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Parallel Importation Prohibition and the ‘Politics of the Copy’ in Africa

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IMG_2200The Copyright Amendment Bill of 2017 currently undergoing the consultative process in South Africa, proposes overturning the longstanding prohibition against parallel importation provided for in the present South African legislation, an action that could undo more than a century of colonially-based market manipulation.

Clause 11 of the 2017 Bill proposes the insertion of the following Section 12B into South Africa’s Copyright Act:

12B.
(1) Notwithstanding anything to the contrary in this Act, the
Trademark Act, 1993 (Act No. 194 of 1993), and the Counterfeit Goods
Act, 1997 (Act No. 37 of 1997), the first sale of or other transfer of
ownership of a transferred original or copy of a work in the Republic or
outside the Republic, shall exhaust the rights of distribution and
importation locally and internationally in respect of such transferred original or copy.’’

This proposed revision in the Bill draws attention to a longstanding issue that is not only a matter of copyright law, but also overdue for attention in the context of the fierce student protests that have been raging in South African universities in the #Rhodes Must Fall movement with its demands to #Decolonise the University, as well as raising questions relating to #FeesMustFall student activism that challenged the high cost of education, including the cost of textbooks. In student debates the questions that have arisen are why textbooks are very much cheaper in some countries than in South Africa, and why our students are not able to buy these books in South Africa for these cheaper prices? Also, what implications does the prohibition of parallel importation have for the fragmentation of trade in African publications across the different countries on the continent? Finally, how would this affect the South African publishing industry?

Reviewing parallel importation as an issue in international publishing reveals its very colonial origins and the extent to which this colonial manipulation of the market still lingers.

What does this mean in relation to the publishing industry – especially in Africa – and the international trade in books? What is meant by the ‘first sale’ and the ‘exhaustion of rights’? What are the implications of ‘exhausting the rights of distribution locally and internationally’? And what are ‘territorial rights’? In particular, what would all this mean in terms of the pricing of books, and greater accessibility to affordable publications for students and general readers?

These issues can be unpacked by reviewing what was at stake in a US court case concerning the sale of books imported into the US from the Far East at considerably cheaper prices than the US  prices for the same books. It was this case, in fact, that led to stronger demands for the right of parallel importation – the right for the free trade in books across national borders.

Kirtsaeng vs Wiley (2013) – a Case that Changed the Playing Field

The decision to effectively move for the abolition of parallel importation prohibitions in South Africa has thus almost certainly been influenced by the judgement in the US Supreme Court case of Kirtsaeng vs Wiley, delivered in March 2013, which at long last overturned a much overlooked but controversial aspect of global trade in copyright goods, long entrenched in US (and UK) copyright practice – the question of first sale rights and exhaustion of rights in international territorial deals negotiated between large US publishers and developing world markets.

The long persistence of this prohibition in the copyright legislation of ex-British colonies and the US is essentially a colonial hangover involving mostly large UK and US publishers using the imposition of nationally-based differential pricing as a way of maximising profits across the world.

The Kirtsaeng case involved a Thai student, Supap Kirtsaeng, who, when he arrived in the US, found that his college textbooks were absurdly expensive compared to the same books in his home country. So he contributed to funding the cost of his studies in the US by selling Wiley textbooks that he had purchased legally in his home country. The fact that the books were cheaper was the result of territorial rights deals struck between US and Asian publishers. These deals would have involved transactions governed by contracts – rather than copyright law – between the originating publisher in the US and the local publisher.

In such a deal, the US publisher – in this case, Wiley – would have authorised the right to reprint a set number of titles of a particular book in order to create a local edition of this title. Or it could have been a matter of printed books from Wiley  US provided in bulk. The foreign publisher buying these rights would be able to set a price for a local edition that was considerably lower than the US publisher’s price and yet was profitable for the company concerned.

This is what is meant when publishers talk about ‘territorial rights’ – the segmentation of the market in different territories – a matter of contractual agreements rather than copyright law. Part of the deal would have been the prohibition of sales beyond the agreed licensed territory, both through the rights contract signed between the two parties and quite probably also enshrined in national legislation prohibiting ‘parallel importation’.

A territorial deal such as this one is manipulating international copyright law and treaties in more than one respect.

