Industry Committee on Oct. 23rd, 2012

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair, and I want to thank our guests for joining us today.

I'm relatively new to the committee—reassigned, I guess you'd say. This is my third, maybe fourth, meeting on the patent issue.

I'm going to ask a question of Mr. Lumb. I'll just tell you what my view is thus far. From what I'm hearing from all the organizations, the patent system could use some tweaking, but it's not so bad that it's.... It's not a panacea for problem-solving.

One of the issues I've had over the years, not just now, is that I'm not sure we do a good job of producing entrepreneurs, those who are developing IP. It's no good having IP protection if you don't have any IP to protect.

My question to.... I think he's an engineer. Are you an engineer?

[Chris Lumb]

I am.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Lumb, based on your experience, is our educational system doing a good enough job of producing people who have the desire to take the risk instead of just being good managers? Are we developing risk-takers, the people who can develop IP in whatever the system is, whether it's tax credits, as we've heard from RIM, or whether it's IP protection that we're hearing from the pharmaceutical area? Are we doing a good enough job developing the IP capacity here, regardless of the pieces that would help develop it?

[Chris Lumb]

There's only the possibility of giving you a subjective answer to that question, but if I had to come down on one side or the other, I would say no, we're not.

That being said, in the country we're doing a lot better than we have been doing in the past. We can all point with pride to Waterloo as an example of experiential-based learning that clearly has an effect on the approach graduates take coming out of there. There's more willingness by Waterloo graduates to start companies than there is by people who haven't worked in small entrepreneurial companies throughout their undergraduate education.

Lots of other things are being done in other parts of the country, but predominantly, I think no, we're not where we need to be. Waterloo could be an example for more of that to take place across the country.

There are lots of other experiential-based learning programs now, and that's good. There are what universities call capstone projects, projects in which fourth-year students work with industry. There are things like that. There are many programs that graduate studies schools are doing to encourage people doing graduate work to consider entrepreneurship as a career, as opposed to thinking they will be academics, because most won't be, so that's all improving.

You see it in the aggregate numbers. I spoke about some of them in terms of start-ups created by universities. They're pretty good in Canada. The numbers are very good, in fact. We don't give ourselves enough credit for that.

But can we do better? Absolutely, we can do better there.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Elliott, I have a question. I have a daughter who is a co-op student at the University of Ottawa. She's in the business program, not in an engineering or a science program, but I would say that from our experience it's working very well. She's in her fourth year, and it's been a real eye-opener for her. She doesn't know what she wants to do in terms of a career, but she does have an opinion on.... She's worked both in the public sector and in the private sector.

In terms of the students RIM gets or hires through the co-op program they have, what is RIM's expectation of these individuals? Do you have a sense of what you want to get out of that program?

[Morgan Elliott]

Many people have the preconceived idea that we just hire engineering co-op students. Of course, we don't; we bring them from the whole gamut.

What do we expect them to do? We're not giving them the mundane, run-of-the-road jobs that you would get an office person per se to do. We throw them right into the thick of things. We give them assignments. They're just considered regular employees.

At one point in our evolution, at least 25% were co-op students. Security, for which we're really known in the world, was a suggestion for competitive advantage made by a co-op student. Some of our other developments and processes have been suggested by co-op students.

So they're thrown into the thick of it and they sink or swim. It's almost a “try before you buy” program for us as well.

[The Chair, Conservative, David Sweet]

Mr. Wallace, that's pretty well all the time.

[Mike Wallace, Conservative, Burlington, ON]

That's it?

[Some hon. members]

Oh, oh!

[The Chair, Conservative, David Sweet]

Yes. I'm sorry; five minutes goes very fast.

Did you say that 25% of your employees were co-op students?

[Morgan Elliott]

Yes.

[The Chair, Conservative, David Sweet]

That's unbelievable.

Mr. Harris, you have five minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

I think I'm going to feel your pain in five minutes.

An “ouch” goes to my colleague Mr. Regan, with two separate shots there. Certain cuts in Nova Scotia might have to do with enrolment being down.

While I have my iPad, I have to tell you that I like my PlayBook a lot more. I am a techie geek and I like to have it all. At the time, the PlayBook didn't have the 3G capability, so I had to get the other to have stand-alone capability, but for any of my personal use, the PlayBook is way better. I chafe under everything, even iTunes; the PlayBook model is better there.

I want to also speak about the Nortel situation. I'm very glad that RIM was part of the consortium that bought it, and if there was going to be a deal to be made in terms of savings, I'm glad a Canadian company was there.

