A Radical New Way of Thinking About our Innovation Economy: Canada’s IP Strategy and the 2018 Budget

March 8, 2018
By James Hinton 

Intellectual Property (IP) is central to innovation because it is the way that companies can own their innovations.  Last year’s spring 2017 budget included reference to a Canadian National IP strategy. Now in the 2018 budget, the financial spend for this National IP strategy was announced.  The spend includes an overall commitment of $85.3M, with three major points directed to help Canada’s innovative companies: (1) a pilot patent collective, (2) IP education and legal clinics, and (3) IP tools.

Patent collective ($30M)

Following the lead of other countries like France and Japan, the 2018 Budget introduces a pilot program for a patent collective (or sovereign patent fund), which will hold patent assets critical to drive national objectives.  Each country has particular innovation issues around core technologies, and the IP strategy and patent collective will reflect that.

What is a patent collective, and why do we need one?  A patent collective is a way to address innovation issues for countries like Canada that have little to no IP assets.  The patent collective can address issues such as IP leakage and the reality of the patent minefields that exist for new entrants.  New Canadian firms are often entering markets built on top of the technology (and associated patents) of larger and often predatory companies. The patent collective will help scale-up companies reduce their risks of exposure to patent infringement, ensuring that Canadian firms can collectively benefit from patent clearance. This will increase their freedom to operate as they expand globally.

Early indications are that the patent collective pilot will likely be a sector specific initiative, relating to an area of Canadian strategic advantage or interest.

For Canadian companies, this should complement their corporate level strategy – allowing them to keep their own strategically generated IP (thus increasing their market share), while working together to reduce infringement risk (and thus mitigating incoming risk from third party patents).

IP Expertise and Legal Advice ($21.5M)

The announcements around IP education and IP legal clinics was another welcome inclusion in the 2018 budget.  IP education for new entrepreneurs is important – one cannot have a successful IP strategy when one does not know what a patent is or the whys and hows of IP (for example, the fundamental differences between trade secrets, trademarks, patents, and copyrights).  This is just one reason why so many in the profession reach out across disciplines (business, STEM, and legal) to teach on the subject of IP.

Having run the CIGI-Communitech IP Law clinic several years ago, there is tremendous value in clinical legal education to both train and grow the pool of IP expertise, while at the same time providing much needed IP legal services to early stage companies.  Some lessons are best learned the easy way – and pro bono legal clinics can achieve long term positive results.

IP Tools ($33.8M)

When I spoke recently to the House of Commons industry committee on the topic of tech transfer at Canadian research institutions (for the Council of Canadian Innovators), there was recognition of a lack of information about what IP is being generated and available at Canadian research institutions and through funding initiatives.  While being cognisant of IP leakage, the online market place will provide transparency to potentially valuable IP and will hopefully lead to improved and increased collaboration with Canadian innovators.

While these three mechanisms are IP specific, there were a number of IP strategies that were touched on by other federal departments.  Other budget mentions include the central role of cybersecurity to intellectual property assets, encompassing the protection of trade secrets and data assets at both the national and company level.

Finally, this budget is a clear pivot from past understandings of IP as a simple legal mechanism, to IP as an innovation asset that can drive domestic economic growth.  We look forward to the announcement of the comprehensive National IP Strategy in the coming months.

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