Invention Disclosure and Commercialization Procedure

Diagram

The general procedure for disclosure and commercialization of IP is shown in the figure and discussed in more detail below. It is important to note that the MRC recognizes the right of IP Creators to participate in decisions regarding the commercialization and use of IP generated by them. IP Creators are therefore entitled to full disclosure of the status of the IP and will be advised before the MRC enters into any contracts for the commercialization, use or sale of that IP.

Invention Disclosure
In terms of the Intellectual Property Policy and the IPR Act, 2008, MRC-supported researchers are obliged to disclose all newly created or discovered IP to the MRC IC, and to cooperate with the IC in all matters, including technical, marketing, patenting and licensing.

The MRC IC Invention Disclosure Form should be used to disclose any new IP to the MRC IC. The form provides the information needed to start assessing the patentability and commercial opportunity for the invention. IP Creators must inform the Project Supervisor, Unit Director, and, for external MRC Research Units, the Technology Transfer Office of the university, of any invention disclosures.

Submission of an MRC IC Invention Disclosure Form
MRC IC Invention Disclosure Forms must be submitted by email to the MRC IC and, in the case of external MRC units, to the Technology Transfer Office of the university.

The contact details of the MRC IC are as follows:
The MRC Innovation Centre
PO Box 19070
Tygerberg
7505
Tel: 021 938 0413
Fax: 021 938 0385
Email: innovation@mrc.ac.za

Contact details of the university Technology Transfer Offices

Click here to find out whether your research qualifies as an invention. For further assistance and advice please contact the MRC IC. 

Please note that the earlier a potential invention is disclosed to the IC, the greater chance there is of protecting the IP before public disclosure. Early disclosure would also allow the IC to decide whether a research project should be fast-tracked through additional funding and staff.

Identification of Potential IP by the MRC IC
The IC will actively seek potential Intellectual Property by carrying out thorough audits of the research activities of MRC Units. The objective will be to identify IP that has not been recognized by MRC researchers as having commercial potential and to identify potential IP in the early stages of development to ensure that the research and development is fast-tracked and protected before public disclosure. Such IP will be discussed with MRC researchers and a decision made as to whether an MRC IC Invention Disclosure Form should be submitted. Forms must be submitted as described above.

Please note that the contents of Invention Disclosure Forms and discussions with MRC researchers on potential inventions will be kept strictly confidential by the IC.
 
Acknowledgement of Receipt by the IC
Within 2 weeks of receiving a completed Invention Disclosure form, the IC will send an email to the IP Creator(s) acknowledging receipt of the Invention Disclosure and advising them on the next steps in the process. The IC will also contact the IP Creator(s) directly to discuss the matters in the disclosure and to obtain more details where required.
 
Once an invention is deemed to have been disclosed to the public, it can no longer be patented. Researchers therefore need to be aware of and take the necessary precautions against disclosing any information on their research, including publication, presentation at conferences etc. Click here for advice on the disclosure of research information or contact the IC (Tel: 021-938-0413; Email: innovation@mrc.ac.za). Once an MRC IC Invention Disclosure Form has been submitted to the IC, the inventor will immediately be notified to abstain from any further disclosure until protection of the IP has been secured.

Assessment of the Invention

  • Assessment of the invention and decision on whether and how to proceed
    The IC will assess the invention, using specialists in the relevant technology areas where necessary. This will include searches for prior art to determine whether the invention is novel and due diligence to assess the industrial relevance and commercial potential of the invention. The due diligence process will also involve a meeting with the inventor(s) to assess their perspective on the invention. If the technology is determined to have commercial potential, a decision will be made as to whether technology transfer will be accomplished most effectively by applying for patent or other legal protection. The IP Committee of the MRC, on the recommendation of the IC, will determine whether the MRC desires to commit funding to obtain protection for the Intellectual Property. The IC will endeavour to make a preliminary decision on the processing of the disclosure within three months of receipt of the invention disclosure and to inform the IP Creator(s) of the decision. The IP Creator(s) will also be sent a copy of the due diligence reports from the assessment.
  • Decision not to proceed with the invention
    If the IP Committee decides not to proceed with the invention, a copy of the due diligence reports will be returned to the IP Creator(s), together with a report from the IC stating the reasons for not pursuing the IP further and recommendations on how to proceed with the research in the future. Possible reasons for deciding not to proceed with an invention include the following:
    • It is the opinion of the IP Committee that the invention has insufficient industrial relevance or commercial potential to proceed, i.e. there would be no return on investment in the commercialization of the research.
    • Further research is required before the invention will result in a commercially viable product/process. This may include altering the focus of the research to suit a different market than originally intended.
    • The research has commercial potential but the MRC has insufficient resources to proceed with IP protection and commercialization. Due to limited staff and funding, the IC may need to prioritize projects for commercialization.

