Evidence of meeting #30 for Industry, Science and Technology in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was patent.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Sylvain Laporte  Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer, Canadian Intellectual Property Office, Department of Industry
  • Gerard Peets  Senior Director, Strategy and Planning Directorate, Strategic Policy Sector , Department of Industry
  • Konstantinos Georgaras  Director, Policy, International and Research Office, Canadian Intellectual Property Office, Department of Industry
  • Agnès Lajoie  Assistant Commissioner of Patents, Canadian Intellectual Property Office, Department of Industry
  • Denis Martel  Director, Patent Policy Directorate, Strategic Policy Sector , Department of Industry

8:50 a.m.

Conservative

The Chair David Sweet

Good morning, ladies and gentlemen.

Good morning everyone.

Welcome to the 30th meeting of the Standing Committee on Industry, Science and Technology.

We have witnesses before us. We also have two items of business, and it looks like we have agreement that we'll leave the estimates and the moving of a possible motion to the end of our meeting. Our meeting will end at 10:15, at which time we'll deal with the estimates and a possible motion from a member.

Now I'll introduce the witnesses who are before us. From the Canadian Intellectual Property Office, we have Sylvain Laporte, commissioner of patents, registrar of trade-marks, and chief executive officer; Agnès Lajoie, assistant commissioner of patents; and Konstantinos Georgaras, director of policy, international and research office. From Industry Canada, we have Gerard Peets, senior director, strategy and planning directorate, strategic policy sector; and Denis Martel, director of patent policy directorate, strategic policy sector.

Is there just one person with opening remarks, or do we have more than one person with opening remarks this morning?

8:50 a.m.

Sylvain Laporte Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer, Canadian Intellectual Property Office, Department of Industry

I'll be doing the opening remarks.

8:50 a.m.

Conservative

The Chair David Sweet

Okay, then, Mr. Laporte, please go ahead.

8:50 a.m.

Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer, Canadian Intellectual Property Office, Department of Industry

Sylvain Laporte

Actually, we have two presentations that we'd like to run you through.

8:50 a.m.

Conservative

The Chair David Sweet

How long do you think you need, Mr. Laporte?

8:50 a.m.

Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer, Canadian Intellectual Property Office, Department of Industry

Sylvain Laporte

We were given 10 minutes each.

8:50 a.m.

Conservative

The Chair David Sweet

Okay, please go ahead.

8:50 a.m.

Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer, Canadian Intellectual Property Office, Department of Industry

Sylvain Laporte

Is that still appropriate?

8:50 a.m.

Conservative

The Chair David Sweet

Absolutely.

8:50 a.m.

Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer, Canadian Intellectual Property Office, Department of Industry

Sylvain Laporte

Good morning, Mr. Chairman, ladies and gentlemen.

Thank you for the opportunity to speak to you this morning about intellectual property. We have two presentations.

Intellectual property is managed in the government through two organizations. The industry department, which is represented by Mr. Peets and Mr. Martel, do the policy development. The three of us who come from CIPO do the administration of intellectual property. CIPO's a special operating agency of the department, so we still work together.

The presentations this morning are split in two, because there is a logic to it. What I'd like to do is start with Mr. Peets' presentation, because there's a logical flow from policy to administration. So if you are okay with that, we'll give the microphone to Mr. Peets.

May 10th, 2012 / 8:50 a.m.

Gerard Peets Senior Director, Strategy and Planning Directorate, Strategic Policy Sector , Department of Industry

Thank you very much. It's a pleasure to be here today.

We spend our days where I work thinking about IP, thinking about how it affects the marketplace, and thinking about how it can be improved, so we really welcome the work of the committee in this area.

I'd like to start by just talking about the IP framework, what it is, and why it's important.

IP is a marketplace framework that aims to spur innovation and creativity, and this is done largely by granting exclusive economic rights. It's also about supporting the dissemination of knowledge. For example, inventors who file patents not only receive rights over their invention, but also consent to their publication. It also recognizes that follow-on innovation is beneficial and useful. The IP regime sets out the terms under which a person can make use of a rights holder's creation or invention.

I think a theme that often comes up in IP is that of balance. IP grants exclusive rights as an incentive to innovate and to create, but these rights are limited to provide for access in the dissemination of knowledge.

The first area of IP that I'll touch on is that of patents. A patent gives its owner a time-limited, exclusive right to prevent others from making, using, selling, or importing the patented invention without permission. Patents essentially provide a market space in which an inventor can recoup their costs without worrying about a competitor copying it. Patents can be licensed to generate revenue. They can be sold and they can be assigned. They're particularly valuable in businesses that have high upfront costs, long product lives, and low imitation costs.

