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opinion

Public funding via Dalhousie University experts have contributed a slew of patented inventions that are the basis for Tesla’s new ‘million-mile’ battery – a Tesla branch in Switzerland seen here on March 25, 2020.ARND WIEGMANN/Reuters

Natalie Raffoul is the managing partner and intellectual property lawyer of Brion Raffoul LLP and an expert panelist to the Ontario government.

Jim Hinton is founder and intellectual property lawyer at Own Innovation, and co-founder of the Innovation Asset Collective

With Canada’s economy ravaged by the coronavirus and both federal and provincial governments focused on short-term measures to support Canadian jobs, the composition of our economy and decades of missed innovation strategies are now being shown to have dire consequences – both for our health and our prosperity.

Because Canadians do not own nor control the vital intellectual property rights for greatly needed health products, such as masks and ventilators, we are not only reliant on other countries but are also at the peril of shipments of defective goods.

Recent investments into research and development aimed at developing critical health care products, services and vaccines do not come with any IP strategy that would ensure that commercialization benefits accrue to the Canadian taxpayers who fund it. As an example, it was reported this month that Canada’s National Research Council signed a deal with China’s CanSino in which Canadians are involved in research and footing the bill for a cell line to develop a COVID-19 vaccine, but the resulting IP rights are owned by the Chinese company. In addition, the deal does not come with any guarantee that Canada will receive any supply of any resulting vaccines – vaccines that Canadian taxpayers are supporting and funding.

Canadians picking up the tab for foreign companies’ research is a familiar and systemic problem, especially for strategically valuable technologies such as 5G and artificial intelligence. Public funding via Dalhousie University experts have contributed a slew of patented inventions that are the basis for Tesla’s new ‘million-mile’ battery. But, sadly, Canadians will not be the ones to financially benefit from these inventions. Instead we will pay for them once again as part of commercialized products sold back to us.

These are just the most recent examples of a particularly unique disease that’s been affecting our economic well-being for some time – the propensity for Canadian taxpayers to fund and create ideas that other countries commercialize.

Innovation without an IP strategy is philanthropy, and Canadians are giving away the family farm at a time when we can least afford it. “Canada is the world’s open source factory for ideas. We create it, but let others commercialize it,” said one of the participants in a report produced by the 2020 expert panel report on IP in Ontario’s innovation ecosystem. Despite announcing an intellectual property strategy in 2018, real action is needed to see a measurable improvement in Canadian IP position and global commercialization relative to its global competitors.

More research funding will not translate into more commercialization and economic wealth generation for Canada without achieving freedom to operate for the Canadian companies competing in the global market. IP rights are a requirement to securing this freedom, and Canadian policy makers have to urgently support Canadian ownership of valuable IP and data inside Canadian entities.

This is the only way that we are going to add value to our companies and ensure we create wealth for both present and future Canadians. This is the wealth that is needed to support our expanding public spending and critical health infrastructure.

To achieve these objectives, there are three ideas that the federal government can deploy right away:

  • Commit to funding a proper national IP collective with dedicated resources that can generate, accumulate and unlock the IP assets to the benefit of the Canadian economy. The current plan for a sector specific “pilot project” has quickly become an inadequate measure given the diversity and the number of Canadian high-growth firms that fear they will become takeover targets as a result of the pandemic
  • Dedicate appropriate funding for the creation and stewardship of strategic data trusts for Canadian innovators to unlock, accumulate and commercialize Canada’s data assets.
  • Address strategic procurement in core areas such as urban innovation and health technology. Urban innovation is another area in which Canadian governments are touting Canadians as leaders and yet we own less than 1 per cent of the patents in this space. With the exit of Alphabet’s Sidewalk Labs from the smart city project at Toronto’s waterfront, we can now rethink our innovation strategy for fostering economic development.

As we have said before, there is a tremendous economic opportunity for Canada in building smart cities. However, we need a paradigm shift from merely looking at the economic opportunities of brick-and-mortar buildings to keenly considering and seizing the opportunity for Canadian innovators to own and exploit the IP they develop for the benefit of our economy. Only then can we move from being IP renters to IP landlords and capture returns in the global economy of IP and data.

Jobs and research capacity alone will not adequately address our current health-related and economic woes. We need innovation capacity that supports and promotes domestic ownership of valuable IP. This is a crucial first step for Canadian companies to become global champions. We need true ambition in a time of crisis.

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