Thank you very much for inviting me.
Good morning, ladies and gentlemen.
Because I only had two days to prepare, I didn't get to translate my brief into French. I apologize.
I'm here in my personal capacity, not as associate dean, but as a James McGill professor in both law and medicine at McGill. Not to be too immodest, I am Canada's leading independent expert on patent law, and I have a particular focus on technology transfer partnerships between the university and industry. I have advised the alphabet soup of international organizations, such as WIPO, WHO, OECD, UNITAID, as well as Canadian and provincial governments. I have given advice internationally. I've talked to basically every single political party, although I don't think I've had conversations with the Greens yet.
Most pertinent to this discussion is that I was the lead expert on the OECD counsel's recommendation on the “Guidelines for the Licensing of Genetic Inventions”. Also, I was the author of the OECD's report, “Collaborative Mechanisms for Intellectual Property Management in the Life Sciences”. I have done extensive work with the tech transfer community in Canada, the United States, and internationally.
I sent in some slides. I'm not going to talk about them because we can't see them, but I'll leave that for the staff. We all know the background. We're very good in Canada in generating ideas; what we're not so good at is transforming them into innovation. If we look at the pharmaceutical, aerospace, and electronic sectors, all sectors that we think are strong, we're actually pretty poor in terms of our exports.
If you look at the top technology firms—this is from a Pricewaterhouse study in 2015—they gain about 60% of their revenues within Canada. Given how small Canada is in the world, that is a worrisome trend. We should be exporting much more than that.
The problem is essentially one of lack of investment and infrastructure—more intellectual than physical—which comes down to a failure of innovation policy. In terms of the universities, we've been pursuing the same policies of tech transfer for 30 years. They have failed. Every time they fail, we say, let's just try harder. We try harder and it fails again. It's time for something new.
The end result is that by ignoring innovation policy and just following things that don't work, we've lacked in an ecosystem in which firms invest, develop, and export technology. The end result is that our universities create knowledge, transfer it mostly to the U.S., but also other foreign firms, and they sell it back to us. We're paying twice for the same thing and not mobilizing that knowledge.
In terms of intellectual property, Canada is in compliance with all international laws. However, we do not exercise all the flexibility that international law offers us to ensure that we're helping our local innovators. There is no credible evidence that increasing intellectual property rights will lead to domestic innovation. I have to cite the MacArthur genius award winner Heidi Williams, who concluded, “we still have essentially no credible empirical evidence on the seemingly simple question of whether stronger patent rights...encourage research investments into developing new technologies”.
My own research with Jean-Frédéric Morin at Laval suggests that IP does not cause growth; growth causes higher IP. What we need to do is think outside the box and have a made-in-Canada solution within the international scheme. In particular, our universities have to break away from what they've been doing for the last 30 years and focus less on patenting. We're bad patentors at university.
The people who get their stuff patented are inventors who complain—the squeaky wheel. There's no business planning around it. When the patents are issued or sought, they're not necessarily sought for the right things, and so most of them go nowhere except to trolls. The only people who pick them up are patent trolls who will use them against our firms. There's just no capacity within the university to think about how to do this. Instead, it's the industry that needs to patent.
Instead of having this idea that we come up with ideas, patent them, and transfer them, we need to create new forms of partnerships and leave it to the private sector to get the patents.
One of the impediments is that we have little knowledge about how to use intellectual property. As I said, we tend to look to the U.S. for mechanisms, but even there the universities do not make money, except for the top 15, and most of them don't actually lead to much innovation.
What I want to suggest in my remaining time are some models to think about.
In Montreal, we have the Montreal Neurological Institute and Hospital, recently funded in part by the federal government, the provincial government, and a $20-million gift from Larry Tanenbaum of Toronto. The idea is that all the data will be made public, and there will be no intellectual property. The advantage of that is that it brings down the cost for companies to interact with universities. The thing that I hear constantly is that it takes too much time to negotiate one-off agreements with universities.
Everybody is thinking that their little piece of IP is a lottery ticket, and they don't want to give it up. What that does is impede all but the largest companies from entering into agreements. By getting rid of intellectual property within the mandate of our research, we can allow in a whole bunch of companies. In the biotech—as is the Montreal Neurological Institute and Hospital—and life sciences, we can bring in IT companies that normally wouldn't come in because of these costs. Then we allow the firms to patent around it. If they get good ideas, products, and services, that's great. They patent it, but the university stays out.
That model, we think—and I have done some work on this that the committee will get later—should generate an ecosystem because we will get more firms involved with university research and allow the people who have the strategy to develop it.
That is one approach. There have been others. The BC Cancer Agency also has a form of openness. The Structural Genomics Consortium, based out of Toronto, has its own form. All of these have been exceedingly successful in attracting industry financing and in engaging industry. I would suggest we think more about that.
In Quebec, we have a different model with the aerospace industry through CRIAQ, whereby, within the partnership, everybody gets to use everybody else's intellectual property outside. They can license it.
All of these show that there are different ways of thinking about technology transfer that don't involve the universities necessarily getting any, instead leaving it to the private sector.
To make it effective, however, we need to build up strategic knowledge about intellectual property. We don't do a very good job. We don't educate our researchers about intellectual property. It's not Canadian intellectual property that's driving innovation; it's American and European. It's thinking about non-traditional IP, like standard-setting internationally. All of these drive innovation. We need our researchers and our firms to have a better understanding. We need more courses in this and more points of training, to the extent that we can use large collaborations like the superclusters to provide that training. That would be great.
We also need to recognize the fact that we're small in a big pool. We have to somehow bring together the intellectual property that's stretched across our country, whether through a patent pool or through a rule that when the federal government funds research that results in a patent, that patent cannot be used against Canadian firms. We have to unleash the power of charities. Our tax laws are pretty restrictive. We have to allow our charities to better invest in the sector.
Those are the types of things we need. It's not about intellectual property. We know that making universities all abide by the same rule of university-owned or inventor-owned doesn't make a difference. It's the soft stuff we need, not hard rules.