Patent Support Fund Guideline
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1 Patent Support Fund Guideline
2 TABLE OF CONTENTS 1 INTRODUCTION SCOPE OF THE FRAMEWORK ELIGIBILITY FOR APPLICATIONS PROCESS AND PROCEDURE CONDITIONS FOR FUNDING DEFINITIONS ABBREVIATIONS Page 2 of 10
3 1 INTRODUCTION 1.1 The securing of Intellectual Property (IP) is an important aspect in the economic growth strategy for the knowledge economy in which we participate, globally. A substantial portion of technology innovations and inventions emanating from the South African public, and in particular, the Small Medium Enterprises (SMEs) have not made their way to the marketplace because of a lack of support mechanisms, largely financial, for patent protection. 1.2 The Patent Support Fund is the only fund of its kind in South Africa that is specifically designed to support and assist entrepreneurs and SMEs with the prosecution and maintenance of their patent, design, trademark and plant breeder s rights applications ( IP portfolio ). 1.3 The Patent Support Fund is distinct from, the National Intellectual Property Management Office s (NIPMO) IP Fund, in that it is specifically targeted at entrepreneurs and SMEs, whereas the IP Fund is specifically targeted at Higher Education Institutions ( HEIs ) and Sciences Councils ( SC ), to assist them in prosecuting and maintaining their IP portfolios. The IP Fund entitles the HEIs and Science Councils to claim a rebate from the IP Fund for prosecution and maintenance costs incurred by the HEIs and Science Councils. This amount is typically 50% of the actual costs incurred. Whilst the IP Fund caters for HEIs and Science Councils, prior to the approval of the Patent Support Fund for entrepreneurs and SMEs, no such support existed for the entrepreneurs and SMEs. The Patent Support Fund is intended to support the entrepreneurs and SMEs by providing funding for the prosecution and maintenance of their IP portfolios. The Patent Support Fund is designed to provide financial support for entrepreneurs and SME s to assist them in prosecuting and maintaining their IP portfolios. 2 SCOPE OF THE FRAMEWORK 2.1 Scope The Patent Support Fund is intended to support entrepreneurs and SMEs receiving support who/that develop technology-based products or services that fit within fit within TIA s core objective i.e. to fund technology development for purposes of progressing new or improved technologies to commercial deployment from applied research stage, from technology Page 3 of 10
4 entrepreneurs and SMEs. These entrepreneurs and SME s will be assisted by TIA in the filling, prosecution and maintenance of their IP portfolios. 2.2 Objectives The main objective of the Patent Support Fund is to support the filing, prosecution and maintenance of patents and/or patent applications in respect of technological innovations emanating from entrepreneurs and SMEs. The support is specifically intended for funding new or improved technologies which TIA can progress from the applied research stage to commercial deployment. This support will, at the discretion of the Technology Innovation Agency ( TIA ), be informed by a limited due-diligence which will focus on, but not limited to, evaluating the business and financials of the entrepreneur and/or SME, conducting novelty searches, analysing and assessing the commercialisation strategy, the marketing strategy and the BEE component. This analysis will be carried out by the Intellectual Property Services ( IPS ) Unit The TIA Act provides that, TIA funds technological innovations. Technological innovation is defined in the TIA Act as: the application in practice of creative new ideas, which includes inventions, discoveries and the processes by which new products and services enter the market and the creation of new businesses.. When assessing an application for funding for the Patent Support Fund, the test for novelty that is applied universally to determine patentability of innovative technologies will be applied to determine whether or not the technological innovation under consideration meets the requirements of novelty. The test for novelty provides inter alia that the invention/discovery/process must not have been made public, in any way (e.g. by oral disclosure, use, trial, printed publication in any language) anywhere in the world, before the date on which an application for a patent is filed. If the technological innovation has not been made available to the public before the date on which an application for a patent is made, then the technological innovation will be considered to be new. TIA will only consider technological innovations that meet the requirements of novelty for the Patent Support Fund. Page 4 of 10
5 2.3 Structure of the Patent Support Fund The Patent Support Fund will provide support up to a maximum of R (five hundred thousand Rand) to successful applicants. The funds will be disbursed over a maximum period of 3 (three) to 5 (five) years depending on the relevant sector. This will be paid out to the firm providing the IP services, namely, a firm of registered patent attorneys ( IP Service Provider ) The support will be in the form of a grant which will cover the costs associated with the prosecution and/or maintenance of one or more of the following: South African provisional patent applications, South African complete patent applications, a Patent Co-operation Treaty ( PCT ) application, foreign national phase patent applications. The support, will where warranted, also cover the costs of protection for other forms of IP, including inter alia designs, trademarks and plant breeders rights The support will be subject to satisfactory progress including an analysis of a need for continued prosecution costs depending on various examination reports. The funds will be paid to the IP Service Provider upon submission of invoices from the IP Service Provider to TIA by the Applicant detailing the nature of the costs If the patent applications or the rights stemming therefrom are not exploited within 3 (three) to 5 (five years) of funding, depending on the relevant sector, TIA may, at its discretion, and subject to NIPMO approval, and subject to any other rights it may have, require the applicant to grant TIA a non-revocable, non-exclusive and transferable royalty-free license to the patent portfolio or an assignment of the patent portfolio; and TIA is free to seek independent exploitation of the patent portfolio. 