Armscor tasked with IP commercialisation process

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As the custodian of Department of Defence intellectual property (IP), Armscor has been tasked with identifying and making accessible IP for commercialisation.

The National Defence Industry Council (NDIC) has tasked Armscor with developing a transparent process that will be applied to enable the industry to identify and access Department of Defence (DoD) IP for commercialisation, according to Dr Moses Khanyile, NDIC Coordinator, who was briefing the Joint Standing Committee on Defence on 3 March on plans to boost the South African defence industry.

He explained to the Committee that the South African defence industry made a presentation to the NDIC on 13 October 2021 on the need for DoD IP commercialisation. As Armscor is the custodian of all DoD IP assets and has a governance process/policy for the management of IP in the DOD, it was tasked with developing a commercial exploitation process for the industry.

“Armscor is currently busy with that exercise,” Khanyile said. “An update will be presented to the NDIC on 15 March 2022.”

He said commercialising DoD IP is an important intervention for the struggling domestic industry.

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.

Armscor has 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.

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 last year. 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.

In a Joint Standing Committee on Defence presentation on 23 February, Armscor noted that it is the custodian of Department of Defence intellectual property in terms of the Armscor Act. All DoD IP is developed for sovereign and strategic reasons which are key to national security.

“Every request from the industry has always been approved, except for those that were withdrawn by the requestor due to their processes with a third party,” Armscor stated. “The idea behind the IP governance process is to encourage IP exploitation in an inclusive manner.”

Armscor is also working with Denel on commercialising IP, namely its data packs, and has been auditing this with Armscor.