the federal government invests in research that generates intellectual property, and much of it, in the form of patents, is scooped up by foreign companies.Duncan_Andison/Getty Images/iStockphoto
It was only 95 words, buried deep in this year's federal budget, but it was enough to provoke cautious optimism in Canada's intellectual-property (IP) circles: A commitment, at long last, to developing a national IP strategy.
"It's been years in the making … to get policy makers to understand how much IP and strategic thinking on it matters to the future of Canada's innovation economy," says Myra Tawfik, a senior fellow at Waterloo's Centre for International Governance Innovation, and a professor of law at the University of Windsor. "For the first time, IP is part of a national economic plan. That's really important."
The federal announcement comes as concerns mount over the issue of "IP leakage," a simple-sounding problem with no simple solution: Essentially, the federal government invests in research that generates intellectual property, and much of it, in the form of patents, is scooped up by foreign companies. Those companies commercialize Canadian-generated IP and reap the profits, essentially subsidized by Canadian taxpayers.
The issue reared its head most recently last month, when Uber announced it had hired University of Toronto associate professor Raquel Urtasun to head its Advanced Technologies Group in Toronto, dedicated to research into self-driving vehicles. Uber made a $5-million commitment to the University of Toronto's new Vector Institute, and the hiring was praised by U of T President Meric Gertler as an example of tilting "the brain drain back in our direction."
Others were less enthused: Former BlackBerry Ltd. co-CEO Jim Balsillie lamented that Dr. Urtasun would draw a taxpayer-funded salary while the intellectual property generated by her work goes to a multinational corporation. He told The Globe that the government's artificial-intelligence strategy overall was "working to turn Canada into a branch plant economy that aims for pennies while ignoring the innovation billions."
That kind of rhetoric has been growing louder and more frequent, and the national strategy, vague as it is, is the government's first response.
Whatever consultation process shapes up over the coming months, government is likely to hear a few themes – and specific policy levers – crop up repeatedly from Canadian IP experts.
Educating
Foremost among them will be making sure that Canadian innovators, from university researchers to founders of small businesses, are educated on the basics of IP.
"People don't know much of anything about IP, patents, trademarks," says James Hinton, a lawyer and patent and trademark agent with Bereskin & Parr LLP, and an assistant professor at the University of Western Ontario. "Korea and the U.S. have this at the high-school and university level, and the patent office in the U.S. certifies law schools so they can help startups with IP issues, filing patents, and so on. This goes back 20 years there, and we're just getting on it."
Prof. Tawfik concurs. She believes any national strategy must include concrete educational elements: from increasing federally supported direct-to-business self-help tools, to incentivizing pro-bono legal assistance to startups, to mandatory IP training tied to federal research grants.
"Particularly in areas that we've already targeted in the superclusters strategy," she says, "you could start with targeted mandatory training for grant recipients in, for example, agritech or clean tech; training that reaches innovators as they're coming up with ideas, in order to equip them with the knowledge they need to make better decisions about commercialization."
Picking winners
"A national strategy must consider where we need to be in the next three, five, 10 years," says Peter Cowan, founder of Northworks IP, an IP strategy advisory comapny in Victoria. "What does the IP portfolio need to look like to get the best protection possible? Where do we put our resources?"
Canada has already started to map that out via the recently announced $950-million supercluster strategy, focusing federal innovation funding on a handful of sectors in which Canada is well-poised to compete globally.
"From a national view, I think picking the winners is an important discussion," says Mr. Cowan. "As a country we tend to give everyone an equal chance, which is tremendous in some ways, but because funds are limited, we do have to do some picking." That includes choosing where to target educational efforts, where to focus IP protection, and crucially, where a government strategy can most productively be used to clear freedom to operate for Canadian companies – assisting them with identifying IP roadblocks to research and commercialization, licensing necessary patents, and being protected from litigation.
Clearing patents
An increasingly popular model internationally, a Sovereign Patent Fund (SPF) is a state-backed investment vehicle that acquires IP assets, such as patent licences, on behalf of fund members. Besides ensuring Canadian IP remains in Canada, an SPF can clear IP obstacles out of the way for Canadian companies, ensuring that companies are unencumbered by patent restrictions or litigation.
The superclusters strategy seems tailor-made for this model. "If you think about a cluster," says Mr. Hinton, "patents can be acquired, licensed to the fund membership, and then foundational IP is not an issue." Similar funds have been implemented by France, South Korea and Japan, among others.
There are still no specifics on the federal strategy, but experts and thought-leaders in the IP space are eager to see what develops.
"The one thing I'm really cautious about is doing it too quickly," says Mr. Cowan. "Hopefully we'll take the time to put together a good, strong, long-term strategy … because if we just do what we've been doing in the past 10 years, but with more money, it won't work."