  • First of all, copyright is granted automatically when someone creates a work, and this copyright is recognized and enforceable in any country in the world, according to the Berne Convention. Copyright is global, not segmented locally.
  • Secondly,  the copyright owner has monopoly rights over the work, but this is subject to a limitation – control is only granted on the first sale of a book. Once a customer has bought a book, or another copyright product, under copyright law the purchaser is free to re-sell it and the courts would reject attempts by publishers to exert control over that sale.

The term used is that of ‘exhaustion’, a ‘technical term used to denote the concept that, once a copyright holder has sold or distributed goods then the rights conferred by copyright, patent or trademark do not give the copyright, patent or trademark holder the right to control sales of the goods which she herself has authorised’ (Rens 2010; 54). These are also referred to as ‘first sale rights’ – once a copyrighted work has been sold, the copyright owner can no longer claim rights over subsequent sales. It is the right of the purchaser to sell second-hand copies.

Kirtsaeng was sued by the US-based global publisher Wiley, at first successfully, until the Supreme Court reversed the preceding judgements in 2013, with some harsh words for the US publishers’ expectation that it was their right to control global pricing to enforce different prices in different regions of the world, trying to block trade in these lower-priced products across other countries. One comment by the judges was that second-hand car sales across different countries would become impossible if such conditions were applied, given the quantity of copyrighted computer code contained within modern cars.

This practice is also in extreme contrast to the plea by Francis Gurry, the Director-General of WIPO, for a world that could not only provide a seamless global environment for copyright and the trade in creative goods, ensuring that creators can be rewarded for their work, but could also leverage the potential for digital media to democratize culture. The point is that the fragmentation of markets caused by this practice runs counter to the fluidity and flexibility of modern markets and their technologies.

An Imperial Hangover

This hierarchical relationship in the publishing industry in the English-speaking world has its roots in an imperialist/ colonial hangover entrenched in the early 20th century. Early copyright law in the colonial context incorporated ‘Imperial Copyright’, which assumed British control over publication and dissemination in the colonial empire, even after the independence of the countries concerned. In this way, local copyright legislation in colonial subject territories functioned also to protect British copyright interests when ex-colonies, such as South Africa, drew up their own copyright laws in the form of ‘His Majesty’s Imperial Copyright Act’, as the 1911 Act was named. The purpose was to protect and perpetuate the dominance of British goods across all its dominions.

The ongoing history of this story of colonial dominance is quite extraordinary in terms of the casual assumptions that underpin it. In 1947, an updated version of this ‘ownership’ of colonial markets was entrenched in the British Traditional Market Agreement (BTMA). The agreement, which addressed the growing rivalry between the long-established British publishing industry and the threat of the burgeoning US industry, laid out an agreement brokered by British publishers that they would not license American publishers’ books for the British market unless rights were also granted to all the colonies or former colonies of Britain, regarded as Britain’s ‘traditional market’. In other words, Britain behaved as if it ‘owned’ its colonies and ex-colonies and their markets. An American publisher granting a publication licence to a British publisher would have to extend this licence to these territories, or there would be no deal.

In the same way, a British publisher licensing the UK edition of an African publishers’ title would often insist on the ‘rest of the world’ rights, or there would be no deal, something that lingers on to this day.

It is also interesting to note that the date of the BTMA, shortly after World War II, places these events on the same time scale as the early foundations of British dominance of the commercial scholarly journal system, laid out by Robert Maxwell and the British Information Services in Berlin, after World War II  Control of scholarship and communications was clearly an important strategic imperative in a changing high-technology post-war world, where knowledge was becoming ever more valuable.

In the longer run, as the US publishing industry grew in size and strength this continues as an unspoken agreement in which the British claimed a traditional right to markets in its ex-colonies and the US could operate in the large US market, its dependencies and the Philippines. The ‘rest of the world’ was an open market.

What needs to be acknowledged now is that any provision for copyright and international trade has to take into account that the world has changed even further and that the book industry is operating in very different circumstances as print and digital publications move towards greater worldwide integration of different media, with very rapidly changing business models. This makes it even more important to have an open system of international trade in the creative industries.

The End of the BTMA – A Shift to Contract

The BTMA became the subject of an anti-trust investigation by the United States Department of Justice in 1974. It was formally ‘terminated’ in 1976 by British publishers, who subsequently and vehemently insisted that there was no longer a ‘gentleman’s agreement’ to divide up the world markets in this way. However, both sides largely continued these practices through individual licence agreements and contracts, and through the mutually agreed practices of the British and US branches of multinational companies, so that the pattern persisted until at least the end of the 20th century. The prohibition of parallel importation in the copyright legislation of the ex-colonies became an important tool in these practices.

