Good morning, all. Thank you for inviting me.
I'm going to share my insights regarding the problems that SMEs face in obtaining IP from research institutions. I'm going to suggest two or three solutions because it's only a six-minute speech, and hopefully it's useful.
The intellectual property created by university research teams is important for SMEs—no doubt about it. The researchers are generally ahead of the curve. They cross-pollinate between departments, which we cannot do, and they know what is happening in the field and the latest technology. Secondly, the investment required to build a larger intellectual property portfolio, when supported by government funds, helps both researchers and the SMEs.
My take on this now is not to lessen the investment that the government is putting in. Obviously, the government is putting in a lot of money. What I'm trying to pitch here in the next six minutes is how to make that money work better. Where is the bang for the buck? It's very easy to throw more money...and to see the problem go away, but this is not going to happen.
When SMEs contribute cash and in-kind, it shows commitment from SMEs towards research. They already do not have much funds. There is a reason why they are asking for money from government and universities in order to do it.
There are a few things we can do in order to help SMEs. However, getting IP agreements done with the universities and research institutions and others is not as easy as it seems.
I am going to make my next six minutes into three parts: before the project begins, during the project, and after the project; one problem that we face in each; and what we can do—one solution each. That's all I'm going to do here. If there is more, we can always talk about it.
Before the project starts, personally having been involved in negotiating with various universities and research institutions, and from the company's point of view, I see there is a lack of consistent process across the country in application of IP rules within the research institutions. That leads to delays and overhead in spending time with multiple universities and research institutions, and dealing with different teams every time. If you put in $50,000 to deal with one particular external research institution, another one, and then another one, right across the board there is no consistency in terms of rules.
Secondly, every college and university has its own external research department. Sometimes the external research department is bigger than the number of active researchers producing commercialization with the results. You have to deal with this middleman over here who does not understand technology in order to move forward to do the real work. This leads to an overhead of almost one-third of the money in many cases. You put in $100,000, but it's only $66,000 worth that you're starting to use. The other $33,000 goes purely on overhead.
To give you an example, there are three institutions in Ottawa, all doing research. The three have three different external research divisions, and all three have totally different rules and regulations. When I'm dealing with one particular university, the same thing cannot be transplanted. Their overhead is different from the college's overhead, which is different from the other university's overhead.
What am I suggesting here? I really feel the need, right across the board in Canada, that since intellectual property is important, some department or ministry of innovation should come up with a guideline that dictates 80% of what should be there, so that universities take care of the rest of the 20% for locally managing things. However, 80% seems to be the same thing that we are hashing over again and again. If you could help me with that, then it will be easier for me to concentrate on research rather than this mumbo-jumbo.
During the project execution, the IP ownership itself has to be defined properly. The university research tends to hold onto IP, unable to commercialize, leading to the executable IPs that no one uses, or they go into this mode of agreements after agreements for a particular research result or a patent. If you see the number of patents that are coming for the amount of money that is put in, I don't think it is really very large.
The money is in billions, and the patents are not even in thousands.
So I'll give you an example from my personal experience that would relate to you. I worked in BNR and then we became Nortel. I signed an agreement with BNR that the work I do in BNR goes to BNR. I created patents in BNR and Nortel. Those two patents went to Nortel. That went to Motorola or went to Google. God knows where it went. But Nortel had the complete control of using the patents. I can go and say this is my idea, I did it all, but even if you have the idea when you're taking a shower, it still belongs to Nortel.
Similarly, it's the same thing with Tropic when I worked there, which then became Alcatel-Lucent. I created patents, and they belong to the institution. My name is there in the patent and I'm very satisfied with it. Ultimately it was created. The government puts in money for research and the research is done by the university professors or researchers. They didn't put in the money from their pocket. Why shouldn't the results belong to the Canadian people? It is the government's money so the results belong to the Canadian people. Where is the IP agreement here? The IP is the Canadian people's agreement. Why is somebody else holding the particular results?
If an SME puts in the money, then partially that particular intellectual property is held by the SME and the SME should continue developing the product. But if there's an IP created purely based on the government money that IP should be given to the budding entrepreneurs and innovators in Canada, including the SMEs, to take it up, make more jobs, and create more wealth for the country. That is not being realized at all. Instead what we are doing is saying, “my professor did this or this is mine so I'm going to hold on to it” and there is a big department in the middle that comes and starts negotiating with you.
At the end of the day, SMEs just don't have the money, time, or resources to handle this. They say, to hell with it, I'm going to hire two guys and go and do it myself. This is what is happening. Ultimately what happens is there are non-executable patents in the universities that nobody uses but their list is long. They can make claims about it. Very few of them—and maybe you can even count them on your fingertips—are saying, on big data I did this one and in the smart grid I did that one. But for the billion and a half dollars' investment, do you think that even makes sense? I don't know. If I ran my company like that, I would get fired within the first month.
For example, if you're taking the Far East—I don't want to name the countries—every research institution always has a numbered company associated with it and those numbered companies—which kind of mimic NRC—go around, find those who are synergized and then they evangelize that particular patent, and it allows them to build companies based on that and ultimately the country grows. The Canada stagnation, as many of my colleagues put it, is not due to investment. It is because there is no streamlining of processes to make use of it.
I have just a final point, on after the project. After the project, there is really a lack of proper metrics for SME impact and the intellectual property impact within the country. We need to really measure the IP creation, which is the number of patents that are created in the country. It's a very clear number. If we can compare it with the rest of the world for the amount of money that you make, the total number of patents divided by the total amount of money that you've put in gives you your efficiency. It's not rocket science. If we go and check this one, we will see where we are in the world. Once you measure you can always improve, because you know where you are. That needs to be done.
A specific budget needs to be created, and not an addition. Even within what you have, you can segregate for patent creation. Any money that the government puts in for research to a research institution has to end with a patent and that patent belongs to the Canadian people. If an SME puts in money for that particular research along with the government, that patent belongs to the SME also and there should be no agreements of any sort, because we put the money in we have the right to use it.
Of course, the researchers can write their name on the patents. We can write their name on the patents. We can feel good about it, but ultimately who paid for that research? They own the patent. This is the common norm in the private industry. I don't know why it should not be the norm in the government industry.
Those are the three ideas I have.