Turning the page to copyright, which is the second element, like patents, copyright exists to provide an incentive to create. It's foundational for a number of important sectors, including publishing, film, music recording, photography, and software, to name a few.

Turning to trademarks, a registered trademark gives its owner an exclusive right to prevent others from using an identical or confusing mark. In contrast to copyright and patents, which are there to provide an incentive to create, trademarks let firms distinguish and identify themselves. In this way, trademarks are essential to ensuring that products are what they say they are, which is a vital ingredient to inform consumer choice. By supporting branding, trademarks are a means of capturing value of an intangible asset for firms as well.

Lastly, to touch on industrial designs, a registered industrial design grants a right on a shape or style of a product, preventing imitation by competition. Like patents, registered industrial designs can be used to ensure that the benefits from upfront investments of time, creativity, and money are realized by the person who made them.

I will now turn to a bit of the policy discussion surrounding IP. I'd like to focus on three factors that I think drive how we think about IP. The first is the simple fact that IP matters now more than ever before. The Conference Board of Canada in a recent study reported that for S&P 500 firms in 1975, intangible assets—a large part of which are IP—accounted for 20% of asset value. In 2008, that figure is 70%. Also, we're seeing the value of patents as evidenced by recent major transactions. The $4.5 billion sale of Nortel patents to a consortium involving Apple, Microsoft, and Research in Motion is one example, as is the sale of Motorola to Google for $12 billion. So IP matters more now than ever before.

The second factor is that IP policy is by definition a global discussion. While IP rights are provided for under domestic laws, trading nations have been working towards broad consensus in a number of areas. Norms and standards have developed. They've been enshrined in the World Trade Organization under the TRIPS agreement, and the World Intellectual Property Organization has been formed, which is a consensus-building body under the UN, and Canada is a part of that.

The final point, which is fairly self-evident, is that IP is a very complex area of policy.

First, it exists as one policy that supports innovation amongst a suite of other policies. For example, competition is also very important to ensuring an innovative and productive economy. There are many stakeholders in each of the areas of IP, with many views, which often conflict. The administration of IP is also key towards realizing its benefits.

I'll now give you a bit of a sense of some of the topline messages we're hearing from stakeholders. As part of our work, we do maintain relationships with stakeholders such as businesses, academia, and advocacy groups to understand their views and where they're coming from. We also undertake research aimed at gathering evidence to support eventual policy-making.

What we have heard from many is that copyright modernization is long overdue. There's a hope among many that it will soon be a fact.

We've also heard from Canadian business that their next major priority is buttressing IP enforcement, including at the border.

Beyond that, we're seeing an emerging policy debate crystallize around some key questions. I've phrased these as questions because these really are issues that we are coming to grips with ourselves. We don't have answers. But I offer these up as potential issues that you might want to consider as you hear from witnesses and consider this matter.

Are patents being effectively commercialized in Canada? What are the implications of new, strategic uses of patents, such as things like defensive patent portfolios, patent thickets, and non-practising entities?

For exporters, are the patent regimes in our target markets sometimes as important or more important than our own patent regime?

Are Canadian SMEs well served by the patent regime?

Finally, are there issues that we need to consider in changing how we administer IP or enforce it in the courts?

I'll wrap things up by touching on Industry Canada's role. My group is in the strategic policy sector. Our core function is providing policy advice to the Minister of Industry on things like legislative and regulatory modernization.

I have responsibilities as acting director general in a variety of areas of policy, including insolvency, investment, and all the areas of IP. As part of our work, we engage in international forums, such as the WIPO, working with our colleagues, and we support international negotiations. Our recent priority has very much been copyright, with successive bills and a major consultation that have occupied a lot of our time.

Other colleagues in the department include those in the science and innovation sector, which is the lead for coordinating federal science and technology policy. On issues such as technology transfer, commercialization, and the use of government IP—the IP that the government owns—science and innovation are the lead.

Finally, you'll be hearing from my colleague Sylvain, who is the head of the Canadian intellectual property organization, which is the body that administers IP in Canada.

To sum up, thanks again for inviting me. This is an important issue for the Canadian economy. We're very excited that the committee is turning to it. We look forward to monitoring the process as it goes on and certainly to helping in any way we can.

9 a.m.

Conservative

The Chair David Sweet

Thank you very much, Mr. Peets.

On page 8, where you asked what are the implications of new strategic uses of patents, you used the term “patent thickets”. Just to be sure that everybody is aware of that term, could you quickly give us a definition?

9 a.m.

Senior Director, Strategy and Planning Directorate, Strategic Policy Sector , Department of Industry

Gerard Peets

Sure. Sylvain can perhaps...?

9 a.m.

A voice

You're taking my first question—

9 a.m.

Voices

Oh, oh!