Industry Committee on June 12th, 2012

[Lianne Ing]

Yes, that's right. I think there are a lot of good programs available in Canada. It's beneficial always to take a look at these programs to make sure they're not becoming cases where people are maybe taking advantage of a program and are not actually generating a lot of benefits for the country.

From our perspective as a small company in a fairly niche research field, we want to ensure that these sorts of programs don't start getting narrowed down to where they are focusing on only certain technology sectors. I think it's really difficult for anyone to know what the entire innovation field looks like in Canada. There can be a small company somewhere that no one has ever heard of that is about to come up with the greatest breakthrough we've seen in this decade. You wouldn't be able to predict it just by looking at strategic market sectors or strategic technology sectors.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

One of the things that's valuable about your testimony today is that experiential factor, from the company's standpoint. If you had that small-business person coming to you for some advice on what to do—the business is up and coming, but they don't know where to turn to take that next step—what would you tell them, based on what we have here in Canada right now?

[Lianne Ing]

Do you mean in terms of what programs to look at or pursue?

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Yes.

[Lianne Ing]

I think I'd certainly recommend that they contact their NRC IRAP advisor. The advisors available through IRAP are varied. They have technology advisors. They also have business advisors, and they are able to provide good feedback. They act as sounding boards when you go to them with a new concept or technology. They ask a lot of the questions you would expect investors to ask, for instance, to make sure that you're setting up a very comprehensive business case. They are certainly a good resource.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Great.

You said in your statement something that sort of jumped out at me. You said:

As a result, a small company like ours must be selective about which inventions are protected by a patent. We patent inventions that have a clear and significant potential market and where holding a patent will provide us with a meaningful competitive advantage.

The statement that you have to be selective implies that you have inventions that fit that description, but you also have inventions that don't fit that description, and you choose not to patent those.

[Lianne Ing]

It really becomes a question of prioritization. As a small company, you can only set aside a finite amount of money, really, to cover things such as patent application and patent maintenance fees. As a company that specializes in a lot of science and engineering, we have a lot of scientists and engineers who come up with great ideas that could become patentable inventions, with appropriate funding.

We really have to sit down and prioritize what we're going to spend company funding on, in terms of investment in R and D. We may have a dozen inventions that are patent quality, but we have to then select just a small fraction of those we will actually apply for a patent on. What that means is that there are technologies that end up not coming out and seeing the light of day or that have to go on the back burner, because the costs for patenting are quite high for a small company.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

You went on, and that's what I was going to get to, and said:

As a result, in some cases we rely on trade secrets to protect our IP, or we choose to proactively publish the information to prevent other entities from filing patents for similar inventions.

[Lianne Ing]

Right.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I don't quite understand that exactly. Maybe you could elaborate.

[Lianne Ing]

The two other strategies, aside from patenting, are, first, to rely on trade secrets. That simply means that you try to rely on other legal instruments, such as confidentiality agreements with your suppliers or your partners that prohibit them from releasing certain details about your technology in a public forum. You're simply trying to keep the know-how secret so that you can move forward with a product and launch that product. That really only works when you're dealing with a technology that cannot be easily reverse-engineered, for instance.

The second approach for intellectual property protection is defensive publication. If you're working in a field in which there's a lot of research activity, you know that there might be a lot of groups internationally working in your field. If you make a discovery and you feel that it is prohibitive or not the best business decision to try to patent that, your other option is to go forward and publish that information in the public domain. Once that information is published, if another group were to try to seek a patent on that same concept or a similar invention, that publication would show up when the patent office did a review of the state of the art in the field. One of the criteria for a patent is that it has to be novel and it cannot be obvious to one who is skilled in the art. If you can show that you have come up with a concept and you have published it, it means that another group will not be able to get a patent and block you from using that technology.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay. Thank you.

[The Chair, Conservative, David Sweet]

Of course they could work collaboratively with you on that as well.

[Lianne Ing]

Yes.

[The Chair, Conservative, David Sweet]

Mr. Stewart, for five minutes.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

I wanted to talk a little more about universities. Ms. Fraser, maybe you can help me here. This may be a topic that's quite different from what we've been talking about today, but it's related. It's the idea of scientific research funding at universities.

