Thank you very much, Mr. Chair and honourable members of the committee, for providing Open Text Corporation with the opportunity to address you today. We are very pleased to contribute to this committee's study of the effectiveness of Canada's current intellectual property regime.
My name is Gordon Davies, and I'm the chief legal officer and the corporate secretary of Open Text, a corporation headquartered in Waterloo, Ontario, which is publicly traded on the TSX and NASDAQ. Open Text is a leader in computer software applications designed to enable enterprise information management, or EIM. EIM is a comprehensive set of best practices and technologies that address the needs of information workers by providing them with the right information during decision-making, analysis, procedure definition, or process execution. When executed properly, a sound EIM strategy results in significant productivity and efficiency gains, engaging customer experience, and a transparent and defensible information governance system. EIM includes suites of products such as: business process management; customer experience management; enterprise content management, which is the core of Open Text; discovery; and also information exchange.
Open Text's clients are global and include organizations in many fields, including those in the public sector, financial services, manufacturing, energy, and natural resources industries. We were founded in 1991 as a spinoff company by researchers at the University of Waterloo. Open Text has grown to employ more than 5,500 people globally, and it is Canada's largest software company. As I mentioned before, this is a global business with annual revenues in excess of U.S. $1 billion. Over the years, Open Text has won many industry awards recognizing its accomplishments, and it was again named one of Canada's top 100 employers in 2012.
Open Text is strongly committed to technology transfer between research institutions and industry, and to this end it has, among other initiatives, invested in many joint research and development projects with the University of Waterloo.
At the heart of Open Text's success as a company, employer, and innovator in the software field is its intellectual property. Open Text has more than 200 U.S. and 130 non-U.S. patents worldwide, including those in Canada. Open Text, like other information technology companies, relies mainly on trade secrets, including in particular prior art, copyright, and, to a lesser extent, patents, to protect its valuable intellectual property. Protecting intellectual property through trade secrets or by way of copyright is attractive because, one, the registration of copyright is optional and copyright can be enforced without registration, which is, in any event, relatively inexpensive; and, two, trade secrets, by definition, cannot be registered and there are no registration costs.
Patent protection, in contrast, can be less attractive because it is only available through a costly, application-based process. Additionally, patent protection is less crucial for companies such as Open Text who view patent protection primarily as a defensive tool rather than as a means to drive innovation. For instance, a patent portfolio may operate defensively and make competitors reluctant to enforce their own patent rights for fear of facing reciprocal litigation. As well, publicly disclosed applications and patents may create obstacles for competitors to seek patent protection for the same or related inventions. For these reasons, part of Open Text's primary methodology is to ensure that it has a robust system of creating, maintaining, and archiving all of its information and documentation related to an invention, or, as I mentioned before, prior art.
In terms of barriers to patent filing, for companies such as Open Text there are disincentives to making greater use of patents as a means to protect intellectual property under Canada's current intellectual property regime. As mentioned, the primary disadvantage of patents is that they are the most expensive and time-consuming type of protection available to innovators to both obtain and maintain. Companies such as Open Text must incur not only the costs of application fees and maintenance fees to achieve patent protection, but also face attendant legal costs at each step in the application process, and in any eventual enforcement, if that becomes necessary.
In addition, because Canada's patent law and application procedures differ from those in other countries, innovators face uncertainty and additional costs when seeking patent protection for the same or related inventions in multiple countries. Such disadvantages, in our view, may cause Canadian and multinational innovators to choose not to seek patent protection in Canada, but instead look to other jurisdictions to protect and commercialize innovative technologies.
In respect of reform, Open Text recognizes and appreciates the recent initiatives that have streamlined and increased the competitiveness of Canada's intellectual property regime. These developments include the patent prosecution highway program, an initiative that accelerates and reduces the costs of examination of patent applications under certain conditions, through bilateral agreements with foreign patent offices. Open Text also appreciates the government's efforts in the recent reform of the Copyright Act.
We believe, however, that Canada's patent protection regime can become more streamlined and efficient in protecting intellectual property. This can be achieved through further global harmonization of patent law, application requirements, and prosecution regimes. For example, harmonization of the requirements of the content and form of patent applications, together with harmonization of the law surrounding what constitutes a patentable invention, will reduce uncertainty and lower compliance costs when applications for the same or related inventions are filed in multiple countries.
In summary, Open Text believes that Canadian intellectual property reform, and particularly patent reform, should include initiatives toward global harmonization to achieve cost-effective and timely granting of high-quality patents. Innovators and employers such as Open Text would benefit from a competitive intellectual property regime that is predictable, cost-effective, and more consistent with regimes in other key jurisdictions worldwide.
Mr. Chair, on behalf of Open Text, we again thank the honourable members of the committee for the opportunity to make this presentation.