South Africa Revises Regulations on Publicly Financed Research

The South African Bayh-Dole Analogue went into effect in August 2010 and the final regulations for this Act were released.  UAEM had previously written to the South African government addressing our concerns about the Bayh-Dole model and the draft regulations.  After South Africa requested additional input, UAEM submitted a series of proposed amendments and revisions to the regulations.  While the Act itself (as well as the Bayh-Dole model as a whole) could be improved (UAEM was not involved at the time South Africa passed the Act and would caution any country to fully consider the negative effects Bayh-Dole has had) the final regulations are certainly an improvement over the draft versions.  These regulations, as ultimately enacted, do address UAEM's written proposals to better serve the public health and we appreciate South Africa's engagement consultative process. 

Draft regulations contained in section 8(8) limited march-in rights to "health, security, and other emergency needs."  The language of this regulation therefore unnecessarily limited the rights conferred to the government and narrowed the scope of the State's licensing rights. UAEM's letter to the South African government specifically proposed the removal of the word "other" to enable the government to better exercise its rights under Section 11(1)(e) of the Act.  Furthermore, UAEM suggested replacing the word "and" with the word "or" in order to clarify that the grounds of health, security or emergency may independently or collectively trigger the use of rights by the government.

The finalized regulations accept both UAEM's suggestions and the South African government has removed the word "other" and also has changed the word "and" to "or."  These changes provide significant benefits to public health, allowing the South African government to make better and more efficient use of its march-in rights.

Furthermore, UAEM suggested the amendment of Draft Regulation 8(8)(a) so that the affected recipient(s) of intellectual property affected by march-in can be provided with reasonable notice and explanation.  The final regulations have incorporated this suggestion, now providing that "the affected recipient and co-owner(s) must be notified of the proclamation, within a reasonable period thereof, and provided with an explanation of the needs for which such rights are exercised."

Under draft regulation 8(8)(b), addressing who may exercise march-in rights, UAEM's letter recommended the inclusion of organs or other third parties rather than just the State or the State's organs.  The final regulations accept this suggestion and specifically allows for "other third parties designated by the State" to use these rights.

While draft regulation 8(8)(c) provided that the exercise of such rights must be for a reasonable time period until "such emergency has been alleviated," the final regulations have been reworded to say that "the exercise by the State of such rights, must be reasonable until such health, security and emergency needs have been alleviated."  This inclusion of "health, security and emergency needs" rather than simply "emergency" takes into consideration that health or security reasons may also trigger the need for march-in.

The changes that the South African government made to these regulations better address the needs of the public and greatly improve the ability for the State to use the march-in rights granted by Section 11(1) of the Act.  We appreciate the consultative process the South African government undertook to ensure better service to the public and health.

The Bayh-Dole Act has now been in place in the United States for 30 years and has proven ineffective in protecting the public health.  Although countries such as South Africa have taken steps to strengthen provisions protecting the public interest, it is also important for developing countries to reconsider whether the Bayh-Dole model is worth replicating.  Developing countries should carefully consider alternative models to ensure better access to publicly funded innovations and legislation that explicitly protects the public.