Thank you so much.
Good morning, Mr. Chairman and members of the committee. First, thanks very much for the opportunity to appear in front of this committee to discuss the experiences of our company, Larus Technologies, with regard to intellectual property in Canada.
Let me begin by briefly introducing our company. Larus was founded in 1995 by our current president, Mr. George Di Nardo, and we've established ourselves as a sensor networking and data fusion solutions company. We develop advanced systems for multi-sensor data aggregation, collection, display, exploitation, and fusion, mostly for defence and security.
We are Ottawa-based. We're entirely Canadian, and we have three core business areas: sensor networking and data fusion, software engineering consulting, and research and engineering. That's really why I'm here—the research and engineering part. We have developed significant software expertise and operational experience, both selling to and servicing DND, Canadian Forces, and NATO. We are also relied upon as the prime Canadian developers of many NATO standard agreements, or what are called STANAGs, that serve to establish and maintain interoperability between the allied nations.
The main issue our company has faced revolving around IP is in regard to IP protection funding in Canada. Funding is typically required for three phases that are involved in patent protection. The first phase is the filing phase, and Canada has done a very good job through IRAP and other initiatives of helping organizations such as ourselves to subsidize the cost of this phase.
The second phase is the prosecution of IP, and here we don't have as many funding channels. There is an existing gap for this phase.
The third phase is international filings, and again, here there are even fewer funding channels available in Canada. Typically, a company has to evaluate whether the invention in question is worth patenting. So we have to ask ourselves, is this novel? Is this non-obvious? Is this useful? But being an organization, a corporation, we have to also ask whether it provides a corporate competitive advantage. Does it reside with an identified target market as well?
If all of these are true, the company goes through the patent process, which involves, as you know, literature patent survey, invention disclosure, patent preparation through lawyers, and, obviously, filing of the patent. There are a lot of costs associated with this process. As I mentioned, IRAP has a fund called ARP, the accelerated review process, that supports Canadian companies when making the decisions to patent or not.
As I mentioned, very few programs exist for the prosecution, the enforcement, and/or the international filings of a patent, which carry significant legal fees. This is unlike other countries. China, for example, has special programs that are dedicated to international filings alone for their local companies. That allows them to better compete on the global stage, and obviously to better protect and hence to market these technologies as their own.
Of course, not all ideas or inventions that come out of R and D are patented. A company has to balance the costs and benefits of doing so. To protect an IP, we can go through a patent, we can go through copyrights, we can go through trade secrets, or we can go through public dissemination. We can simply publish it in a conference or journal, and no one else is allowed to patent it in that manner.
For SMEs, small and medium enterprises such as ourselves, it becomes a matter of cashflow management. Typically, Canadian SMEs would rather hire employees in Canada than invest hard-earned funds to file and protect their IP. Why do I say that? This is the core of my six to seven minutes. It's really the technology valley of death, TVoD—I come from a military defence market, so we like to acronymize everything.
It is an ever-growing problem in Canada. It was recently described by another researcher, Dr. Russell Eberhart. We invited him up to Canada to attend a conference, an IEEE conference called CISDA, in July here in Ottawa. CISDA stands for computational intelligence for security and defence applications. He gave a talk. He's from the U.S. He described a very similar thing that is happening in the U.S., but they're trying to resolve it, and I'll talk a bit about how they try to resolve it.
TVoD occurs around what we call TRLs, technology readiness levels, and there are one to seven or one to nine levels, depending on what you look at.