Industry Committee on June 20th, 2017

[Dr. Jacqueline Walsh]

My understanding is that while they do some education, they will do some workshops. They will help put people together. Because the people are actually embedded in institutions and are actually employed by the institution, they have to follow their contract rules and their HR rules. Once the positions are put there, I understand that Springboard has very little control over what they do.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

I'm going to share my time with Mr. Jowhari.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

I have a quick question for Chris.

Chris, in your statements you made mention of focusing on some of the public policies and, specifically, you talked about helping scale up companies and how that will help us keep some of the commercialization here rather than going to the U.S.

Can you please expand on that one?

[Chris Plunkett]

Certainly. I think when you look at where research and development is done in the private sector and where the leading companies in Canada have been on the R and D front—the Nortels, the BlackBerries, and the really large companies that have come down—if we want to increase the number of patents that are being commercialized within Canada, the logical thing to do is to create more large companies that can do that.

It's really difficult to say we're going to create this one company, so our approach has been a funnel. The more start-ups you can have at the beginning of the funnel, the more you can bring to these high-growth and scaling companies and therefore, the more large companies you can have. If you could pick them right from the start—well, if I could pick them right from the start, I'd be incredibly rich and sitting on a beach somewhere, probably. That goes for everyone. It's very hard to do, so the more you can create, the better.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Maybe the government can help with that.

[Chris Plunkett]

The government provides a significant amount of funding, but much of it is tied to very specific niche areas. I think the review going on at ISED right now or on Innovate Canada will be an important exercise, because we found 70-some-odd programs, I believe, that help start-ups and scale-ups, but they really focus either on very early-stage start-ups with very small amounts of money or on very niche-specific areas such as the auto sector. There is a whole fund for auto tech, and a company doing auto could access it, but a more promising company in another field could not.

I think breaking down some of those silos and making some of that funding more accessible to the companies that are really growing and that have the best chance of becoming the next Shopify, BlackBerry, or Nortel is going to really increase results.

[Majid Jowhari, Liberal, Richmond Hill, ON]

So the policy of Innovate Canada and the new model that the government is implementing is something that is actually leading to helping the scale-up in the companies?

[Chris Plunkett]

I would say it depends on the outcome of Innovate Canada. We're certainly encouraged by the direction and the desires expressed, but, it's a reorganization of—

[Majid Jowhari, Liberal, Richmond Hill, ON]

How would you measure the success?

[Chris Plunkett]

I think you'd measure the success in the end by the number of large companies that are produced in Canada. At Communitech our reach or stretch goals for our board are to create fifteen $100-million companies in the Toronto-Waterloo corridor by the end of 2025. It's not going to be Communitech creating those, but we're going to help create them, and I think the government should have the same perspective, which is how to create these large scaling companies that will both employ Canadians and create equity value and IP in Canada.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay, thank you. That was great.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

As you can see, the bells are going off. I'd like to offer two minutes to the other side to finish. I just need unanimous consent. Are we okay with that?

[Some hon. members]

Agreed.

[The Chair, Liberal, Dan Ruimy]

Alex, you have two minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Mr. Chair.

Chris, thank you for the presentation.

It's interesting, because you covered two portions. Number one was protecting our patents, and the second part was protecting our patents in U.S. jurisdictions where it seems as though there's some unfavourable processes. I guess that would be the best way to describe it.

You identified that there are some opportunities coming up in NAFTA. I as an elected official believe that the government shouldn't be in the business of picking winners and losers but that we should be in the business of creating an environment in which business can actually be successful. It can't be successful if it can't protect its assets. How do we best approach that?

[Chris Plunkett]

I think the number one and the easiest thing to do is to increase education for earlier-stage companies across the country, whether in Atlantic Canada or elsewhere.

I think Communitech has been fortunate to have Jim Hinton, who has helped us do that with our companies, but I don't think many other areas have the same level.

I think that's the number one easiest thing to do. It costs money, because this type of advice isn't free.

The other piece is to recognize that the game is international, and that's where you start to get into some more difficult areas that I'm really not qualified to get into the details of, things such as patent collectives. One thing we found very intriguing is the idea of a patent defence fund so that there's a fund that helps Canadian companies defend their patents in the U.S. or other jurisdictions when they're taken to court. That might be less complicated than a patent collective but provide some of the same benefits and some of the negotiation points as well.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you.

[The Chair, Liberal, Dan Ruimy]

Mr. Masse, you have two minutes.

[Brian Masse, NDP, Windsor West, ON]

I have one question to both, and we'll start from the east coast. With regard to the defence fund for patents, I'm wondering whether or not there is a way, especially with the superclusters.... One of our best strategies might be to somehow create an embodiment of that or whatever that could be tapped into.

That might be a way of at least having a stick out there. We can't fight every battle, but would it be advantageous—for those trolling in ideas—that Canada actually have a response to some of the patent trolls?

Sorry, the votes are cutting our things short, but we'll start with you, and thank you.

[Dr. Jacqueline Walsh]

I think having a patent defence fund would be very useful as a deterrent perhaps. I think it would very challenging to decide who you would and wouldn't support and who you would defend and who you wouldn't. You'd have to figure out the merits of the case. I think the money would be better spent on education, teaching companies about IP management and building IP portfolios, and getting away from this idea that everything should be open source. Teach them how to be competitive in the global market so they can defend themselves with their patent portfolios.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[Chris Plunkett]

I would agree. I think a patent defence fund would be difficult. I think it's something worth looking into. The challenges and a deterrent would probably be one of the strongest pieces to it, but there would be a lot to work through. So I don't think it's an easy thing that can be done tomorrow, whereas I would agree that education probably is. In think the important part about the education is that it's really IP strategy, especially when you're talking about a software company that you represent. Often you don't want to put a patent; you don't want to go for IP, because you're then revealing your source code and you're revealing some of your competitive advantages, but at a certain point, you have to do it. I think you heard from Jeremy Auger from D2L that their entire strategy is defensive. They have patents strictly to prevent another lawsuit from coming at them. It's getting that expertise and that ability in Canada and having it available to earlier-stage companies so they don't make mistakes early on. That's really important.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Thank you, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Thank you, witnesses, for your patience. We'd love to spend more time with you but unfortunately we don't have it.

The meeting is adjourned.