Public Accounts Committee on Nov. 16th, 2009

[Pierre Coulombe]

I will follow on what Paul just mentioned. From our point of view and in terms of our activities at NRC, if you want to increase innovation, I would say we need to have a constant dialogue with industry in order to know the needs of the industry and how R and D can support those needs and bring new technologies into the marketplace.

For us it means doing research and development programs that are relevant, compared to what you just described. We're not going to ask researchers what they are inventing today. We would rather go the other way around: understanding the needs of the industry, trying to define whether our science and technology can contribute to solving those needs, and building up research programs to address the specific needs of the industry. Obviously the best way to quickly transfer technology to the industries so that they will improve their productivity and build up new markets is to work hand in hand with those industries.

This is something we at NRC do as well. NRC's language to describe some of our activities includes building up pretty competitive research programs whereby, through working with one industry or a series of industries, we will identify common problems, take the responsibility of developing solutions to those problems, and through being paid jointly by the industry, transfer that technology or those technologies to people who can very quickly exploit them in the marketplace.

That would be a way whereby we could facilitate innovation: by facilitating the transfer of technologies.

[The Chair, Liberal, Shawn Murphy]

Sorry, I'm going to have to move on. Mr. Young has a five-minute slot. He may want to come back to that. I know it was a very interesting and informative discussion, but I do have to move to Mr. Lee here.

You're sharing, Mr. Lee? Five minutes, and then Mr. Young.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Yes, indeed, thank you.

I sense a dichotomy here. I'd like you to help me resolve it. I may be in error, but on the one hand, we have the NRC, whose bread and butter is to invent and identify and licence and do that research. On the other hand, the general government policy is that when IP is created, we leave it out there for the general benefit of Canadians and we don't want to capture it. We don't want to manage it. We don't want to licence it.

So has NRC been identified as an exception to the general policy or have I misunderstood the general policy? Or have I not expressed myself well?

[Sheila Fraser]

Chair, can I respond?

I think the difference is when we talk about the private sector retaining ownership, and that is on contracted activities, when government contracts with the private sector. When government itself, through its own employees, develops IP, then it will license it as at the National Research Council. So there are two distinct ways.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

But what about when we ship out $50 million to NSERC, that type of thing? What happens to all those IP items that are generated there? Is that the same as the NRC rubric or is that like dealing with government employees?

[Sheila Fraser]

I really can't answer that, because it's not something--

[Paul Boothe]

With NSERC, money goes to university researchers, and individual universities have IP policies and they have offices that manage IP. And there's a range. So for example, at the University of Waterloo, the IP results rest with the researcher. At other universities, for example, the benefits from IP are shared between the researcher and the university, if they're licensed.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

What about the $10 million that came from the taxpayer?

[Paul Boothe]

What about the $10 million that came from the taxpayer? What we do is send this out, and the benefit that we get is the fundamental research. The benefit that the taxpayer gets is the fundamental knowledge that's created and is disseminated through academic journals and taught to students. That's the benefit we get.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you.

We're going to share our time, so I'm going to get three questions out and then I'm going to ask you to respond, because I know I'm going to run out of time.

If you look on page 24, there's a chart on the number of invention disclosures and the expenditures from 2003 to 2006.

So to Fisheries, Ms. Dansereau, you've only got one invention, yet an expenditure of $274 million in R and D spending. I don't know what the value of that one invention is, but your expenditure is greater than that of Health Canada, National Defence, and the Canada Space Agency, which have a greater number of inventions. The best return, of course, is at National Defence, with 18 inventions for only $229 million in expenditures. Would you comment on that.

Then, quickly, to Treasury Board or NRC, has a public servant ever made an invention and failed to disclose the invention or a patent? Has that ever happened, and what would be the penalties for something like that? Termination, I would suppose.

Finally, have there ever been any legal liabilities resulting from the improper management of the IP inventory? For instance, earlier in the chapter we mention that possible negative outcomes could be termination of contracts, contractors developing competitive products, inability to license IP to other departments, and inability to guarantee title.

I got three out.

[The Chair, Liberal, Shawn Murphy]

Give relatively brief answers, please.

[Claire Dansereau]

I'll be very brief.

We are a science-based department. The bulk of our work is not designed for creating or inventing new products really; it's about gathering information to allow us to make decisions. So that's where the bulk of our science investments go. The year 2003 was not a period when we were doing a lot of management, so we have much better data now for our inventions and our licensing, but we can get you that information.

[The Chair, Liberal, Shawn Murphy]

Is there anyone else?

Mr. Young, you have five minutes.

[Terence Young, Conservative, Oakville, ON]

Thank you, Mr. Chair.

My first question is for Mr. Boothe.

I understand that back in 2000, to increase the potential for commercial exploitation of intellectual property, we decided to let companies that did procurement business with the government keep their intellectual property, within those limitations. That was to create economic activity, I guess, and it recognized that they were the ones who could benefit from it, because they were the ones who'd go out and market it.

I wonder, as Mr. Christopherson did, why don't you make licensing deals with those companies? If they come to consult and do a contract with you for a year, they are on retainer. If they come up with, say, a great software program that benefits your organization and they want to go out and sell it, why don't you just cut a deal and make a licensing agreement?

[Paul Boothe]

I guess the important thing to say here is that in cases where we think there is a high likelihood that some valuable intellectual property will be produced, we will do that. I think the thing people need to understand is that in the case of this procurement, the vast number of these contracts never produce IP, and that's not what they're about.

[Terence Young, Conservative, Oakville, ON]

I understand that, and Madame Fraser is doing her job in making sure there's process in the system and it's all tracked, etc.

Madame Meredith, what kinds of rewards might an employee get? What would they get if they came up with some kind of invention that assisted their department or wherever? In practical terms, what is it, a cash award or a small bonus?

[Daphne Meredith]

The policy sets out cash awards.

[Terence Young, Conservative, Oakville, ON]

How much?

[Daphne Meredith]

It depends.

I'll refer to the policy here. We have awards for government use of inventions, and there could be an award of up to $5,000 for that.

[Terence Young, Conservative, Oakville, ON]

So it's a one-time award. It's like a big thank-you. Nobody is getting rich or anything, right? It's recognition.

[Daphne Meredith]

Yes. It's recognition more than anything else.

[Terence Young, Conservative, Oakville, ON]

Thank you.

Mr. Coulombe, what is the cost of administering a patent? You said that sometimes you will drop a patent when you realize that it doesn't have commercial value.

[Pierre Coulombe]

A patent, broadly speaking, is expensive to manage. A patent could cost about $150,000, not per year but over the lifetime of the patent. It could be $10,000, $15,000, or $20,000. It depends on where you have the patent, in which countries, and in how many countries you maintain a patent.

[Terence Young, Conservative, Oakville, ON]

So you have to pay fees in other countries.

[Pierre Coulombe]

Yes, you have to pay fees and translate them.