Industry Committee on June 20th, 2017

[Ben Lobb, Conservative, Huron—Bruce, ON]

We had an individual who was here perhaps two meetings ago. He had worked at Nortel, and he said that if he came up with an idea, Nortel owned that idea. His name is on the patent, but Nortel owns it.

With universities, he said, it's basically government money going in. The professor or the researcher gets paid through tax dollars. All of a sudden, they come up with an idea and magically, somehow, they are now a part owner in IP. There seems to be something philosophically incorrect with that.

Those are not my words; those are his. Are there any thoughts on that? Is it an issue to get technology transferred out of the lab and into the commercial space?

[Dr. Ted Hewitt]

As I was saying in my earlier comments, first of all, there's a huge compulsion within the academic community to publish. That's part and parcel of the requirement for any research funding that goes on anywhere across the country, regardless of the discipline, to get that information out. That's available to anybody who wants to use it. It may not contain the kind of information one needs to commercialize, but that's the second issue.

What I was saying earlier was that it doesn't really matter who owns the IP. The university can own the IP, as is the case at McMaster University, or the investigator can own the IP, as at Waterloo or Western. What's really important is what the institution does to get that IP out of the university and what process is used.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Some of the testimony we've heard, though, is that it kind of does matter who owns it, or who's in control, because there are a lot of personalities you have to deal with in getting it out of a university. So is that a problem? We had two businesses at committee, and they both said the same thing.

[Dr. Ted Hewitt]

Let's put it this way. If the investigator ultimately develops the IP and is under an obligation to report it to the university, that's true whether the investigator owns the IP or the university owns the IP. If you don't want to report that, even though nominally the university owns it, it's not going anywhere. So, it doesn't really matter, in my view, who owns it. It's a question of creating the milieu so that people want to disclose, they do disclose, and the university provides the mechanism to allow them to run with it. In some universities, that works better than in others. I'm sure you heard, and Dr. Dixon told you, that at Waterloo there's a very liberal regime. They encourage individuals to work with companies. They put no restrictions on that ability to work with companies to patent or copyright, and to use that data. At other universities, it's not a priority.

It's getting them there that I think is the bigger issue.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move to Mr. Masse.

You have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, gentlemen, for being here today.

Mr. Hewitt, I think you mentioned that there are 1,000 patents—

[Dr. Ted Hewitt]

There are probably more.

[Brian Masse, NDP, Windsor West, ON]

Probably more. So do they become like the new residents of the island of misfit toys, in that they just kind of go there to linger and...?

[Dr. Ted Hewitt]

It's worse than that.

[Brian Masse, NDP, Windsor West, ON]

Please explain.

[Dr. Ted Hewitt]

Let's go right back to the notion of disclosures. I was the same: when I started out at Western back in 2002, I said we had to get our disclosure rate up. The fact is, you can do that. You can walk around, talk to everybody, get them to disclose, and put everything on the table. The problem is, they're going to disclose everything and anything they think might go somewhere.

Then the tech transfer folks have to decide what's worthy of protecting and what's not. There's a tendency to want to protect, as opposed to not to protect. Most universities carry inventories or stocks of patents that are probably too high. It's worse because you have to pay to maintain these patents.

When I first became VP of research at Western, we were spending on the order of hundreds of thousands of dollars every year to maintain patents that were going nowhere. That was part of our ongoing cost. How to get them out is one issue, and selecting the things that will move forward is another.

[Bert van den Berg]

I'd like to add the fact that patents are like publications. They are a marker of achievement. Here's some knowledge that I've realized. Researchers who collaborate with companies better understand the opportunities for innovations and therefore better align the research to the opportunity. The more we can do to encourage collaboration, the more likely we are to end up with innovations that are relevant.

I'm not so concerned with what's happened in the past. It's about how, going forward, we can make a greater impact with the money we're spending in terms of producing innovations.

[Brian Masse, NDP, Windsor West, ON]

It sounds to me as though we have a bit of a cultural problem here. I heard a little talk about how the patents and ideas are only worth what somebody will pay for them. It seems like a yard sale, where you bring stuff out and realize that it has a sense of value to you, and then soon afterwards that the sense of value to other people is quite different.

I kind of get that feeling. I've toured a lot of universities and colleges over the years. They seem to be environments in which it's almost as though they're waiting for the next greatest idea to come out. It scares off, maybe, some of the.... I've raised a number of times the cases of inadvertent innovations, discoveries that.... Some of those are the best the world has ever seen.

How do we incentivize that? You mentioned, Mr. Hewitt, cash for access, and I thought I saw some Liberals choke over there. But I get what you mean.

[Dr. Ted Hewitt]

Context is really important.

[Brian Masse, NDP, Windsor West, ON]

I get what you mean. Is there a way to incentivize...?

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

We started there.

[Brian Masse, NDP, Windsor West, ON]

Exactly, maybe the question goes to them.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Don't hold that against me.

[Brian Masse, NDP, Windsor West, ON]

Actually it was really good. It was really relevant. Maybe I'll ask both of you to comment.

Is there a way for us to kind of grease the wheels or loosen...? Is there something else that can be done to kind of shake it a bit looser? It seems this protective element we have is strong.

[Dr. Ted Hewitt]

Bert spoke to this very well, and the fact is that not everything needs to be conceived as product development technology transfer. Working together produces amazing results sometimes when there's no obvious IP. I've seen it more than once. I've seen a $25,000 project at a major oil sands company in Canada that was done at two universities result in—and this is from the president of the company—a 2% saving in operating costs. There was no IP; it was just a student project. Faculty were involved, but that was the end of it.

To your broader question—and this was a real eye-opener for me—I spent time in the States at an institute at the University of Texas where they focus specifically on IP, IP-related issues, and technology transfer. The one lesson I came away with was don't expect your researchers to become star entrepreneurs. It's not going to happen. They may not even be able to realize the potential of what they're working on.

What you need, in the environment of the university particularly, are people who can recognize the potential of what people are working on, and that's what our tech transfer folks typically do in universities. We need more of that activity, in combination with the kind of collaborative research we were just talking about, to start to shake things up.

We don't expect the entrepreneurs to be amazing inventors. Why would we expect the university professors to all of a sudden become entrepreneur magicians? We need to find ways to work together to extract that value, using the expertise as a component part of that.

[Bert van den Berg]

I'd just add one thing. About 20% of the collaborative projects that we fund result in tangible IP; probably 80% result in knowledge transfer; and 90% result in interactions that the company values enough to recommend to its peers.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

One thing I do want to touch on is that I recently toured St. Clair College in Windsor. They have a lot of good stuff happening there. One concern that was raised was about the ability for capital investment in machinery and equipment.

I want to use my time for you to speak, but the concern was with being able to keep up with the pace of industry to make sure that what they do is also relevant so that the training takes place and so that the transferable skills are there for their students to graduate. I think that's important to keeping work in Canada, and making sure it's relevant, but the costs....

[Bert van den Berg]

NSERC funds a program that provides support for equipment at colleges. The money we have for colleges is about the same as the amount we spend on university equipment in NSERC. The problem is it's a small budget and there's limited access. Selfishly, if we could grow that budget, then we could offer more equipment.

[Brian Masse, NDP, Windsor West, ON]

I hear nothing but good things; it's just the amount of availability. I hear nothing but good things about every aspect related to it.

[Dr. Ted Hewitt]

That's not to mention as well that CFI, the Canada Foundation for Innovation, does have a college infrastructure program. They should be talking to them for sure.