Essentially, two dominant publishing powers had agreed to carve up the world market between them, formally or informally. These practices also represented a shift from copyright to contract and licence to control international markets.  The anti-competitive aspect of these practices has been vigorously debated in the context of the patenting practices and the ‘evergreening’ of patents in the pharmaceutical industry, and territorial limitations – or ‘geoblocking’ – on the release of digital products, but much less in publishing.

The history of the BTMA is illuminating, therefore, because it was simply the most overt form of a scheme that persists into the present: the leverage of scarcity market models for market dominance and the maintenance of high prices wherever possible through a system of ‘territorial rights’. Yet very few people have paid much attention to this.

Rather than pricing products at the median price across markets and trying to attain affordability, together with economies of scale, the publishers preferred to preserve price levels that were as high as possible in their richer Northern markets and then, if desirable or necessary, negotiate special deals for larger markets which could not pay the premium price. In these markets, predominantly in South and East Asian markets, profitability was achieved through very high volume sales at low prices.

The problem of Emerging Economies

In the copyright laws of ex-colonial countries, South Africa included, these territorial practices are protected by the prohibition of parallel importation, carried over from the concept of  ‘British Imperial Copyright’. This provision, not required by the WTO’s TRIPS Agreement, prohibits the importation of goods licensed by the originating publisher in one country, into another country.

This essentially violates the principle of exhaustion of rights after the first sale, substituting it with ongoing contractual control of price and distribution by the originating publisher. Hence the problem with a South African bookseller wanting to buy the much cheaper Indian editions of US and UK university textbooks into the South African market. The Indian publisher would also face a clause written into the contract for the Indian edition, limiting sales to an agreed territory – in other words, the first sale exhaustion of rights was being over-ridden by contracts and PIR provisions in national legislation.

The Background – What is Parallel Importation?

For those unfamiliar with the terrain, the question of parallel importation arises (when it comes to copyright goods, rather than patented products) at the boundaries of copyright law and commercial practice across international markets. It has to do with the granting of ‘territorial rights’ by one publisher to its own subsidiary, or to another publisher in a different country in order to allow for differential pricing related to affordability in the market concerned, as in the Kirtsaeng case.

These rights are not, in fact, part of copyright law, as the copyright that – according to the Berne Convention – is automatically granted to the author when a work such as a book is created, is recognised and enforceable in every country that has ratified the convention. That applies to most countries in the world. These deals are very dependent on market size. Given the size of the Indian market, the cost per copy is likely to be low and the selling price much lower than the British publisher price, but still allowing for profits for both parties, given India’s population of around 1,4 billion people. An African market may face the same level of need, given poverty levels, but cannot offer the same market size in a single market.

The way in which the differential pricing in these deals is protected is generally provided by a legal provision written into national copyright legislation that prohibits ‘parallel importation’. This means that items – in the case that we are studying, primarily books – made in one county under licence from a copyright holder, cannot be sold by booksellers, publishers or other individuals in a second country if that country has parallel import restrictions (PIR) in its legislation (as is the case with most ex-British colonies). This is not a matter of copyright law, which, as we have seen, is global in its scope. Nor are these provisions required by the Berne Convention or TRIPS.

For those unfamiliar with the terrain, what this meant in practice was that as a result of restrictions on parallel importation, a country like South Africa could not buy the much cheaper Indian edition of the UK or US textbook licensed with a much cheaper sales price in India, for example, with its huge market. Instead, in a country facing protests from students about the cost of education, South Africa had to buy the massively more expensive UK editions of international textbooks.

In recent years the most vociferous objections started to arise from US college students, enraged at the high prices they have to pay compared to their fellow-students in Asian countries. This began to have a serious impact on the college textbook sales in the US and internationally, in a context of rising levels of resistance to purchasing books, together with the growth of digital open textbooks.

The Potential Impact on Publishing Across Africa

These practices also give pause to reflect on the state of cross-country publishing in Africa, in the context of a colonial legacy of illogical national boundaries imposed by colonial powers in the wake of the Berlin Conference on 1884.