3 ELIGIBILITY FOR APPLICATIONS 3.1 Eligible applicants for the Patent Support Fund, are applicants who meet the following criteria: The applicant must be (a) an SME, as defined in the National Small Business Act 1996, as amended; or (b) an individual inventor/entrepreneur, who will register a private company before the patent support can be provided by TIA (hereinafter referred to as Applicant ). Page 5 of 10
6 3.1.2 The Applicant must be entitled to apply for patent protection, therefore the applicant must be the inventor. Alternatively, the Applicant must be an assignee or coassignee of the invention, and the patent application or patent portfolio for which support is sought The Applicant must have filed at least a provisional patent application, although in exceptional cases, and at the discretion of TIA, support may be provided for the filing of a provisional patent application The Applicant should preferably have a BEE component illustrated in the management and/or ownership structure in accordance to TIA s policy. Alternatively there must be a BEE plan under implementation by the SME Preference will be given to applications having patent portfolios that offer clear national value, a clear sector fit and whose exploitation programme will promote SME development, Broad Based BEE Act and the Employment Equity Act The Applicant must submit a completed application form, detailing the proposed patenting programme, including the following: A clear description of the invention with sufficient detail on the structure, composition, characteristics, features, materials used etc of the invention, to enable a person skilled in the art to be able to construct the apparatus/system, or carry out the method of the invention (approximately one to two pages). Additionally, a copy of the provisional patent application, complete patent application, PCT or any other patent document must be provided. Results and interpretation of prior art searches which have been conducted. Costs incurred (presented as invoices paid by the Applicant) for the filing of a provisional patent application and for the prior art search, to reflect the extent of commitment by the Applicant in respect of the patent portfolio. It should be noted that the Patent Support Fund will not cover any retrospective costs incurred by the applicant. Proposed budget, including quotations from patent attorneys that have been or will be used for the drafting of the patent specification(s) and filing of the application(s). A mini-business plan (of no more than 5 pages) comprising a commercial viability assessment of the innovation, including details of the route to market whether it be in the form of licensing and/or use by applicant, commercialization costs, skills base within the management and technical Page 6 of 10
7 team, skills required for the execution of the commercialization plan as envisaged by the Applicant and market analysis The Applicant must demonstrate the capacity and a plan to develop the invention towards prototype or pilot stage. TIA will only consider an application which provides sufficient detail regarding the development of the invention beyond proof of concept stage. Furthermore, TIA will only support an application which has an appropriate commercialization plan to realise value for the invention. 4 PROCESS AND PROCEDURE 4.1 TIA will receive applications for the Patent Support Fund ( the Application ) through the normal TIA channels, and the Application will be assessed only as to formal requirements i.e. has the Applicant completed the application form, has the Applicant submitted the required documentation and has the Applicant signed the application form. 4.2 Provided that all the formal requirements have been met, the Application will be forwarded to the relevant Sector Unit 1 to assess for strategic and sector fit. 4.3 If the relevant Sector Unit deems there to be a sector and/or strategic fit, it will forward the complete Application, which includes the Application accompanied by the information and documentation set out in paragraph above, to the IPS unit for assessment in accordance with the criteria for the Patent Support Fund. 4.4 The IPS Unit will carry out a limited due diligence to assess the merits of the Application which will include, but not limited to, assessing the novelty of the technological innovation, the IP strategy for the Applicant, the business and financials of the Applicant, the commercialisation strategy, the marketing strategy and the BEE component. 4.5 Within 20 (twenty) working days, the IP unit will produce a due diligence report accompanied by a motivation to the head of the Internal Assessment Committee ( IAC ) with a recommendation to either support or reject the Application for the Patent Support Fund. 4.6 Should IAC endorse the recommendation by the IPS Unit, the Applicant will thereafter enter into a contract with TIA. 1 TIA has seven Sector Units, viz. Health Biotechnology, Industrial Biotechnology; Agri-Biotechnology; Advanced Manufacturing, Energy, Mining, ICT. Page 7 of 10
