Industry Committee on Oct. 3rd, 2016

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

Thank you for coming today to give us some very important information.

I will first talk to the Intellectual Property Institute of Canada.

You went through some discussions about the idea of a college, similar to that of the engineers and physicians and surgeons. There are some issues that occur under those circumstances and those groups as well.

I wonder if you could expand on how you feel that would develop with the code of ethics you were speaking of, as well as the competency requirements to make sure that the people who are dealing with patents and IP information are able to maintain the credibility and skills they need to keep up in an ever-changing world.

[Michel Gérin]

One thing that does not exist today that a college would require is continuing education. As more and more is done in the professions, whether by engineers, lawyers, or doctors, there is a requirement that every year you must meet a target in terms of keeping up to date. A college would set those requirements.

That is not to say that agents today are not keeping up to date. They are, on a volunteer basis. The institute provides many opportunities in terms of webinars and conferences to keep up to date, but it's an important factor. You are correct in raising that question, because it changes continuously. The statutes change, court decisions happen that impact intellectual property, and the technology is always changing. The college would require agents to meet certain targets.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

You also spoke of the concerns with being a gatekeeper and, at the present time, trying to make decisions.

The other part that I'm curious about is the backlog. We've heard that if something gets sent in and, in their mind, is not dealt with quickly enough, that seems to be a concern. What would you suggest if people feel that way, and are there things you might be able to do to increase the confidence when patents are sent in to be looked at?

[Jeffrey Astle]

I can answer a bit of that.

We just had our annual meeting a few days ago, and CIPO presented to us statistics with respect to the improvement on their end in terms of the turnover of patents in their office. There were some very promising numbers in there. I think they've been wrestling with improving technology to move these things. A lot of paperwork is handled by those offices, so it's quite daunting to get that work in and out the door, but I think there have been a lot of improvements on their end.

There is not much we can do to speed up that process, other than to work quickly in the interactions we have with our clients and respond as quickly as possible when we have some sort of action from them.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Go ahead.

[Michel Gérin]

That is one reason we proposed the creation of a college instead of having CIPO regulate agents: it is so that CIPO can focus all its energies on its core mandate of processing those patent, trademark, and industrial design applications and not be involved in a task that, in Canada, is not usually done by governments, which is the regulation of a profession. One of the many advantages of a college would be to free up that energy and time at CIPO so they can focus on those backlogs and timelines.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

An offshoot of that is that when you speak to those groups and businesses that are doing work here in Canada and elsewhere, the comment again is that it can be done faster in other jurisdictions. Are there things we should be doing that would allow that, or is that simply a perception that might not have that much bearing?

[Michel Gérin]

One aspect that we touched briefly is to always ensure that our legislation is kept up to date, and that if there are issues—sometimes a court decision will affect how we interpret how our patents should be processed and so on—to be quick in analyzing that and implementing proper policy and sometimes legislative changes. That can help overall in reducing the length of time, because sometimes the slow progress on applications may be due to uncertainty and a lot of back-and-forth when there are changes in the law and so on. The more you can make it predictable and certain, the more it can help to reduce the time.

As Jeff mentioned as well, I suppose looking at the technology aspect would also help.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

To our Quebec furniture manufacturers, we have some of the best furniture in the world. We have the best products. We have the best natural resources. I think we should be proud of all of our natural resources, and that's what we take to the world.

It was great to see your summary of recommendations. In it you identified a number of items, such as dealing with the high cost of innovation and the shortage of a specialized labour force. I wonder if you could, because we have the right people beside you, speak to the high cost of innovation and how that actually affects your members.

[Réjean Poitras]

It is necessary to develop a very large number of products. In the case of the furniture industry, we don't talk about innovation in its pure form. In fact, not many of our products can be patented. Given that the industry is very focused on fashion, it is important to always innovate and design products that closely follow recent trends.