In Africa, the market for books has been fragmented by decades of territorial licensing between African publishers and British and US publishers. If an African publisher has a title with potential in the wider market, it will most often be licensed to a UK publisher, who would claim ‘rest of the world’ rights, while other African countries would have to buy this UK ‘world’ edition rather than the original African edition. And so, in the 1990s, after the end of apartheid, the African Literature department at a South African university often found itself having to provide photocopies of prescribed novels by African authors, as they were simply not readily available in South Africa, or only on special order at unaffordable prices, because British publishers were often reluctant to bother with distribution in as small a market as South Africa, or because the international edition was simply too expensive.

Instead, International Student Editions, discretionary lower-cost editions – but more expensive than the Indian versions – are offered by UK and US publishers for some of the larger-volume titles in these markets, and for the rest, students have to pay the full US or UK price for their textbooks – something applying particularly to upper-level specialist textbooks, which tend to be excluded from international rights or discretionary price reductions in these smaller markets.

The questions of the first sale and the exhaustion of rights mentioned addressed in s12B of the new South African Copyright Bill will effectively undo the prohibition of parallel importation that currently protects these practices and will allow booksellers to order books from the countries and editions that offer the best value.

While the major powers in the international English-speaking publishing industries have long regarded these practices as a natural right, it is interesting to note the tone of the Kirtsaeng vs Wiley judgement, which draws attention to the wide-ranging implications of the overriding of first sale rights in a world in which manufacturing of print and electronic goods takes place across the globe and in which IP rights pertain to a wide array of products. ‘[T]he Constitution’s language nowhere suggests that [the] limited exclusive right should include a right to divide markets or a concomitant right to charge different purchasers different prices for the same book, say to increase or to maximize gain’, the judgment argued.

From an IP perspective, this industry manipulation of territoriality raises the further questions of first sale rights and the exhaustion of rights at a national level in the context of the rise of new media and changing market circumstances. The ‘first sale right’ that was at the heart of the Kirtsaeng case is the right of the purchaser of a copyrighted product to own it fully once it has been legally purchased. This means being able to sell it to someone else, lend it, rent it, or give it away. Thus, you can sell not only a book, but also a CD, or a car stuffed full of computer programmes that you have legally purchased; a library can lend books without worrying about where they were manufactured, and video rental companies can hire out movies. These are free of PIRs. Why are books different? the judges in the Kirtsaeng case asked.

An International View on the Abolition of PIRs – the Case of Australia

Now, with South Africa proposing the abolition of PIR from our copyright legislation, and the Productivity Commission in Australia producing yet another report that argues for the lifting of parallel import prohibitions on books, a closer look is needed at the impact that this has had in other countries: will it lead to higher prices, or set up a more competitive local industry at a time of very rapid digital change? And what impact has the Kirtsaeng case had on changing practices in international trade?

Although publishers (and Australia is no exception in this regard) have tended to raise vehement objections to the lifting of restrictive copyright practices, the questions that have to be asked require a realistic evaluation of the likely impact in the light of current market circumstances. First of all, book markets are currently made up of a mixture of print and digital products, so that a consumer already has the choice to buy a book from a local bookseller, or order a digital version from an overseas provider. The supply chain includes services for printing on demand across national borders, with a digital file in one country being printed – via Lightning Source, for example – in another. Altogether, market possibilities are expanding, but PIRs could threaten this, as is witnessed by the conflict about the international pricing of Kindle books.

The biggest fear of publishers appears to be that the removal of PIRs would be that the market would be flooded with very cheap goods, to the detriment of the local publishing industry. The Productivity Commission, after an extensive financial analysis of the market conducted by Deloitte in 2012, concluded that, in a comparison between New Zealand, which removed PIRs in 1998 and Australia, this appeared not to be so. Overall, the finding was that Australian booksellers could have sourced and supplied international trade titles from overseas for less than what they were charged for by Australian distributors and publishers. This at a time when Australian book prices were between 20 and 33 percent higher than the UK for the same titles. Another finding was that ‘PIRs ‘impose an implicit tax on Australian consumers that largely benefits foreign copyright holders.’Most of all, however, it would be very instructive to evaluate whether there would be greater potential for the expansion of publishing across southern Africa, with the removal of PIRs and the potential for greater cross-country collaboration for market growth using mixed-media strategies.