8 4.7 The IPS Unit will conduct audits to evaluate progress toward final IP protection and also the commercialisation of the technological innovation bi-annually. The Applicant will be required to provide a progress report every 6 (six) months for the duration of the agreement with TIA. 4.8 Having conducted bi-annual review, the IPS Unit will make a recommendation to the head of the IAC to either continue to fund the Applicant or to cease the support. 5 CONDITIONS FOR FUNDING 5.1 The support will be in the form of a grant which will cover the costs associated with the filing and/or prosecution of one or more of the following: South African provisional patent applications, South African complete patent applications, a Patent Co-operation Treaty ( PCT ) application, foreign national phase patent applications. The support, will where warranted, also cover the costs of protection for other forms of IP, including inter alia designs, trademarks and plant breeders rights. 5.2 If the patent portfolio is not exploited within 3 (three) to 5 (five years) of funding, depending on the relevant sector, TIA may, at its discretion, and subject to any other rights it may have, require that TIA be granted a non-revocable, exclusive and transferable royalty-free license to the patent portfolio or an assignment of the patent portfolio; and is free to seek independent exploitation of the patent portfolio. 5.3 The Applicant must indicate the fit between the existing skills set including how it will be complemented if there are specific skills lacking. 5.4 The Applicant will be required to supply copies of all associated contracts (in particular, but not limited to, employment contracts; collaboration agreements with individuals, other public institutions, local and foreign private entities) and warranties relating to ownership of the intellectual property In order to verify ownership of the IP. 5.5 TIA shall be granted a right of first refusal in respect of further funding sought for the exploitation of the technological innovation. TIA reserves the right to make available, further funding, via its other funding instruments, for focused technology development activities with clearly defined deliverables relating to the patent portfolio. Page 8 of 10
9 5.6 TIA will be acknowledged in all publicity associated with the project covered by the patent applications or patent(s). 5.7 The Applicant shall obtain an approval from TIA before entering into any agreements which could have the effect of encumbering or transferring ownership of the patent portfolio. 5.8 Progress Reports comprising financial, technical, legal and commercial components must be submitted every 3 (three) months. 5.9 TIA must, on an on-going basis, be provided with full copies of all documentation relating to the patent portfolio (including but not limited to copies of provisional patent applications, prior art searches, complete patent applications, PCT patent applications, foreign patent applications, any opinions in respect of the patent portfolio), not limited to the status of the patent portfolio TIA reserved the right to vary the terms and conditions of this SME Patent Fund instrument. 6 DEFINITIONS 6.1 Design shall mean any and all design applications and any and all design registrations issuing therefrom together with any corresponding foreign equivalents; 6.2 Intellectual Property shall mean any rights including, inventions, designs, trademarks, trade secrets and know-how in the form of material compositions, manufacturing techniques, specifications, formulae, computer source code, drawings, concept sketches, models, software, test results, outcomes, tables and compilations, processes; production methods; and marketing and financial information; copyright in any works, including but not limited to, literary and artistic works, computer topographies and computer programmes; 6.3 IP portfolio shall mean a portfolio of patent, design, trademark and plant breeder s rights applications and the corresponding granted rights; 6.4 Know-How shall mean all information which is owned by the applicant, and which pertains to the invention, including but not limited to: techniques, specifications, formulae, computer source code, drawings, concept sketches, models, software, computer programmes, test results, analyses, research outcomes, tables and compilations of Page 9 of 10
10 information, products, systems and processes; methods, marketing information and financial information; 6.5 Patents means any and all patent applications and any and all patents issuing therefrom together with any foreign equivalents, additions, divisions, continuations, continuations-inpart, substitutions, extensions or re-issues, registrations and re-validations, international applications under the Patent Cooperation Treaty, and including supplementary protection certificates or other Governmental granted exclusivity in the nature of a patent; 6.6 Plant Breeder s Rights shall means any and all applications for plant breeder s rights and any and all plant breeder s rights issuing therefrom together with any corresponding foreign equivalents; and 6.7 Trade Mark shall mean any and all trademark applications and any and all trademarks issuing therefrom together with any corresponding foreign equivalents. 7 ABBREVIATIONS HEI - Higher Education Institutions; NIPMO - National Intellectual Property Management Office; IP - Intellectual Property; IPS - Intellectual Property Services; PCT - Patent Cooperation Treaty; SC - Science Council; SCM - Supply Chain Management SME - Small Medium Enterprises; and TIA - Technology Innovation Agency. Page 10 of 10
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