This market evolves as quickly as fashion apparel. The costs associated with the need to constantly develop new products are very high. In addition, it is necessary to participate in product marketing as part of trade shows and by means of marketing tools, at significant cost.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

On the other part, dealing with e-commerce, we've seen the things that are happening as people try to reach out to the world. If you've got a great product to sell, this is what you need to do.

You've outlined a number of possibilities. One is subsidization and the other is trying to come up with other types of support. Who have you reached out to? What would be your thoughts on some type of a subsidization program?

[The Chair, Liberal, Dan Ruimy]

You have about 15 or 20 seconds. No pressure.

[Pierre Richard]

A 15-second answer would be that we are late in the game. We're working with the Quebec government, which was about to release the details of what they call la stratégie numérique. We hope that within that there will be a few indicators of where we can be more concrete in the support that can be provided to our industry. Selling online is one thing, but there's also the huge cost of transportation, because what we sell is rather large, in many cases.

It's a complex game that costs a lot to get into. We have a few more detailed recommendations of perhaps how some of the help could take shape.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Stetski for seven minutes.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Thank you for being here today.

I have questions for both delegations, but I'll start with the Intellectual Property Institute with some basic questions.

How easy is it to get a patent in Canada? How expensive can it be? Are there barriers? What can government do to help remove those barriers?

First, how easy is it to get a patent in place in Canada, and how expensive can it be?

[Jeffrey Astle]

It's an interesting question To get a good patent, it's not necessarily easy. It's always easy to get something bad, but not necessarily good. I could maybe explain that a little bit more.

For an individual looking to get a patent, I think it's difficult for them to know where to go initially. For a large company, I'm already there, so it's a different story. My difficulty is pulling the innovation out of the woodwork, so to speak. For an individual in a small company who has not dealt with the patent agents who work in this area, it might be a bit daunting to find one and figure out what they need to do to start the process rolling when they need to start it rolling. You can do Internet research and hope for the best, but I think there's a bit of a barrier to get in that front door.

Once you're in there, your agent can help break down the problem of what you've invented and how you can get some protection for it. It's a fairly standard process of discussion and consultation to do that.

The costs associated with getting that depend on a number of factors. If it's a simple invention of a mechanical type, the prices are lower. If it's a high-tech patent, something difficult to get, the price will be higher. It also may depend on the expertise—

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

What would the range be?

[Jeffrey Astle]

It's hard for me to say.

I would say probably between $10,000 to $20,000 per patent is sort of a rough range. I think you can find it lower than that, if you're getting in bulk, and if.... It really depends on the technology in question. That's sort of a rough guess, though.

[Michel Gérin]

Quebec's First Patent program provides up to $25,000. That's 50%, so that's—

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Is that one way that government can help them?

[Michel Gérin]

That's one way that government can help.

It's breaking the ice. As Jeff said, it's $10,000 or $15,000 if you're getting your patent only in Canada, but if you're going around the world or if it's a complicated technology, then that's where the costs add up.

There was a study done recently by the U.S. Patent and Trademark Office. University professors did this on behalf of the U.S. office. They looked at 43,000 start-ups in the United States that had asked for and received a first patent. A few years after those companies got their patents, their sales had increased by 50%. Job creation increased by 36% as a result of getting that first patent. It gave them then the propensity, the resources, to continue innovating.

One thing the first patent does for a small business is give them an asset that they can bring when they go to see investors, venture capitalists. They have something to show that somebody can invest in. It's not just for defending your technology but attracting investment.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Somewhat related to that, what's the relationship between a patent that's registered in Canada and other countries? For example, does a patent issued in Canada mean anything in China?

[Jeffrey Astle]

It does not, although it may establish the priority for a corresponding application that you might file in China. There's a point in time that applies, based on conventions between countries. From the date that you file your patent application in the country where you first filed it, you have a certain period of time to then file corresponding applications in other places in the world. However, the patent that you get is only effective in the country in which it was issued.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Is that something we could do differently or better in terms of trade agreements in the future? Could we try to protect that or share that some way?