Industry Committee on Oct. 30th, 2012

[Dan Harris, NDP, Scarborough Southwest, ON]

I can say in my own experience of going out and working in the oil sands and having to buy my personal protective equipment, my PPE, that of course everything is based on the CSA standards. It would be quite frightening to think that I might have ended up getting some counterfeit protective gear. It certainly could have put my life or the lives of the tens of thousands of workers out there at risk. I think we need to see some action; it has been five years.

I'm going to go back to Mr. McDougall, provided I have time. Since the chair's not looking at me, that means I do.

You mentioned that in early-stage development, the NRC takes on more risk in those endeavours, and as such expects more ownership of the IP. I think that's perfectly reasonable. You mentioned in the shifting of direction at the NRC that the expectation of return that would exist with industry playing a larger part...that you still want to hold on to the IP.

How do you realistically expect the NRC to hold on to that IP when industry's taking a much larger role and has an expectation of return?

[The Chair, Conservative, David Sweet]

Please be as brief as possible.

[John McDougall]

Yes.

Well, I obviously wasn't clear, because what I was trying to say is that when you're upstream you have less industry participation. The further you are away from the markets, especially from a time point of view, the more difficult it becomes for industry to invest, because their models discount the returns that they get, and the longer the time, the less the return in their mind.

So you have to deal with it, and that's why you have a progressive kind of a model.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. McDougall and Mr. Harris.

Now on to Mr. Lake briefly, and then over to Mr. McColeman.

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

I'm not going to ask a question, I am just going to make a point.

Mr. Harris made a point earlier about counterfeit. I just want to point out that, of course, prior to his time here, we had a minority Parliament, and it was very difficult for our government to pass anything that strengthened our laws because the opposition parties would rally together against it.

So when the government does move forward to take measures to strengthen the laws in these areas, I'm hoping it will have the NDP support on that.

[The Chair, Conservative, David Sweet]

Mr. McColeman, the time is running.

[Phil McColeman, Conservative, Brant, ON]

Thank you, Chair.

I'd like to go to Mr. McDougall. We've heard testimony at the committee several times that underscored that Canada does not do a great job of commercializing IP, and I think you've touched on it a little. We are good in the labs with inventions, good with innovative ideas, but turning those into actual commercialization, we rank far below other countries.

You've been talking about the kinds of transitions you're making. We've heard from post-secondary institutions that use various different models to retain ownership—for example, 50:50 arrangements. Others hold it 100% and others just absolutely open it up wide in the spectrum of things. I'm intrigued by that possibility, and there's been talk about an IP czar kind of overseeing that.

I'd like your views in a general way around some of those issues that I've just mentioned and particularly the ownership of IP and the thought being that if you open it up, if it wasn't proprietary to one source in the pre-stage of IP—not after the actual product's been developed but in the very early stages—does the NRC see themselves playing a role with kind of opening up to that more entrepreneurial way of looking at things?

[John McDougall]

I think with your question you actually touched the heart of one of Canada's real challenges. It's not a challenge that's faced by just Canada, but others seem to have come to grips with it a little better.

IP should be an enabler, not a barrier, first of all. One of the challenges that inventors have in general is a tendency to overvalue the importance of the technological component relative to everything else that has to go in. That leads to an awful lot of conflict in negotiating, especially where you have in many cases in the academic environment almost an individual negotiation, even though sometimes you go through these transfer offices.

One of the advantages of trying to move NRC more squarely into the mission-oriented and applied and outcome-based environment is you get more pragmatic about those decisions. IP is of zero value if it's not used. That's one of the things we have to remember, because a lot of people do forget that. That's why I'm trying to emphasize not a formula approach but rather a pragmatic approach: what are we trying to achieve, and what's the best way to achieve it? Let's do it accordingly.

[Phil McColeman, Conservative, Brant, ON]

As part of that kind of approach of seeing things in a much more environment versus closed environment, would you agree that this enhances the chances for more commercialization to happen here in our country?

[John McDougall]

Not necessarily: that's the problem. It depends on how good you are at harvesting things. A lot of others around the world are very good at harvesting things. In fact, they're harvesting today out of Canada in very sophisticated ways, some of them along the lines that we've talked about that are maybe a little more nefarious than others; but others in very straightforward ways, where in essence we're selling off technology as a non-processed resource.

So we need a way to build a little more depth and capacity in Canada in order to make sure there are receptors who can actually take advantage of it, because otherwise that will continue.

[Phil McColeman, Conservative, Brant, ON]

What are your thoughts on this conceptual idea of an IP czar?

[John McDougall]

An IP czar could cover many things, but I think one of the challenges is that if we think we can solve the problem by edict, we're probably misguided. I think we need people who understand really well and that Canada kind of has an IP strategy, for sure, that recognizes how we're going to play in broad terms. But I think it has to be principle-based, not rules-based.

[The Chair, Conservative, David Sweet]

Thank you, Mr. McDougall.

Now to Mr. Stewart for five minutes.

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

Thank you, Mr. Chair.

Within the NRC there seems to always be a tension between basic and applied research or commercializable ideas. Ms. Gallant referenced the value of the basic research that the NRC produces.

I asked the Library of Parliament to look into this a little bit for me, and they said that between 1997 and 2008 the NRC produced over 12,000 peer-reviewed articles, which is almost 3% of all peer-reviewed articles produced in Canada.

Do you think these changes will increase or decrease the number of peer-reviewed articles that the NRC produces?

[John McDougall]

Again, if we move into a more industrial space, which we're talking about doing, the peer-reviewed articles will decline. The industrially oriented articles will rise. What we'll start to see more of is publications in industrial-type publications as opposed to peer-reviewed.

Peer review, again, has benefits and challenges. My point would be that you actually need both in your system, and that the real question is about the balance and making sure we have a complete system. Right now we're a bit overly biased toward what I call generating knowledge as opposed to generating outcomes. What we're trying to do is push the balance a little more toward outcomes.

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

How far to do you see the decline going? Do you think it will be half the number peer-reviewed?

[John McDougall]

The decline? I don't think that's a measurable or estimable thing, but—

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

And that's not part of your—

[John McDougall]

No, it's not a metric, really.

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

You're not using peer-reviewed articles as a metric for measuring your success?

[John McDougall]

Historically we did.

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

But you've stopped that.

[John McDougall]

We're moving away from that, yes.

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

I noticed that you were in Wellington, New Zealand, and you presented a paper called “Increasing the Impact of Canada's National Research Council”.

Would that outline some of the changes that you're planning for the NRC?

[John McDougall]

I'm sure there are things in there that will be very aligned with what we're trying to do, absolutely. It might not be complete, but it—