SWAT teams and patent trolls: inside Ottawa's IP plan to promote Canadian innovators
Federal government wants Canadians firms to reap rewards of cutting-edge research and science
Canada will bring in new rules to protect innovative companies from foreign predators, and create programs to help them leverage intellectual property to benefit both their bottom lines and the country's economic growth.
Innovation Minister Navdeep Bains announced Canada's first national IP strategy today at Ottawa's Bayview Yards, an old municipal repair shop that's been converted to a technology centre, now home to 34 entrepreneurs.
"Intellectual property is often forgotten or misunderstood," Bains said. "But IP is the most valuable asset in the knowledge economy. IP rights like patents, trademarks and copyright are key enablers of innovation."
The strategy includes:
- a new "SWAT team" of experts inside the federal government to help small and medium-sized firms develop and retain control of their intellectual property;
- initiatives to promote IP awareness and education among Canadian entrepreneurs, particularly companies run by women and Indigenous people;
- $30 million for a pilot project to create a patent collective in Canada, where companies can share IP expertise and strategies;
- new funding totalling $18.7 million to resolve disputes over IP and copyright cases at the Federal Court of Canada, and;
- legislation to protect patents, copyright and trademarks of Canadians firms from so-called "patent trolls" outside the country — holding companies that routinely go after Canadian firms claiming their products infringe on patents they hold.
"This strategy is long overdue and obviously welcome," said Benjamin Bergen, executive director of the Council of Canadian Innovators, which represents 90 small and medium-sized companies with annual revenues ranging from $10 million to $1 billion.
"What this will help us do is keep IP in Canada, and ... protect the investments made by governments, universities and other public agencies."
Intellectual property — the ideas, science and research behind commercial products — is too often overlooked by small and medium-sized Canadian companies when they're working to expand into foreign markets.
That's why much of the strategy's focus is on education. The federal government proposes to spend $17.5 million over five years to assemble a dedicated team of IP advisers across government to ensure government programs and policies allow Canadian companies to better protect that work.
We have a really good opportunity here. Canada has all the ingredients. We just need the recipe- Mai Mavinkurve, COO Sightline Innovation
Another $1 million will be spent over five years to support IP legal clinics.
The strategy also is intended to maximize the benefits of government financial support for companies in the innovation sector.
Mai Mavinkurve is the chief operating officer of the Canadian firm Sightline Innovation. She served on one of the advisory boards created by Bains' department to help draft the strategy.
Mavinkurve said Canadians need to understand that public money is being invested to help companies innovate — but too often the rights to that intellectual property end up in the hands of foreign-owned companies.
"It would be a huge benefit if IP created in Canada is retained and controlled by Canadian companies," she said.
"We have a really good opportunity here. Canada has all the ingredients. We just need the recipe."
Canadian officials compare control over IP to control over other kinds of property: companies either pay rent for the right to use it, or collect rent from those who use theirs.
The IP gap
Right now, Canadian firms pay $6 billion more to U.S. companies for the right to use their IP than they get in return. Ottawa wants to close that gap.
Hamid Arabzadeh is another Canadian entrepreneur who thinks the government's focus on protecting IP is both welcome and overdue. His company, Ranovus, employs 50 people in the optical communications field in Canada; roughly a third of them hold doctorate degrees.
Arabzadeh said it's a constant challenge for small companies like his to protect the intellectual property behind their products from Amazon, Facebook and other tech giants which have far more to spend on acquiring patents.
"They have significant resources to allocate to this type of warfare. We have to be careful, even with our own customers," he said. "Isn't that interesting? Multinationals might employ Canadians but their priority is shareholder value — and that rests outside of Canada."
He said Canadian companies need training and expertise to recognize intellectual property as a critical part of their company's value.
"And that's really the unfortunate situation with IP. It's like a natural resource. People just use it without knowing how much value it truly has."
Fighting the trolls
The last piece of the strategy is legislation to make it more difficult for so-called 'patent trolls' — holding companies based primarily in the U.S. which buy up patents and use American courts to claim new innovations infringe on those patents — to force companies to pay millions in licensing fees.
That's what happened to Research in Motion — the company behind the BlackBerry smartphone — and other Canadian companies in the past.
Government officials (who were not authorized to speak publicly in advance of Bain's announcement) said the proposed law will require any claims made against Canadian companies to be heard by Canadian courts. And, unlike the case with U.S. law, it will require the complaining company to identify which patent has been infringed, and how.
"They will have to come to Canada to make their case rather than the other way around," one official said.