Thank you for the opportunity to be here. It's a new experience for me.
I've been a global commercial guy all of my life, in knowledge-based commerce, and there are only three things I want to say today that have some impact or are impacted by how intellectual property is treated and handled.
The first thing I want to say is just that patents—I'm talking largely about patents, but intellectual property as well—are a legal means of providing monopoly status to the inventor or the owner of the information. In that sense, patents become a legal right to fight when infringement of that monopoly state occurs.
The thing I want to say is that the definition of what is patentable has become more and more blurred as technology moves. We don't know quite how to handle the digital world, we're not ready for the quantum world—which is coming—and the software world has caused us lots of problems. In the end what has happened is that patents are granted without proper evaluation. The understanding in the United States, where most of this kind of thing gets defined, is that they'll get tested in the courts. If there is any real value to them, it'll happen in the courts.
I just want to say that for any small enterprises—and generally speaking, enterprises in Canada are small, at least knowledge-based enterprises—the entrance fee to a fight is somewhere between $2 million and $5 million, and that sort of thing just blocks out their ability to take on the fight. What happens, even in the United States where they can do this, is that wisdom and justice are hard to realize, so money and power tend to dominate the decisions that get made.
Yet the U.S. is probably the most successful knowledge-based commercial country in the world. I might say, just in passing, that it has about 150,000 lawyers, which costs the United States about the equivalent of the federal government's budget, so it's not small stuff, and it's very expensive.
The second thing I want to say, which fits with that, is that Canada is a very small country when it comes to the knowledge-based economy. We have half a per cent of the world's brains. Because we have between 7% and 10% of the world's natural resources, we have an economy that is about 2% of the world's economy. So on whatever scale you talk about it, but certainly on the knowledge-based scale, we're very small. As well, for the companies that are involved in that—and that's been my life—typically less than 5% of their business is in Canada.
What that means is that intellectual property has to be protected. Intellectual property is governed by national policies and priorities, so you have to choose every country in the world that you're going to protect it in, and doing that costs somewhere between $10,000 and $50,000 a whack just to get your intellectual property approved and registered in those countries. Then you have to pay maintenance fees, and then on top of that you have to be prepared to fight to protect it.
Canadian companies really need to make those choices wisely, and generally speaking, it means that the ones that succeed are the ones that choose small niche businesses in the world where those big competitors aren't out there banging at you and going to take you on and file a suit. Of course, we can dominate those markets more easily.
That's about the small country and what we have to do there.
The third thing, and probably the most important one, is that the culture of commerce in Canada is very weak. It is poor. We are at the top in our investment in the knowledge of our people, and not matched by any other country, but when it comes to creating value from that knowledge, we're close to the bottom of the list. There is something really wrong. What is it? Well, it's about our culture, and our culture is what we believe to be important and what we believe to be true, and it doesn't have to be conscious for us to carry it on. So scientific people who are objective and evidence-based are not objective and evidence-based about these things.
Our culture is largely shaped by post-secondary learning, and the post-secondary learning environment is commerce-averse. “Customer” is a bad word, “sales” is a bad word, “commerce” is a bad word, and “profits” is a really bad word. The 18- to 25-year-olds, who are pretty easily influenced at that stage, are influenced in that kind of an environment, and I might say, I've been in that environment throughout the whole of my life, too, in one way or another.
What I don't understand is what it is that is so attractive to universities about intellectual property, because they can't use the monopoly. They don't get any money for it. The revenues they get from their patents are about $50 million a year, and, as David has said—he knows these numbers better than I do—the costs of the tech transfer offices and things like that are probably well in excess of that $50 million.
The other thing is, they can't possibly, and wouldn't, play in that game I was talking about: that patents are a “right to fight”. They don't have the money. They're not even in a mode to fight, so they're not going to protect it. Even if they license it, they're going to be stuck with the fact that it isn't protected by the owner. What happens there is that high-tech companies in Canada can't get financed and aren't prepared to carry on their effort to reach commerce if in fact the intellectual property is owned in a post-secondary or a publicly funded institution.
That's a huge problem.
