Science and Research Committee on March 23rd, 2023

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much for that.

The last member of Parliament to ask our witnesses questions for six minutes is MP Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

Thanks to the witnesses. It's been very interesting, primarily because like many Canadians, I assume, I know absolutely nothing about the patent process, other than what a patent basically is.

Mr. Georgaras, in your remarks at the start, you talked about foreign companies registering patents here and Canadian companies registering patents elsewhere. Can you give me a patent 101? If I were a company, what would I have to go through? Where do I register patents in order to be protected worldwide? What kind of foreign agreements are out there?

This is so I can get a basic lay of the land.

[Konstantinos Georgaras]

Thank you very much for the question.

As I mentioned, 70% of our applications come from abroad and most Canadians will file outside of Canada. For one example in terms of volumes, last year 12,000 Canadians filed in the U.S. for patents. In reverse, 16,000 Americans filed in Canada.

We have a number of mechanisms in place to help support that. From CIPO's perspective, we do provide information on how to enter markets and what to consider.

We are part of international treaties governed under the World Intellectual Property Organization and we are part of treaties for each of patents, trademarks and industrial designs. This allows someone who wishes to go into multiple markets to file just once through the World Intellectual Property Organization. They pay one fee in one currency and then determine which countries they wish to go in. It's a way of facilitating that movement to the global stage. I'm pleased to say that it was just in the last three years we joined the trademark and industrial design systems.

For all three of them, Canada is ranked quite highly in terms of volume. For the patent system, we are fifth. For the trademark and industrial design systems, we are sixth internationally. That demonstrates that people want to invest in Canada and also that Canadians wish to operate globally.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

If I were a foreign company, would I register in Canada solely?

I'm trying to grasp why a company would decide to register their patent in Canada rather than the United States, Germany or wherever. What drives that decision?

[Mark Schaan]

A company's intellectual property strategy rests on a number of things. It is shaped in part by their sector and their location, as well as their market.

For many companies, a primary consideration is that they want protections in the places in which they sell. They also want the recognition of their technology from an office of considerable repute that will potentially allow people to know that they have an idea, they have protected an idea, and that they have someone who has taken a credible look at it. That's not to disparage any of the IP offices around the world.

That's why many people file in the first instance in places like the United States and the European Union. They are large markets with very large patent offices for that capacity.

That said, Canada increasingly plays an important role not only as a country of second filing, but also as a market. That is why my colleague noted that the majority of applications coming into the Canadian intellectual property system are coming from abroad. It's because they're interested in the Canadian market.

It's also why we need to look very carefully when we make judgments about how well Canadian firms are doing because many of them are actually interested in those markets abroad and are potentially using other offices as the place in which they're filing.

Then it's about which rights you file for. For some companies, patents are going to be the be-all and end-all. It's the most important thing they can do. For others, they're relying on things like trade secrets, their copyright, their trademark or an industrial design.

All of those are specific to the business, which speaks to why IP advice and IP strategies are so critical for leading small and medium-size enterprises to think through thoughtfully. Those strategic choices about which markets, which rights and in what order are all very important, particularly when a company's at its early growth stage where it's not necessarily ripe with capital.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

How would some of those offices differ, say the Canadian office and the American office, in terms of how long it takes to get a patent, how much it costs and those issues that might drive a decision?

[Konstantinos Georgaras]

Thank you for the follow-up question.

Getting a patent and applying for it can be a rather complex process. There are a number of steps in play.

We ensure that we are internationally comparable so that when someone applies in Canada, they can expect similar turnaround times with other jurisdictions. We also ensure that our fees are comparable. In fact, in the larger jurisdictions such as the EU, the U.S., Japan and Korea, the fees are higher.

We do try to ensure there's a value proposition for Canadians who want to file in Canada, and that they can get their rights here quickly and at a comparably reasonable price.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you, Mr. Cannings. You came in with five seconds to spare. That's much appreciated.

Moving on to the five-minute round, we have Dan Mazier from the Conservatives for five minutes.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you, Chair, and thank you to the witnesses for coming out here today.

This is directed to the department, but we'll see where we go here.

Over the last five years, what percentage of intellectual property developed in Canada is owned in part or in whole by non-Canadian companies?

[Mark Schaan]

I don't think I could furnish a specific number, given the sheer volume of intellectual property that's generated and the variety of rights associated with intellectual property.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Do you track it?

[Mark Schaan]

We track patent filings. We track the number of trademark filings. It's harder to track copyright as much of that is not registered, and we track trade secrets.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

If you could table some of that data, that would be great.

[Mark Schaan]

You bet.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

How much did Canadian universities make from licensing or from the commercialization of intellectual property last year in comparison to research and innovation funding they received?

[Dr. Nipun Vats]

I don't have those numbers on hand.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

You do track it, though.

[Dr. Nipun Vats]

There's an organization of university technology transfer offices that captures those numbers, so we could certainly—

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

The department doesn't track the amount of commercialization. They get value for money. Don't they track that? It's another organization.

[Dr. Nipun Vats]

I would say that when we fund research, there are a number of different channels for actually assessing the value of that investment. One is commercial opportunities, which are actually managed at the institutional level. There's the training, which is a huge part of it. It's the knowhow of how you do a lot of these things, which plays out in terms of the employability of those who are trained doing research—

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

I guess what we're trying to get at is if there is any way of measuring the value for money.

If we, as a government or as the Canadian people, invest in this, how much are we getting back out of that intellectual property in commercialization.

[Dr. Nipun Vats]

There is data produced by the technology transfer offices that we could certainly provide to the committee.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

If you could provide that for the last five years, that would be really helpful.

[Dr. Nipun Vats]

I'll see what's available. We can certainly do that.

I was just making the point that the channels of the benefit to industry and the economy are not exclusively IP-related. A whole bunch of other things come into play.