Overall, it looks as though the abolition of PIRs would be of benefit, rather than harming the book trade and its customers. In Africa, I would argue. it would almost certainly increase trade and broaden the reach of African books and other copyright goods across the continent. A detailed study of this tangled web is well overdue.

References

Donoghue, Peter 2015. Parallel Importation and Australian Publishing: Here We Go Again. The Conversation (blog article) https://theconversation.com/parallel-importation-and-australian-book-publishing-here-we-go-again-51249 .

Karjiker, Sadulla 2015. The first sale doctrine: Parallel importation and beyond. Stellenbosch University. http://blogs.sun.ac.za/iplaw/files/2016/04/The-first-sale-doctrine-Parallel-importation-and-beyond.pdf

Owen, Lynette, Clarke’s Publishing Agreements: A Book of Precedents. 9th Edition, 2013. London, Bloomsbury.

Productivity Commission Australia, 2016. Intellectual Property Arrangements. Productivity Commission Enquiry Report No 78, 23 September 2016. Canberra, Commonwealth of Australia

Rens, Andrew. The Legal Context for Publishing in South Africa and Uganda. In Gray, Eve; Rens, Andrew and Bruns, Karen (2010) Publishing and Alternative Licensing Models in Africa: Comparative analysis of the South African and Ugandan PALM Studies. Ottawa, IDRC, 2010

Shaver, Lea, Copyright and Inequality (February 18, 2014). Indiana University, Robert H. McKinney School of Law Research Paper No. 2014-3. Available at SSRN: http://ssrn.com/abstract=2398373

The state of the nation 2011 – government policy and open access in South Africa

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The working year is just waking up in summer South Africa and I am to moderate the opening session on the topic of ‘A national perspective on A2K in South Africa’ at the Yale A2K Global Academy. This takes place at the UCT Graduate School of Business on 18 and 19 January and the session that I am moderating needs me to step back and and try to get a perspective on what this national perspective actually looks like.

When it comes to government policy and legislation, the trouble is that South Africa, as usual, does not present a coherent or unified picture, but rather embodies a number of contradictions. Perhaps I could borrow a wonderfully vivid description of the situation in the Caribbean in an Intellectual Property Watch article by Abiole Inniss on Fair Usage in the Caribbean, something that could well apply to South Africa:

A panoramic view of the IP situation in the Caribbean would present to the observer a carnival of Olympic size replete with politicians, diplomats, rights advocates, consumer groups, law enforcement, and impotent jurists, all gyrating discordantly to the WIPO band while Caribbean citizens look on, or are pulled or shoved in.

2010 has been dominated, from my perspective, by a negative force, the pending implementation, during 2011, of the IPR Act for Publicly Funded Research of 2008. While I would argue that the default position these days on publicly funded research is that it should, as far as possible, be publicly and freely available, this piece of legislation, a kind of Bayh-Dole Act on steroids, appears to regard the default as IP protection, with commercialisation through patenting as the most desired outcome. This legislation and its implementing Regulations do appear to recognise the need for research contributions that lead to social and non-commercial development. However, the default position of the implementation clauses in the Regulations is that permission has to be obtained from a national agency before any research that is capable of commercialisation and patenting can adopt open innovation or open source approaches. Continue reading →

Why do scientists do research? Personal motivation, social impact and politics

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A thoughtful and thought-provoking blog by Cameron Neylon, a bioscientist at the Rutherford Appleton Laboratory in the UK tackles the question of values and motivations in scientific research and the question of public support for science, through government and taxpayers. His major topic is why and how he does research and why there should be public support for this activity. But most tellingly he tackles cogently the dislocation that has happened in the 21st century between motivated scientists, their methods of carrying out and reporting on their research and the public policies that recognize this research effort.  The picture Neylon  paints of his own research – methodology to study complex biological structures – is of a high technology, collaborative and multinational research environment, in which scientists build on each others’ work in an open environment.