The IPR Act, 2008, requires that the MRC offer any IP that it does not wish (or is unable) to protect and/or commercialize to the National IP Management Office (NIPMO) for consideration. If NIPMO takes the decision not to proceed with the invention then the MRC may provide the IP Creator(s) with the option to pursue the commercialization themselves, subject to any external agreements or restrictions that may apply.

Please note: The IC uses an internationally-accepted model for technology transfer that involves balancing the investment in protecting intellectual property with the potential market for the product. This requires careful consideration of the commercial potential of IP before investing in patenting costs and ensures that the MRC does not end up with a large portfolio of expensive patents that no one wants to license. The IC strategy is therefore to file inexpensive provisional patents and, wherever possible, to desist from expensive filings except where a potential licensee has been secured.

Protection of the Intellectual Property

  • Identification of IP Creator(s) and IP Enabler(s)
    It is important that all contributors to the development and beneficiation of the IP are identified early on in the commercialization process, in order to avoid disputes on the distribution of income derived from it. IP Creator(s)/Enabler(s) are defined as follows:
    • IP Creator(s): Individuals who are deemed to have made an intellectual contribution to the creation and/or development of IP arising from MRC supported research. They do not include individuals that have only carried out the tasks or supplied materials, and are not necessarily those appearing as authors on a scientific publication. To be recognized legally, a co-inventor must have conceived of an essential element of the invention or contributed substantially to the general concept.
    • IP Enabler(s): Individuals who have indirectly contributed to the creation and/or application of IP arising from MRC supported research and without whose intellectual contribution commercial application would not have been possible. Assistants, technicians and others who have contributed in taking the idea or concept to fruition may be considered as IP Enablers.

You will already have indicated in your invention disclosure form the individuals involved in your invention; however, if we decide to proceed with your invention, we will need to formalize this in a legal document. Therefore, once a decision has been made by the IP Committee to proceed with the invention, an "MRC IC Intellectual Property Contributors Form," stating the relative contributions of the parties and their affiliations, must be signed in duplicate by the parties involved and one copy submitted to the IC. The second copy must remain with the Principal Investigator. This declaration will determine the sharing of the portions of awards allocated to the IP Creator(s)/Enabler(s) and the Unit. Any changes to these contributions and additional parties must be subject to a new agreement. Changes in contributions may occur when people other than the inventors become conceptually involved in the beneficiation of IP. Members of staff within the corporate structure of the MRC (including the IC, Legal Services, Human Resources etc.) cannot be named as IP Enablers, though they may be named as IP Creators if they contributed to the original conception of the invention.

Any disputes in the quantification of the contributions of the parties and units concerned must be decided on by the Director of the unit within which the dispute arose. If the Director is one of the inventors involved in the dispute, or if the Director is unable to resolve the dispute, the responsible MRC Executive Director and the Dean of Faculty (where applicable) will decide on the matter. If the dispute is still unresolved, the IP Committee of the MRC will make a final decision on the matter.

  • Preparation and filing of a patent application
    The IC will work closely with external legal experts to determine the most appropriate method for protecting the IP. The most common form of protection is to file a patent and this will be the first option considered (Click here for an overview of patents and the patenting process). The IC and relevant external legal experts will draft a Provisional Patent Specification, usually based on a draft publication supplied by the IP Creator. Technical assistance on the invention will usually be required from the IP Creator for the drafting of patents. The IP Creator(s) will be listed as inventors on the patent and the MRC will be regarded as the assignee or applicant. The patenting process is extremely costly; therefore, it is essential that inventors carry out full searches on IP before proceeding to patenting (click here for more information on patent searching). The IC is able to assist you with this. Once an application is filed, the IC will manage all stages of patent prosecution and administration together with the relevant legal experts.

It is the responsibility of MRC researchers to keep thorough records of experimental work and know-how produced as part of good research practice as well as for IP purposes (click here for Guidelines for laboratory notebooks). Laboratory notebooks are essential for proving the date of invention and reduction to practice in cases of opposition to patents and in litigation. As these events can take place many years after the invention was filed, notebooks and other records associated with an invention patented by the MRC should be retained by the relevant MRC unit.

In order to protect the copyright of materials, MRC researchers must ensure that publications in books, on websites etc. are accompanied by the following statement: Copyright © [year] Medical Research Council. All Rights Reserved. The date should be the year in which the work was first published. For most works, with the exception of films and videos, it is not necessary to register copyrights legally.

In some cases, it will not be possible or appropriate to protect IP through the legal means described above. In these cases, IP Creators and others working on or having access to the IP in question will be required to sign a Non-Disclosure Agreement (NDA), and to treat the IP as a "trade secret."

Business Planning
There are various options available for commercializing research. The specific commercialization route to be used will be dictated by the following factors:

  • Financial investment required for each commercialization route
  • Potential return on investment for each commercialization route
  • The nature of the technology/product/process itself
  • The target market and how it can best be reached

Each of these factors must be examined before deciding on how to commercialize an invention. The IC may make use of IP Management agencies or organizations for the purpose of obtaining services and advice on the commercialization of IP.

