On Monday, Google bid $900-million (U.S.) for approximately 6,000 patents owned by former Canadian telecom giant Nortel. Google says this is a defensive move, part of a larger effort to stymie costly patent litigation that too often stifles innovation.
The best defence is a good offence. In today's knowledge economy, patents are hard currency. To be a strong player in the global game of innovation, Canada must treat its intellectual property as it treats its traditional property - with coherent policies and informed action.
Many of Canada's international competitors have recognized intellectual property as a political priority. Recently Australia, Japan, South Africa, and Singapore have all devoted substantial resources to developing progressive intellectual property policies and legislation that address pressing issues such as patent quality, patent proliferation and intellectual property management. The UK Intellectual Property Office is currently conducting a study about the importance of IP to innovation. Canada, meanwhile, is too slow in responding to the global realities affecting our national capacity for innovation.
Developing a national intellectual property strategy is important for three reasons.
First, when something like the Google bid happens, Canada should have established processes in place to ensure that it is not disadvantaged by the outcome. Regardless of what one thinks of the ultimate result, there is no doubt that the federal government handled BHP's bid for Potash Corp. with the seriousness it deserved, following the rules specified in the Investment Canada Act. The same can be said of the TSX-LSE merger: The select committee on the proposed transaction brought together experts on the subject and formed the basis for a federal review. We have to develop an appropriate framework for intellectual property, an intangible asset.
It is unclear what outcome would be best for the Canadian interest in this particular situation. If Google follows through on its stated intention to share the Nortel patents with the open-source community, then one could imagine benefits to many small Canadian businesses looking for innovation stimulus. What matters, however, is that Canada not proceed in an ad hoc fashion.
Second, a progressive intellectual property policy would help small Canadian companies compete in the knowledge economy. Too often, foreign companies employ aggressive foreign litigation to extort Canadian companies. Smaller Canadian companies have little defence against these tactics. A national intellectual property policy that foregrounds education and IP management strategies would help them understand the strategic value of intellectual property and give them a better chance of getting to the global stage.
Beyond that, we can work toward developing creative ideas for IP management. Some countries are discussing and introducing funds to support efforts of small companies to both file original patents and defend themselves against patent trolls - companies that acquire patents or patent rights with the sole intent of enforcing those rights through the negotiation of licences and litigation. For example, last year, the South Korean government helped launch Intellectual Discovery - a fund to buy out patents that might be asserted against their own domestic firms. They also launched a separate firm to monetize patent rights that are owned by South Korean government institutions.
Canada needs to consider the types of policies that other countries are implementing to ensure we at least hold the basic artillery to compete in the international battleground of intellectual property.
Finally, Canada has a rare opportunity to shape global action in intellectual property. Canadians need to think strategically about what type of international intellectual property standards would benefit our country - as well as the rest of the world - and take a lead in promoting those standards. Canada has a long history of influencing global norms - we did it with peacekeeping, with land mines and with the responsibility to protect. It is time to step up to the plate of intellectual property, and help to shape an international norm that will undoubtedly have strong implications for Canada's long-term economic prosperity.
Jennifer Jeffs is president of the Canadian International Council.