This is germane to our South African context, in which government policy on reward and recognition systems for individual researchers and universities does not seem to recognise the ways in which research has changed in the knowledge economy and how social and development impact can be delivered these days. With the IPR Act about to be enforced, this is even more of a burning issue for South African researchers. Neylon paints a picture of a post-war policy approach that treats science as a way of dealing with threats… ‘The war against cancer, the war against climate change. But evaluating his own research motivations, he identifies the need to make a positive impact on the world as his main driver. And the most effective way to do this, he argues, is by collaboration:

Because I want my work to be used as far as is possible I make as much as possible of it freely available. Again I am lucky that I live now when the internet makes this kind of publishing possible. We have services that enable us to easily publish ideas, data, media, and process and I can push a wide variety of objects onto the web for people to use if they so wish. Even better than that I can work on developing tools and systems that help other people to do this effectively. If I can have a bigger impact by enabling other peoples research then I can multiply that again by helping other people to share that research. But here we start to run into problems. Publishing is easy. But sharing is not so easy. I can push to the web, but is anyone listening? And if they are, can they understand what I am saying?


… More open research will be more effective, more efficient, and provide better value for the taxpayer’s money. But more importantly I believe it is the only credible way to negotiate a new consensus [sic] on the public funding of research. We need an honest conversation with government and the wider community about why research is valuable, what the outcomes are, and how the contribute to our society. We can’t do that if the majority cannot even see those outcomes. …

At a social level, he argues that this is a technical and legal issue, and one of interoperability: sharing through agreed formats and vocabularies and using licences that do not place barriers in the way of mutual use of data. Process interoperability is even more important: ‘If the object we publish are to be useful then they must be able to fit into the processes that researchers actually use.’

But there are challenges at the political level: what scientists do and how they do it is not evident to the public that funds research and this could lead to a failure of funding – a real risk in the South African context, where the credibility gap is probably even wider than in the UK.


We need at core a much more sophisticated conversation with the wider community about the benefits that research brings; to the economy, to health, to the environment, to education. And we need a much more rational conversation within the research community as to how those different forms of impact are and should be tensioned against each other.  We need in short a complete overhaul if not a replacement of the post-war consensus on public funding of research. My fear is that without this the current funding squeeze will turn into a long term decline. And that without some serious self-examination the current self-indulgent bleating of the research community is unlikely to increase popular support for public research funding.


In a South African university sector which is driven by recognition based on journal articles and in which there tends to be a handful of public intellectuals who convey the broader results of scientific research to the government and the public, we could do worse than engage in the way that Neylon suggests with the potential that we have in a technological age to open up the whole of the research process, making for the maximum usage of the research that is produced. This is of vital importance in  the African research environment, where failures in effective communication means that we are constantly reinventing the wheel with frighteningly scarce resources. But even if we focus only on South Africa, where the new Minster of Higher Education and Technology is asking what has happened to research for the public good in South Africa, we could do worse than heed Neylon’s words.



We need an honest conversation with government and the wider community about why research is valuable, what the outcomes are, and how the contribute to our society. We can’t do that if the majority cannot even see those outcomes. The wider community is more sophisticated that we give it credit for. And in many ways the research community is less sophisticated than we think. We are all “the public”. If we don’t trust the public to understand why and how we do research, if we don’t trust ourselves to communicate the excitement and importance of our work effectively, then I don’t see why we deserve to be trusted to spend that money.

Read the whole blog – it is  essential reading in our current political and social climate.


Collaborative and open innovation in the global limelight

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June was a hectic month. (That sounds like a parody of TS Eliot, but it really was a hectic month.) There is a lot to catch up with, so I will provide a series of posts, on a variety of topics. The general message seems to be that times are a-changing and that there is an increasing dynamic weight behind open access and open innovation approaches, particularly (but not only) for developing countries. With the major international organisations weighing in and with our new Minister of Higher Education joining the debate at UNESCO, these are indeed interesting times.

As a follow-on from the discussion of innovation and the SA IPR Act in recent blog postings, a  week-old UN debate is relevant, showing up yet again how much the SA legislation seems to be going against global trends.

The  Intellectual Property Watch Newsletter 0f 6 July reported that ‘innovation and technology will be key to emergence from the global economic crisis, according to speakers at a recent United Nations conference on innovation-based competitiveness. However, innovation should be collaborative and involve resources inside and outside companies and institutions.’
The “International Conference on Technological Readiness for Innovation-based Competitiveness” was organised by the UN Economic Commission for Europe (UNECE) on 29-30 June. According to the IP Watch report, a number of speakers at this conference spoke about the need for collaborative innovation, or what  Paula Wasowska, director for Central and Eastern Europe market development for Cisco Systems, described as “connected innovation.”  Connected innovation requires cultural change to collaborative sharing of information, skills and perspectives within organisations and between them, the customers and the partners. “Innovation happens when people work together,” she is reported as saying.

