Thanks, Michel.
As I said, I am not speaking on behalf of Pratt & Whitney Canada, but I am happy to share my experience as someone who works in IP within a manufacturing company. Literally, my office is 30 feet from the heart of our manufacturing operations.
Our company designs, develops, and manufactures gas turbine engines for airplanes and helicopters used around the world. Competition in this field is fierce and relentless. The company invests over $400 million a year in R and D and has close to 1,500 employees working in that area. For example, we are constantly striving to improve our products through innovation in performance, weight, and cost. Any development in one of the components that go into an engine can give us an advantage that in turn helps to keep and create jobs in Canada.
Let's take, for example, a replaceable component in a jet engine. An innovation in that component can make a significant difference in engine performance. We can have a patent on the component that protects its shape, its material, or its coatings, for example. We can also have a patent on the manufacturing process for the component if we invented the way to produce it.
We rely on the patent agents with whom we work to ensure that we obtain patents suitable to prevent our competitors from copying our inventions. If we didn't, we would lose the advantages that we achieve through our investments in research and development. For the agents to do this successfully, they must understand the technology and, more importantly, know all the intricacies of patent law, the rules, and the processes. I put a lot of faith in those patent agents, and they have the pressure to deliver. For example, when there is a patent dispute, trials can hinge on a word in a patent claim. I lived through one in the United States in which the stakes were in the tens of billions of dollars.
This is why we need a modern regulatory framework for patent and trademark agents, a framework on which innovators of all sizes can rely to ensure that agents are competent and that they are keeping current. They should see a system that is the same as the one they are familiar with for the regulation of other professionals that they hire, such as engineers, accountants, and lawyers.
Currently, we have only part of a system. The Canadian Intellectual Property Office, or CIPO, administers qualification exams with the assistance of IPIC. This requirement has contributed to the excellence of the profession. However, there is no mandatory code of ethics, no clear discipline process, and no mandatory continuing education. Therefore, we need to complete the regulatory framework.
In this regard, IPIC is pleased that ISED recently held a consultation about the governance framework for agents. A question is whether CIPO should continue to regulate agents or if the profession should be self-regulated.
For the manufacturing sector, the choice of the model is very important because the IP system needs balance.
CIPO has examiners in its patent office who decide if an applicant gets a patent or not. CIPO has an important public interest role in preventing patents from being issued if they are not warranted. It represents the side of the equation that restricts the scope of patents and trademarks and industrial designs so that we maintain a healthy and competitive marketplace.
CIPO has a budget of about $150 million and employs close to 1,000 people to perform its side of the public interest equation. For the system to work well, to protect and thereby incentivize innovation, we also need the other side of the equation. Agents therefore play an equally vital public interest role in seeking those patents.
Obtaining a patent is a back-and-forth process. I endeavour to seek protection that is as broad as possible for the company. A patent examiner may respond that protection of the scope that I am seeking is not allowable in view of the state of the art. Remember that we're dealing with cutting-edge technology, and things are, by definition, not obvious. Through this process, we isolate the invention.
That is where the agents come into play. Patent agents help clients craft patent claims in response to such examiners' feedback. To help properly protect the client's invention, an agent helps assess the validity of those claims and what would infringe those claims. They level the playing field for all applicants, whether big or small; ensure that there is balance in the system; and represent that side of the public interest equation.
I think we can all agree that given this role, they must be competent, must act ethically, and must keep up to date.
If CIPO sets the rules and training requirements and administers discipline and all other functions, it will have a conflict between its primary role of IP gatekeeper and its secondary role of ensuring that the innovators are well represented. The inherent bias in CIPO removes the balance in the system if it regulates agents.
My interests as an innovator are not well served if I can't rely on the independence of my agents. This was stated 20 years ago by a public administration expert, Professor Bruce Doern of Carleton University, in a report commissioned by CIPO in which he said,
...there is no convincing rationale for the patent and trade-mark profession to be so directly supervised by an agency of the federal government in matters of its professional qualifications.
As the federal agency involved, CIPO should focus on its more complex mandate tasks and should not be so closely regulating one of the client groups that it must interact with in other vital public interest ways.