Evidence of meeting #39 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 universities.
A recording is available from Parliament.
Director, Intellectual Property, Canadian International Council (CIC)
Yes. I think a position could be made at the industry level, or from Mr. Goodyear's ministry, so that there is an IP specialist who answers directly to a minister on these issues. I would say a high-level executive.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Okay, thank you.
You mentioned in your testimony a government program in Denmark that helps to support small businesses and helps them navigate through the IP process. Could you elaborate a bit on that and also point our researchers to where they can get more information about this program?
Director, Intellectual Property, Canadian International Council (CIC)
They can get more information from my report.
I travelled extensively. Denmark did what's called growth houses, which are regional centres of innovation, not unlike what Communitech is doing as well. The difference with the growth houses, which I found quite interesting, was that in addition to the mentorship functions that something like Communitech does, they also had some very small grants, direct investments, to help young researchers and entrepreneurs figure out patentability, or what's called “freedom to operate”, to determine that if they're going to go and develop a technology, they're not infringing on somebody else's licence. They give as much as $500 to $1,500, and some work directly with lawyers for a period of time.
To make it very simple, it's another layer on top of what, say, a Communitech model is doing.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
It's an accelerator centre, a mentorship type of model.
Director, Intellectual Property, Canadian International Council (CIC)
Yes, but it has a focus on IP coaches and it has some direct investment for IP development.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
Excellent.
You also suggested this notion of a patent pool and a patent investment fund. Can you point to any similar models anywhere in the world for us?
Director, Intellectual Property, Canadian International Council (CIC)
The best one I looked at was happening in Europe. The European Investment Bank, the Caisse des Dépôts in France, and several others were pooling money to buy patents. This was the model I was suggesting that Canada look at or even join, because they felt the same way: they were concerned that there were too many patents sitting on the shelves at universities and if they could buy those patents and put them together in patent families and license them, it would be a win-win for the universities, for industry, for everyone. As well, there might be a good little handy investment there for the banks, given what happened with Nortel and how much money those patents brought in.
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
The U.S. has a provisional patent process. Do you have any thoughts or comments on that? Is this something we should consider?
Director, Intellectual Property, Canadian International Council (CIC)
It's a provisional patent process in terms of...?
Conservative
Peter Braid Conservative Kitchener—Waterloo, ON
I'm going back to the spring and the earlier phases of our study. My understanding is that in the U.S. there is a process that allows people to file quickly and speed up the process, and it's a provisional patent protection.
Director, Intellectual Property, Canadian International Council (CIC)
Yes. Most Canadians, as you already know, do file first in the U.S., so they are part of that provisional process anyway. Tony could probably respond as well as to whether Canada could use one, but the reality today is that most companies go first to the U.S. and then to Europe, and the minute they do that, they can do provisional patents.
Vice-President, Corporate Research and Development, COM DEV International Ltd.
We do file provisional patents in the U.S., but there are pluses and minuses to going with provisional patents. You cannot introduce a new IP within it; you have to describe it within the first filing.
There is that quick way, and it is a good way for companies to file, because it sets the date. You can then file patents in the U.S. or in Canada after that date because that sets the priority date, so we're not necessarily disadvantaged doing it in Canada.
I think we file in the U.S. first because that's the bigger market. We want to protect the bigger market.
Conservative
The Chair Conservative David Sweet
I'm sorry; once more, time is up.
Now we move on to Mr. Harris for five minutes.
NDP
Dan Harris NDP Scarborough Southwest, ON
Thank you.
Thank you to the witnesses. This has been good already.
Ms. Mazurkewich, you alluded to the patent investment funds in your earlier remarks. Without delving into it, are there one or two examples of other countries that have this that you think we should be looking at?
Director, Intellectual Property, Canadian International Council (CIC)
Yes. Europe is already developing one. France has one already. China is starting one. Quite a few are developing. Japan has one. Korea set up a very aggressive one. They're emerging all over the world. These sovereign patent funds are being created to go up against the private patent funds that already exist out there and are highly litigious.
NDP
Dan Harris NDP Scarborough Southwest, ON
If we had had such a patent investment fund, do you think we might have been able to maintain more control over the patents that were sold off when Nortel went bankrupt?
Director, Intellectual Property, Canadian International Council (CIC)
They would have bought them.
NDP
Dan Harris NDP Scarborough Southwest, ON
It also is interesting, and other witnesses mentioned it previously, that the IP from Nortel had more value than the bricks and mortar assets, and that it sold for more money.
You were talking about Canadian start-ups being bought by other companies and brought to different areas. Obviously they're going to be of different sizes, but would there be an average size to those companies when they get gobbled up?
Director, Intellectual Property, Canadian International Council (CIC)
They get gobbled up in pretty early stages. I think an average would be around the $30 million mark. Tony, do you have an idea?
Vice-President, Corporate Research and Development, COM DEV International Ltd.
I'm not as familiar with that. They generally get into an area where they're starting to make inroads, but they still need further capital for investment, and that's where they have difficulty; they can see the market potential. I think it's in the $10 million to $30 million range as well.
Director, Intellectual Property, Canadian International Council (CIC)
Yes, they are.
Vice-President, Corporate Research and Development, COM DEV International Ltd.
They would already be started in business. They can see they're entering the market and they've got some start-up markets. That's why they would buy it.
Director, Intellectual Property, Canadian International Council (CIC)
That's why it's attractive.
Vice-President, Corporate Research and Development, COM DEV International Ltd.
They've validated the business at this point.