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Tumi Ngqondo
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An important conversation SMMEs should start having

09 June 2014, 13:55

The technological innovation space in South Africa has indeed come a long way. From the 1996 White Paper on Science and Technology a number of initiatives have trickled out, perhaps the most significant up to this point, over and above great initiatives like the SKA has been the introduction of the Intellectual Property Rights From Publicly Financed Research Act, which was promulgated in August 2010 and subsequently gave rise to the National Intellectual Property Management Office (NIPMO). This piece of legislation is there to effectively ensure that all intellectual property emanating from publicly financed research remains in the hands of the public by ensuring that such IP is owned by organisations and institutions that receive such public funds.

The Act has been in place for about 4 years now and all institutions that receive public funds are aware of its provisions and implications on how they should conduct their day to day activities. Indeed, the number of patents filed by public institutions including universities, has increased dramatically since the introduction of the Act, which of course has had positive spin-offs on the national system of innovation and Patent Law firms are definitely not complaining about increased business

The gradual increase of patents has of course come with a number of challenges for an average public institution that receives research funds from the government, the most pressing of those is patent maintenance costs that are forever increasing every year and in the process putting a strain on limited financial resources available in a typical Technology Transfer Office(TTO). This is partly because of the fact that the initial phase of the implementation of the Act had TTOs primarily focussing on ensuring that ground breaking and innovative IP was first and foremost protected and sometimes without necessarily focussing on the commercialisation prospects that it will have in the real economy.

Basically, the initial phase was more administration driven: Inform researchers about the Act, identify potential IP and facilitate its protection, and as more and more IP disclosures came through, less and less time was designated for purely commercialisation activities. Another issue is the fact that, the small number of Tech SMMEs that the country has is not keen to talk to public research institutions most of the time. In these institutions IP portfolios have generally become very big, especially in the research intense ones. Most of these portfolios are now ripe for a more radical phase inspired by a drive to ensure implementation of these technologies to real world applications, and there are endless possibilities for Small Businesses in the country.

This phase should be driven by a more radical and “open” approach towards commercialising intellectual property portfolios that these entities already have in place. One is of course not suggesting that public institutions are not currently engaged in rigorous commercialisation initiatives, but there is a general feeling that there is more that can be done to facilitate access for SMMEs that are already operational as opposed to forming start-ups for every second technology in the portfolio.

What is suggested here is a deliberate, coordinated approach that will revolutionalise the entire technological innovation space in South Africa and how it interacts with SMMEs. I was very happy when the Small Business Ministry was announced as part of the new cabinet and I believe that this could be one of the first things that it can facilitate in liaison with other stakeholders in the space.  South African entrepreneurs, particularly those in the technology sector should start talking to public research institutions, i.e. universities, science councils etc., there are a lot of technologies that can turn their businesses around which are waiting for them in these institutions. In turn Technology Transfer Offices should actively device ways that they can use to ensure that their offices are less intimidating for local SMMEs to come around for a cup of coffee and have conversations about potential synergies between their companies and the IP portfolio that the public institution has.

How would one do this, given the costs of intellectual property protection?, after all, it is not every day that you meet a young entrepreneur who has the muscle to pay, say R100k per year on IP protection costs, which is probably one of the reasons why they are so shy to talk to public research institutions about these things. My suggestion here is that, the government, through an arm like the SMME Ministry (It could be any other ministry that is willing and able) can offer financial relief to small businesses that are working on commercialising public IP by covering patent maintenance costs for granted patents that they are developing. On the other hand and  given the fact that some public institutions may end up abandoning these “un-commercialised patents” as a result of sky rocketing costs, instead of abandoning, they can license these patents to these small companies for “FREE” on condition that, the SMME will start paying once they start making a profit based on the licensed technology. Again, I’m not suggesting that spin-off companies from public institutions are not “SMMEs” enough, these are welcome, this approach on the other hand would give a life-line to “orphaned” technologies that do not have internal inventors that are interested in pursuing in them, due to the fact that, the inventor may have been a postgrad student and has since graduated and left in case of a university or instances where they were staff and have since left the organisation.

So there you have it, an SMME Ministry funding IP protection costs and public institutions providing patents and only expecting payment when the “external” SMME has started making money from the IP. Generally for a TTO, the focus should be split between the “entrepreneurial inventor” and the random entrepreneur scouting for IP that can assist his/her business.

We all know the story about the important role that small businesses can play in eradicating unemployment in this country. This is the ideal set up that would introduce another dimension towards ensuring that publicly financed IP is put into good use, however it depends on open lines of communication between SMMEs and publicly financed institutions.

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