“Innovation is moving from the in-house to the connected global market place, from the isolated individuals to collaborative environment…from proprietary control to open source, from single specialties to multidisciplinary perspective,” she said, and customers have become a critical force of competitive data as they are an invaluable force of information.

In general, this conference seemed to signal the  general acceptance of a shift from a competitive approach to innovation to a collaborative one, even where the mega-corporations like Microsoft and Intel are concerned. This collaboration takes place in and between companies and non-commercial organisations. The ethos, as Wasowska points out, is one of open sharing.

Even more striking was the statement by Claran McGinley, controller at the European Patent Office, that the patent system for ICTs is not working. The important thing about open innovation McGinley is reported as saying, is that “it is a team effort and crosses boundaries.”

The full IP Watch report can be found here.

The plan for innovation, IPR and public health is adopted at the WHO. How can this be reconciled with the IPR Act?

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It is not unusual in national policy for the right hand not to know what the left hand is doing. There is now a looming clash of priorities for the new Cabinet that goes to the very heart of the ‘better life for all’ mandate on which President Zuma’s government came to power. This  could cause embarrassment to a number of new ministers, in the DST, Higher Education, the DTI and Health. What is at stake is the way the South African government secures benefits from its investment in public research and how the country and its universities make research work for national development and the betterment of people’s lives.

What has happened is the IPR  Act, with its Draft regulations (due for final comment tomorrow) is on a collision course with a landmark resolution passed after years of debate at the  61st World Health Assembly at the World Health Authority. The South African delegation at the Assembly was headed by the Deputy Minister, Dr M. Sefularo and was attended by a delegation of 16 delegates and alternates from the Department of Health. The problem is a radical difference of views on how best to achieve benefit through innovation and intellectual property management.  The IPR Act requires universities and other publicly funded research organisations to secure intellectual property rights and patent as much research as possible, frowning upon open innovation and open source. The WHO, on the other hand promotes the idea of a collaborative world public health regime that uses patenting, but in a responsible way, and combines this with support for a number of open approaches to the shared dissemination of public health research.

The WHO resolution, passed on 22 May, finally agreed the way forward on the recommendations made to the Assembly by the Intergovernmental Working Group on Public Health, Innovation and Intellectual Property. The purpose of the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property that has now been voted through, aims to  ‘secure.. an enhanced and sustainable basis for needs-driven, essential health research and development relevant to diseases that disproportionately affect developing countries, proposing clear objectives and priorities for research and development.’ While many people glaze over as soon as intellectual property is mentioned, it is clear that this is a vitally important issue for South Africa, quite literally a matter of life and death.
The recommendations of the Global Strategy contain a vision of the scientific endeavour that stresses global collaboration and the sharing of research information and data. This is also the way forward that President Barack Obama proposed in his speech to the National Academy of Sciences in the US a few months ago. The way forward that he sees for US  science is a vision of collaborative science for the public good:

In biomedicine… we can harness the historic convergence between life sciences and physical sciences that’s underway today; undertaking public projects — in the spirit of the Human Genome Project — to create data and capabilities that fuel discoveries in tens of thousands of laboratories; and identifying and overcoming scientific and bureaucratic barriers to rapidly translating scientific breakthroughs into diagnostics and therapeutics that serve patients.

The WHO plan of action, which the South African government is now called upon to implement, contains a number of provisions that provide for the use of open source development, open access to research publications and data, voluntary provision of access to drug leads, open licensing, and voluntary patent pools. This runs alongside a more traditional approach to the patenting of drug discoveries and vaccines, but with the proviso that there must be measures in place to ensure that patents are managed in such a way as to be appropriate to public health goals. This includes delinking the costs of research from the price of health products, so that they can be affordable in developing countries.

The burning question now is how this can be implemented – presumably by the Department of Health – when the IPR Act and its Regulations will effectively block the WHO provisions for sharing research results and using open licensing and open access for the benefit of public health delivery.

It would perhaps be appropriate for public health departments in our universities and their researchers to submit a request to the DST for the withdrawal of the Regulations for further consideration of the issues at stake by all the government departments that might be involved in this potentially embarrassing clash.