Of course, the IP sale was huge, but there has been lots of talk that there still wasn't appropriate value assigned to that IP. Do you guys think that Canada should have gotten more out of that deal?

[Morgan Elliott]

Certainly when the patents went, it was a wake-up call for many people, not just in Canada but across the globe, to the value of patents. You're seeing patent litigation in the U.S., and people are starting to realize their value.

As I said to Mr. Regan, it's always incumbent upon a publicly traded company to get the best value for shareholders. In the Nortel bankruptcy, it was incumbent upon them to recoup the costs they could to pay their creditors. At the same time, the government has to protect the public interest in the value they've invested.

There is no easy solution to this. I know that we as a company wouldn't want to see governments block us in our acquisitions in Ireland, in Europe, in Asia.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you.

Madame Nolet talked a little bit about the talent pool. Mr. Wallace was just talking about it as well. I think the best competitive advantage Canada can have is to have people with the appropriate skills mostly fill up those companies and provide the innovation.

As was also mentioned, it's with early-stage companies that we can boost our productivity. Just how critical does each of you think this is, if you had to place it on the list of most important things?

[Chris Lumb]

I'll start.

I think the answer is quite quantitative. New jobs come from early-stage companies. Most new jobs come from companies under five years old. Those are the facts: early-stage companies matter.

[Dr. Pierre Meulien]

It's critical. Just to give you one example, we don't usually run training programs or educational programs—we fund projects—but because of the lack of entrepreneurship in this country, we put a pilot project together to fund an entrepreneur-oriented educational genomics program that gives interface between young entrepreneurs coming from the business schools and our genomics projects. It's critical.

[Brigitte Nolet]

What we're seeing, particularly at Hoffmann-La Roche with our investment and our expansion of 200 jobs, is that there was some debate in the global family about whether Canada could bring some of that top talent. What we're seeing is that we're ahead in recruiting because of the talent that exists within the Canadian borders.

I would also add, though, that when you look around the world, some of the developing countries—the BRIC countries that we talk about—are also training, and their universities are ensuring that they have high levels of scientists coming out of their institutions as well. Therefore, while it's a very important factor in any investment, there are also developing countries that understand how important the talent pool is and are ensuring that they have the right number of individuals who are capable of moving science forward.

[Dan Harris, NDP, Scarborough Southwest, ON]

How important the talent pool has been to RIM over the years has already been well documented, and certainly we want this to continue.

Since my time is going to run out, I would say very briefly, Madam Nolet, that I'd like to see Eli Lilly making some more investments in their Scarborough facilities as well. It happens to be in my riding—

[Voices]

Oh, oh!

[Dan Harris, NDP, Scarborough Southwest, ON]

—around the corner from where my family has lived for more than 80 years. You can certainly pass that along to them.

[Voices]

Oh, oh!

[The Chair, Conservative, David Sweet]

Thank you. That's great advocacy on behalf of your constituents.

We now go on to Mr. Lake for five minutes.

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

I'm going to go to Mr. Lumb, if I may.

Chris, could you elaborate a little? You talked about the difference in the way that U of A handles IP from the way some other universities do. You mentioned the University of Toronto, UBC, and Waterloo as well. Please elaborate on that a little bit. How are they different?

[Chris Lumb]

There are two fundamental approaches in the way universities manage intellectual property, and then there is variance within the two. The two approaches are inventor-owned and institution-owned; that basically says who owns the intellectual property. Then, within them there are various gain-sharing rights that have been negotiated at each university.

Typically, in the U.S., by comparison, intellectual property is institutional. That's as a result of a federal act called the Bayh–Dole Act in the U.S. Canada is somewhat unique in having a larger percentage of inventor-owned IP policies. Within the inventor-owned category, there are different degrees of control that the institution can exert.

In some cases—for example, at Waterloo—they say, “Inventor, you do whatever you want. You don't even have to tell us; you just do whatever you want with the intellectual property. We'll help you, if you tell us and you ask for our help, but you don't have to.”

At the University of Alberta, there's a little more control. The IP is owned by the inventors. They can do what they want, but they have to tell the institution that they have it. The institution makes sure that the ownership rights are clear and so on—that they don't, for example, have a graduate student also licensing technology at the same time as his professor is, or that sort of thing.

However, I'll come back to the point I made earlier. If you look at the numbers of the created spinoffs that are sustainable, it doesn't really matter what the intellectual property policy of the university is. I know from my experience at the University of Alberta that the leadership of the university is very supportive of commercialization and speaks about it, highlights it, celebrates it, supports it when it's happening. That makes more of a difference than what the actual words in the IP policy say.