  • Strategy and development of a business plan
    The IC will assist the IP Creator in developing a business plan for the commercialization of the IP (Click here for guidelines on how to prepare a business plan). The drafting of the business plan will require a thorough assessment of the potential market, development of a marketing plan, calculation of a budget required for technology development and commercialization and projected income from the IP, development of a potential business model, assessment of risks involved in the development and commercialization process, etc. The business plan will describe the commercialization route chosen and the steps required to achieve this.
  • Market research and marketing plan
    An essential part of the business plan development and the assessment of IP is the market analysis. This includes determining whether there is a market for the invention, what the size of the market is, how the market may change in the future, how the technology/product/process will reach the market, what products may compete for the market etc. (Click here for information on market research and the development of a marketing plan) The IC, with the cooperation of the IP Creator, will carry out an initial assessment of the market before investing any funds in IP protection. Once a decision has been made to proceed with the invention, an in-depth market analysis and marketing plan will be developed.
  • Funding for Commercialization
    The commercialization process is usually extremely costly and can require a large investment over a relatively long period of time before income is derived. There are various ways of funding the establishment of new ventures (click here for more information on funding for commercialization). The IC will provide advice on and assistance with procuring funding for the commercialization process. This funding will generally be used for proof of concept studies, product development, pilot scale studies, market research, business plan development, etc. Units that generate their own contract funding may be required to contribute to these costs. We encourage researchers to include a patenting and commercialization budget in funding applications for research that may lead to the development of new IP. 

Commercialization Routes

  • Licensing
    Technologies, products and processes can generally be licensed out at various stages of development. The more development done on a technology before licensing, the higher the income that can be commanded from licensing fees and royalties. The major advantage of licensing is that the responsibility for manufacturing, selling, distribution and even further development of the technology/product/process can be transferred to the licensee, thus reducing the investment required by the MRC in commercialization.

If licensing is the most appropriate route for commercialization of the IP in question, the IC, with the assistance of the IP Creator(s), will identify potential licensees or commercial partners to develop and commercialize the IP. In line with the requirements of the IPR Act, preference will be given to local companies, BEE (black economic empowerment) entities and SMEs (small and medium enterprises). Sponsors of research may be granted rights to elect a royalty bearing exclusive or non-exclusive license to the IP. The IC, together with the relevant legal experts, will draw up and negotiate the license agreements.

The IC welcomes contact from companies who are interested in licensing technology from the MRC. For information on MRC inventions and technologies available for licensing please view the MRC’s Technology Portfolio.

  • Formation of a spin-out company
    In some cases, for example where the technology is sufficiently broad based or novel, technology transfer may be best achieved through a spin-out company. The IC will assist with the formation of new companies, including the sourcing of appropriate management. The MRC may take an equity stake in the spin-out company in exchange for granting a license to the IP, and has the right to appoint a non-executive director or observer at board meetings. IP Creators who remain as MRC researchers may also own shares in the company. They may also act as non-executive directors and sit on the Scientific Advisory Board of the spin-out company, but, in doing so, will not serve as representatives of the MRC. Note that shares are subject to dilution in the event of investment by third parties e.g. Venture Capital Investment.

The IC will continue to assist the new company in all processes involved in releasing products onto the market, i.e. registration, regulations, trials, permits, ethics, licenses, pilot and full-scale production, biosafety issues etc., and will provide on-going guidance on corporate governance, strategy and business development, as required.

  • Direct sale of products and services
    In some cases, it may be appropriate for the MRC or the IP Creator(s) to sell the product or service directly. Where financial input from the MRC is not required, the revenues from the direct sale of products and services will generally be allocated to the IP Creator(s) and his/her Unit.
  • Technology Brokers
    The IC may opt to use a technology broker, where appropriate, for the commercialization of MRC IP.

Royalty Collection and Monitoring
The IC will be responsible for ongoing monitoring of license agreements and administration of any income produced from the IP. This income could include:

  • License fees
  • Evaluation fees
  • Milestone payments
  • Royalty income
  • Outright sale of IP
  • Sale of commercial ventures built around MRC IP
  • Sale of shares in such commercial ventures
  • Dividends derived from such commercial ventures
  • Commissions

The MRC shares with IP Creator(s)/Enabler(s) material benefits arising from the beneficiation of IP. The distribution of income derived from IP is in accordance with the MRC’s Awards for Inventors Scheme (see MRC IP Policy). According to this scheme, the income, after deduction of direct costs, is shared between the IP Creator(s)/Enabler(s), the Unit(s), the MRC and the MRC IC. Direct costs include patenting, legal, promotion, negotiation, administrative and other costs directly associated with the commercialization process, but exclude costs associated with prior research and development.

Contact Details
2nd Floor Building A, MRC Medicina Campus, Francie van Zijl Drive, Parow Valley, Cape Town
Tel: 021 938 0351; Fax: 021 938 0385; Email: info.ship@mrc.ac.za


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