Evidence of meeting #35 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 intellectual.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Harry Page  Chief Executive Officer, UBM TechInsights
  • Richard Gold  Professor, Faculty of Law, McGill University, As an Individual
  • Chris Tortorice  Corporate Counsel, Microsoft Canada Inc.
  • Dale Ptycia  Senior Manager, Licensing, Hockey Canada

June 7th, 2012 / 10 a.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

I have to confess that this is my first meeting at this committee, so I'm no expert on this, nor will I ever be. But it appeared to me when Mr. Gold and Mr. Tortorice gave their opening statements that there was some fairly significant degree of differing views, if I could say that. As a person who is just beginning to learn this file, I would be interested in having each of you give me a one-minute statement.

Mr. Gold, why do you think we currently meet all our obligations?

And Mr. Tortorice, you think we have further to go in some of these issues.

Maybe I missed some of the nuances of what you were saying, but if I could have a minute from each of you....

Or am I running out of time?

10 a.m.

Conservative

The Chair David Sweet

You have about 40 seconds.

10 a.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

There you go.

10 a.m.

Professor, Faculty of Law, McGill University, As an Individual

Richard Gold

We're both lawyers, so we're both right.

10 a.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

So 40 minutes would be more appropriate?

10 a.m.

Professor, Faculty of Law, McGill University, As an Individual

Richard Gold

Technically, and I think Mr. Tortorice would agree, we do meet all international agreements that we have ratified. I think he was suggesting that Canada has signed but not ratified certain treaties from the World Intellectual Property Organization, which would include TPMs, etc., and he would like us to comply with those even though we have not yet ratified them.

So we meet the current state of intellectual property law, internationally. If we were to ratify those without changes, our laws would not be in compliance. However, there are a lot of different ways one could implement those.

10 a.m.

Corporate Counsel, Microsoft Canada Inc.

Chris Tortorice

There is perhaps a nuance in there that I don't fully appreciate. I would hope that if Canada were going to sign those treaties, it would be prepared to live up to them. I think our trading partners, once we've signed those agreements, look to us to live up to them.

Whether it's implementation or formal ratification or whatever word you want to say, copyright is a perfect example. We're not finished yet. We're close. Everyone is pleased that it has gone as far as it has. We need to get the job done to make sure that Canada's keeping up with those obligations. Once it signs those treaties, I think it's time for Canada to measure up to the international standards that other countries that have signed them are living up to.

10 a.m.

Conservative

The Chair David Sweet

Thank you very much, Mr. Tortorice and Mr. Albrecht.

Yes, that was well more than 40 seconds each.

Now we go to Mr. Harris for five minutes.

10 a.m.

NDP

Dan Harris Scarborough Southwest, ON

Thank you very much.

Thank you to everyone for being here today.

Just to follow up without increasing the chances of some conflict arising, Mr. Gold and Mr. Tortorice, perhaps very quickly—in less than 40 seconds—do you think parliamentarians should have the opportunity to study these new agreements before Canada signs and ratifies them?

10 a.m.

Professor, Faculty of Law, McGill University, As an Individual

Richard Gold

That's a loaded question. I'm trying to find a lawyerly answer to it.

I think any time we enter into international trade agreements that have an impact on Canada, all Canadians, including our representative, should be debating how that is done. I don't know what the best way to do that is. That is your bailiwick. And I take the government at its word that it will be open and transparent about it.

I understand that during negotiation processes there are sometimes restrictions, but I would anticipate we would all have an opportunity to discuss them and look at the implications of them and the perhaps unforeseen implications of certain things at some point.

Hopefully that was a diplomatic enough answer.

10 a.m.

Corporate Counsel, Microsoft Canada Inc.

Chris Tortorice

That's tough. The way in which international agreements are negotiated is sort of beyond my comprehension most of the time, so I think I would have to defer to Professor Gold's view, which is that it would be great to have information made available as soon as possible so that people could have an opportunity to review and comment on it, but I don't know how much further than that I could go.

10 a.m.

NDP

Dan Harris Scarborough Southwest, ON

That's great. Thank you.

In your opening statements, I think all of you made some very important remarks about IP, and I think it was pretty unanimous that we do have to protect our intellectual property. Certainly there are different approaches and views as to how to do that, and where we should be headed. Mr. Tortorice brought up Japan, which of course has a different IP regime, which is more focused on receiving those internal strategic benefits of holding IP so that it benefits their local businesses in a significant way. Michigan is perhaps also moving in that kind of direction.

On that front, of course, we've had some large cases in Canada--for instance, if you look at Nortel, in which huge volumes of IP were sold off, and we just most recently had changes to the Investment Canada Act that are raising the threshold. In any case, if just intellectual property is sold off, that's not subject to review under the act. We've been trying for a while to get this committee to start a study on the Investment Canada Act, and as yet we've been unsuccessful.

Perhaps across the board in the remaining time each of you could perhaps offer an opinion as to whether you think it would be valuable to look at including intellectual property in the Investment Canada Act, so that we don't sell it all off.

10:05 a.m.

Chief Executive Officer, UBM TechInsights

Harry Page

To start, to go back to your Nortel example, when Nortel was broken up, the operating companies with Nortel—with all the patents related to the people, the equipment, and all the contracts installed—sold for a total of $3 billion to four foreign companies. The residual patents that were left—around 6,000 patents—sold for $4.5 billion, or 50% more than the entire operating units of Nortel. That was without any review whatsoever.

The core of the value of Nortel was in their patents, and that went on to a consortium, obviously, of six foreign organizations, without review. That was the value of that company.

We are in a knowledge-based economy, and the fact is that intellectual property can be sold without review. Intellectual property that has been significantly funded by the government through IRAP, SR and ED, and various funding organizations and programs like that can be sold literally without review and significantly monetized against Canadian companies moving forward. So there's a double jeopardy to the country in a situation like that.

10:05 a.m.

Professor, Faculty of Law, McGill University, As an Individual

Richard Gold

I don't claim to have any expertise on the Investment Canada Act, but I will just follow up on Mr. Page's comment that 1992 or 1993 was the big year when most of the assets went from being physical to most of them being intellectual. In some industries it's upwards of 95%. So to not consider the value of intellectual property is to miss out on what is very important to many industries.

10:05 a.m.

Corporate Counsel, Microsoft Canada Inc.

Chris Tortorice

It would be very tough to know. Nortel is an easy example. You can say that there were thousands of patents and they had a huge value to other companies, but sometimes the most valuable patents are the ones where you haven't quite figured out what you have yet, and I don't know how the government would get involved in reviewing that.

There's probably a place where there can be a line drawn as to where the significance of the assets becomes so great that you say it should be looked at, but it's very difficult to know, because sometimes you find out ten years later; you dust off that patent and finally realize what you have. It's a challenge to know how.... You can't be involved in reviewing every deal that involves intellectual property, because those are assets that companies cross-license and sell back and forth fairly freely.