– Illegal exports into countries where the exported
technology will compete unfairly with licensee’s legitimate
rights
• Lack of capacity to exploit the technology
– Need for know-how, capital investment in infrastructure
• Competition/anti-trust
Contextualising SRL practices
• Apply to all technologies or only some?
– Medical/food security/clean energy/environment?
• Terms must be appropriate to the technology and take into account its
value to the licensee, as well as to developing country markets
– Not ‘one size fits all’
• Need to educate licensees – might require ongoing discussions
• Need to grow awareness and get buy-in from other stakeholders
• We’re licensing at early stage – how to influence development of the
technology down the value chain?
– Can we build in license terms to deal with this?
• In a country like SA there are gaps in the value chain – need to identify
these and fill them to ensure a holistic approach
• Need to strike the right balance between social objectives & incentives
What can we do as (South African)
PROs?
• This is not a settled field where practices are set in stone
– Best practices evolving
– Seek & design new solutions
– Share experiences – what works & what doesn’t
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Educate & create awareness
If you don’t ask, you don’t get…
Patent pools, clearing houses, aggregating/bundling
Open innovation
A need for a South African statement of guiding principles?
– Most of the case studies & examples have been driven by developed
country institutions & organisations
– Reconcile potentially competing objectives
Thank you!
Rosemary Wolson
rwolson@csir.co.za
+27-12-841-4301
+27-83-784-3648