Currently this government seems to be shifting away a bit from pure discovery or basic science and moving more towards industry-directed research. For example, we've had a decline in the amount of money given to discovery grants, and the elimination of two key grant areas, the MRS grant and the RTI grant, or the tools grant. Also, then, we're shifting our more open scholarships to scholarships and post-doctorates that require more industry partnerships.

I'm just wondering if at Dalhousie there has been a broad discussion of this change of direction or if it's on your radar yet.

[Erica Fraser]

It's very definitely on the radar. Especially for new researchers, for people just starting out, a discovery grant is how you get started. So the fact that those numbers have been declining is definitely noticeable.

I will say that I work in the industry liaison office, so we very much appreciate those applied research industry grants. I think it is recognized that there has to be that balance between sort of blue sky basic research that oftentimes down the road will lead into applied research or commercialization.... But as Ms. Ing has been talking about, in picking winners or whatever else, oftentimes you don't know what's going to be coming out of that basic research until you do it. So we think there has to be a balance. We think there should be both.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Okay. I appreciate that.

I'm just wondering how.... There somehow seems to be this idea that there are these kinds of links in the chain: that you get your basic research, some of it goes to more development, and then eventually it gets commercialized. But those links may not be as connected as they often are portrayed. In Britain they often allude to this idea of calling that a sausage machine, in that you put in the meat on one side and you get your sausages out the other. But having worked in a university for a long time myself, I don't think that's necessarily how basic researchers tick.

So do you have any special ways you try to bring basic researchers more on board with liaising with industry? Are there any special kinds of programs, seminars, or things you do at Dalhousie to try to show basic researchers the value of this?

[Erica Fraser]

We definitely do outreach to our researchers—we being the industry liaison and innovation office. We do outreach to our researchers, making sure they're aware of what programs are available.

We do matchmaking with industry partners if there's somebody in the same field. Oftentimes it's push and pull. We often have researchers coming to us with their ideas, but we also have industry coming to us saying that they need help and asking us who we can suggest.

In both of those ways, we try to make those connections.

As for the other way, oftentimes when a discovery is made without an industry partner, then that discovery or invention is disclosed to our office, and we attempt to commercialize it by finding industry partners for it. So while it's not always linear, such that you have this sausage machine, I would say that there are various mechanisms by which, at any point, that interaction can be made.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Right, and how successful have your commercialization efforts been? I was talking to a gentleman who works out of UBC, for example, who developed natural gas engines for big trucks, and they went on to commercialize it. Westport is the company on the west coast that now does these trucks.

Anecdotally, do you have any similar examples from Dalhousie where you've had these kinds of big-scale and tip-to-tail success stories?

[Erica Fraser]

Sure. For various industries and in various departments at our university, we have successfully commercialized technology. A researcher named Mark Stradiotto has had much recent success in the chemistry field. His product is now being sold and is commercially available.

As well, we have a concrete material that has been developed and is currently being commercialized in Atlantic Canada. Also, we do have several drugs that are currently going through the different phases of clinical trials and that have been partnered with pharmaceutical companies.

So it really spans the breadth of the research that happens at Dalhousie.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Yes, and my fear, I guess, is that if you limit academic freedom—this is a bit like what Ms. Ing has been saying—and if you start steering people in a direction, with companies saying that this is what they're expecting from you and it's not happening....

But also, for academics, if you start limiting the freedom with which they can explore, they go elsewhere, and I've heard this. I've had a lot of letters and e-mails since the changing of the grants. People are saying that their basic research grants are disappearing so they're starting to look elsewhere now, because they signed up for a job for academic freedom, not necessarily to serve industry. They say they don't mind partnering, but they don't want that to be their primary goal.

Are you having forums or discussions at Dalhousie regarding the nature of research at the university? Is it something that you explore often?

[The Chair, Conservative, David Sweet]

Go ahead very briefly, please.

[Erica Fraser]

I would say that's always a topic of conversation.

[The Chair, Conservative, David Sweet]

Thank you.

Now we go to Madam Gallant for the last round.