Armscor, as the custodian of the Department of Defence’s intellectual property (IP), is looking at ways of leveraging this in order to generate revenue.
In a presentation in March to the Joint Standing Committee on Defence (JSCD), Armscor said it is responsible for the management of the Department of Defence’s (DoD’s) IP and “must ensure that DoD IP is identified, protected and exploited to the benefit of the DoD and the country at large.”
In order to achieve this, Armscor developed an IP Strategy that speaks to how Armscor aims to use IP to drive technology development; how IP is leveraged to promote transformation in the South African defence industry; the importance of proper IP control and protection; and IP exploitation governance.
Armscor said it undertakes research and development initiatives in order to maintain defence technologies and foster innovation within the industry. In this regard, Armscor aims to collaborate with both local and international stakeholders to promote technology transfer between the parties and cooperative research and development efforts.
Armscor also aims to transfer technology to exempted micro enterprises and qualifying small enterprises to enable them to source funding to research and develop new technologies and/or maintain existing technologies.
The IP Strategy speaks to Armscor leveraging IP to promote transformation within the South African defence industry and thereby supporting the objectives of the Defence Sector Code, it said.
Armscor will transfer the IP to QSEs (qualifying small enterprises) and EMEs (emerging micro enterprises) in order for them to participate meaningfully in defence acquisition, research and development. QSEs and EMEs will be able to bid for Armscor orders and use the transferred IP to execute these orders.
Typically the industry submits IP exploitation requests to Armscor, for approval by Armscor and the Department of Defence. These requests are taken through the IP exploitation process to ensure control and protection of the Department of Defence IP, and are considered on a case by case basis.
When assessing the IP exploitation requests, due consideration is given to the financial benefit to the Department of Defence in the form of a royalty payment, the strategic and/or sovereign nature of the IP and issues of national security, Armscor said. National security considerations are looked at.
Armscor, Defence Intelligence and Defence Materiel officials look at each application. If the IP was developed for, example, the Navy, they would assess it too. This process doesn’t replace National Conventional Arms Control Committee (NCACC) processes, Armscor clarified.
It added that the process has been benchmarked with countries like Canada, China, the United Kingdom, United States, and Iran: “The governments of these countries cooperate with their defence industries to leverage IP for further innovation and economic growth in a controlled manner governed by an equivalent of Armscor in their countries.”
Armscor’s approach is also informed by the challenges of funding and the need to maintain defence strategic and sovereign capabilities.
Speaking at the Aerospace, Maritime and Defence conference last year, National Defence Industry Council (NDIC) Strategy Project Leader and Armscor non-executive director Dr Moses Khanyile said that the South African defence industry has over the years generated a huge amount of intellectual property through Armscor on behalf of the Department of Defence. “The industry could benefit immensely from exploiting that,” he said. “I propose a comprehensive catalogue of intellectual property assets be complied and be made available to local industry. Government should retain ownership but industry can enjoy exploitation of intellectual property assets.”
More than four years ago Armscor already announced plans to increase the income earned from the commercialisation of intellectual property as part of its revenue generation strategy.
A study done by Armscor in 2016 showed that the then portfolio of IP was worth more than R400 billion if industrialised. This could create at least 10 000 direct jobs and 40 000 indirect jobs.