The Government of South Africa recently enacted the Intellectual Property Rights from Publicly Financed Research and Development Act. The Act intends to enable and encourage recipients of government-funding to protect as Intellectual Property and license the results of their research in order to provide incentives for those recipients to work with industry players to commercialize research.
Section 10 of the legislation provides that the creators and the inventors get a portion of the royalty stream generated from the licensing of the invention.
There is a similar provision in the Indian Bayh Dole Bill which is before the Indian Parliament, as per which that inventors receive 30 percent of any royalties stemming from licensing.
The issue of royalty payment has been discussed in an article "Public-funded R&D Bill -- Creating the ecosystem for innovation" in The Business Line in
"The draft Bill seeks to give back to the scientist or inventor, 30 per cent of the revenue from commercialisation of his or her research. About 10 per cent is marked to the public-funded institute's IP Management Cell and the rest of the revenue is ploughed back into the institute. The IPM Cell will help the researcher patent innovative work, besides negotiating with commercial institutions when it is ready to strike.
As in the past, the rights on the research will be with the institute, though the rights to assign will be jointly held by researcher, institute and Government, which largely plays the role of an observer, explains an architect of the Bill.
All research funded by Government comes under the ambit of this Bill that would also cover the several institutes under the Council of Scientific and Industrial Research (CSIR), the Indian Council of Medical Research (ICMR), the Defence Research and Development Organisation (DRDO), the Department of Science and Technology, the Department of Biotechnology, National Institute of Pharmaceutical Education and Research (NIPER), Central and State Universities, Deemed Universities, etc. Significantly, it would cover research in science, drugs, biotechnology, engineering, culture and so on.
Parameters have also been outlined on the royalty that would be paid to the scientist/institute when the patented research gets commercialised, says the Bill's architect. But IP expert Dr Prabuddha Ganguli, who was recently on an international expert team to help draft a similar legislation for
The draft Bill in
WIPO commissioned reports on Tech. Transfer of various Asian Countries in 2003 and they had a set of guidelines for developing models which were divided into 3 levels:
1. National Policy on Intellectual Property and University-Industry Technology Transfer
2. University Policy on Intellectual Property and Technology Transfer
3. Institutional Set-up and Practical Aspects for Technology Transfer from Universities to Industry
They include Income distribution (or royalty sharing) as a part of "University Policy on Intellectual Property and Technology Transfer" and not a part of the National Policy/ Law, that is also Dr. Gangully's view on this issue as was published in an Indian Daily some time back.
Extract from WIPO Guidelines:
"Income distribution (or royalty sharing). Provisions on income distribution (or royalty sharing) are a key element of most IP policies. Income distribution provides an important incentive for researchers to ensure that they disclose their inventions to the relevant body and seek to find the best avenue for commercialization. Provisions on income distribution generally define clearly what type of income is to be distributed and generally applies not just to royalties but to any other lump-sum or milestone payment made to the institution for the commercialization of the technology. Common practice in this regard is that income generated must first cover any expenses related to the protection and exploitation of the IP and the net income is subsequently distributed between the researcher(s), the department, the university, the technology transfer office and/or other stakeholders in percentages that are established in the policy. IP policies often establish revenue thresholds, and the percentage received by the researcher(s) decreases as total net revenues increase. University IP policies may also define how decisions are to be taken on how to split the income when more than one researcher is involved."
Although in an article published on SciDev.net, Shamnad Basheer (Ministry of HRD IP Chair Professor at WBNUJS, Kolkata) said that Indian IP Act would ensure that inventors receive at least 30 percent of any royalties stemming from licensing and the same is a laudable aspect of bill unlike the US Bayh-Dole Act, which leaves royalty-sharing policies to the academic institutions. Their remains to be dispute about the fact that having a mandatory provision for royalty sharing might not be the best of ideas and such specifics should be left to the rules that are made later taking into account in the changing environment or to the judgment of the University bodies, looking to their profits and the best way they can incentivize scientists and researchers to maximize the interest of the institutions.
