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In 2009 before the Intellectual Property from Publicly Financed Research Act became law I warned about the consequences for entrepreneurs.

Two recent reports in the press show how universities are having to innovate around the provisions of the Act in order to work with the private sector.  According the Financial Mail “it is also scaring off private investors from commercialising discoveries”.

Business Day reports that Aart Boessenkool, director of the Office of Commercialisation and Technology Transfer at the University of Johannesburg, describing the gap between university research and a commercial prototype”the valley of death”. According to Boessenkool “To take an invention through the valley of death takes a lot of money”. South African universities don’t have that kind of money. As Anita Nel, CEO of Stellenbosch University’s InnovUS points out the Act requires universities to “commercialise” all intellectual property generated by the university or face having it taken away by a government office.  But most university research doesn’t give the kind of payback that makes spending a lot of money to cross the valley of death worth it. According to Nel ‘About 95% of our income is derived from less than 5% of the technologies on our books.”

It is appropriate that not all university research can be turned into commercial products. Universities don’t exist to compete with the private sector but instead to advance and disseminated knowledge. That is why we public funding. Universities do what is called basic research really well. Basic research doesn’t mean that it is easy but that it is fundamental, aimed to understanding general principles. The role of the private sector is to turn that basic research into products that someone wants to buy. The problem is that universities are now required by the Act to control what the private sector does with its research and the private sector is complaining that the result of the act are too much accuracy.

The articles report that InnovUS has created a new programme called Instant Access  in which gives companies full commercial use for three years without charge. Only if a company makes money from a product is it required to pay any amount to InnovUS. This is an ingenious solution to one of the problems created by the Act. But it shouldn’t be necessary because I and a number of others warned about these problems in 2009 but the drafters of the Act persisted without heeding us.