Science and Research Committee on March 23rd, 2023

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

Could I interrupt you right here, with all due respect?

The increase in applications has been a phenomenon for the last 10 years, at least. What is your office's ability to provide support to people putting these in? Do you hire more people? Do you have to use software? What are you doing to make sure you're keeping up with the demand?

Obviously, you can't keep going with the same method. What is it you're doing to meet the demand of the market? It is a fast-paced market. These people need answers and they need results.

[Konstantinos Georgaras]

Thank you for the question.

In terms of our response, the demand has been growing, as I mentioned. In particular, there was a surge in demand during the pandemic.

Two years ago, we launched a full recovery plan in terms of our trademarks, which looked at building capacity, changing some of our processes and using technology. I'm pleased to say that for the fiscal year that will end in a few days, we will have issued 67,000 first reports and 48,000 approvals. That is a 50% increase in production from the previous year.

I'm also pleased to say that since July we've had eight consecutive months of decrease in our inventory. Our actions are starting to take hold and starting to gain traction.

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

That's good to hear.

We're seeing a trend to cleaning up some of the outstanding applications in question.

At the education level or just between the time where the research is commencing and there's a great idea or a business case in some of the research, oftentimes the individual has no business experience, possibly. They have no legal experience, possibly.

What are the roles between the patent office, the legal system and the government, which has possibly invested millions of dollars in this idea? How does that come together to protect everyone's investment, including the person who came up with the idea? How does that happen?

[Mark Schaan]

I'm happy to start, and again, I'll turn to my colleague for the specific role that CPO plays.

One of the goals of the national intellectual property strategy was actually to increase the overall level of awareness and education across the entirety of the innovation ecosystem. As you know, it actually takes all of the players to be working in concert with a relative level of IP savviness to be able to get to good protections.

The things that I would specifically point to, and some of the improvements that we've made, are things like our investments in IP legal clinics. IP legal clinics are run by law schools across the country and that's now being expanded to business schools, which can apply for support to be able to ensure that small and medium-sized enterprises can actually access pro bono advice on how they can potentially think about the protections related to their idea.

I would also point to things like ExploreIP, which is that database I talked about that has all of that IP we funded through federal funding that's sitting at universities. It has it in one spot to allow for that kind of business development capacity to be able to assist that transfer.

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

I probably have three or four minutes left, right?

[The Vice-Chair, Conservative, Corey Tochor]

You're 10 seconds over, Mr. Lobb.

Moving on to the next member, we have MP Lauzon for six minutes.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Thank you, Mr. Chair.

I thank the witnesses for being here today.

Mr. Schaan, you talked a lot about investment and the fact that intellectual property has increased a great deal and is still increasing.

What is behind that increase in growth?

[Mark Schaan]

You are talking about the growth of—

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

I'm talking about the growth of intellectual property enforcement.

[Mark Schaan]

That's a global economic phenomenon, stemming from changes in every industry and area of the economy. Technology has enabled every sector to reap the benefits of intangibles.

It's really the shift from tangible industries where the fundamentals of intellectual property potentially looked very different in a world in which you made physical things that weren't necessarily assisted by technology towards an increasing amount of the economy that's driven by data, software and services, and is even driven by the embedded nature of that data and technology even in physical industries.

Take the automotive industry, for example. A car used to be simply made up of parts. Now it's more like a computer with tires.

In some ways when we think about that fundamental incorporation of technology into all products, it's not surprising that we've seen this rapid growth in the desire to protect that and to rest that in both industrial designs and patents, and even in trademark and copyright in some ways, because brands and reputation actually also now are a huge part of that intangible value in the economy. When we look at that rapid growth it's really explained by what we're seeing in the global economy.

The goal for Canada is to ensure that we actually can seek success in a world where we've actually shifted from some of those places where we potentially used to have an advantage on our people and some of our fundamental abilities to make things to ensuring that we can do that in a way that still seeks success.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

That's very interesting and makes me think of several ancillary questions I could ask you.

Our government made a commitment in 2015 to invest heavily in the Internet and communications. We've done a lot of work on that. I represent a rural riding in Canada and I can tell you that, for small and medium-sized businesses in rural areas, this is important.

Has supporting small businesses and giving them access to the Internet also increased their ability to take advantage of this phenomenon?

[Mark Schaan]

For small and medium-sized businesses, that is absolutely the case. There are also other things that are perhaps more interesting to mention. For example, during the pandemic, there was growth in the online market, including on the small and medium business side.

When we looked at the number of small and medium-sized enterprises that had no digital channel to access their customers at the beginning of the pandemic and the rapid growth that we saw of that capacity, we now also see that many of those same organizations are butting up against the world of intellectual property. That's not just because they are on the Internet and they are dealing with those digital zones, but now suddenly their brand, their copyright, their trademark is something that potentially is now known to a much greater community than just the potential local community that they are dealing with.

This reality requires small and medium-sized businesses to use technologies, a high-speed Internet network and intellectual property to take advantage of the benefits and opportunities provided by the digital and global marketplace.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Mr. Georgaras, you say that very small businesses, with one to four people, use intellectual property. Those businesses are often located in rural areas. However, for years, the rights to that intellectual property were the preserve of corporations.

Since communications have improved, have you seen a difference in access to intellectual property for these very small businesses?

[Konstantinos Georgaras]

Thank you very much for the question.

As my colleague mentioned, there was a very significant change during the pandemic, which also had the effect of helping SMEs.

There was a very significant shift as more and more companies were operating on virtual platforms. It almost democratized, if you will, some of these platforms.

What was particularly interesting, linking back to your earlier question, is the platforms themselves were starting to demand that people prove they owned the IP that was being traded on the platforms. For small and large companies that led to more and more people coming to us, to CIPO, asking to get their rights and prove that they own it.

It was a very interesting move to the virtual economy.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

I think my time is up.

[The Vice-Chair, Conservative, Corey Tochor]

Yes, you are.

Thank you very much for that round of questioning.

We now move to MP Simard for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I am glad to see you today, Mr. Schaan and Mr. Vats, as you may be able to answer one of my questions. We have heard from previous witnesses about the importance of knowledge transfer in the real economy. To do that, Quebec has a rather interesting model—the college centres for technology transfer, CCTTs.

You know that the federal government funds CCTTs that have a technology access centre designation, a TAC designation. In Quebec, many CCTTs are funded by the federal government, to the tune of $100,000 right now, unless I'm mistaken. The program is being revised to fund fewer CCTTs, but provide more money to those who will receive the funding.

That is causing a lot of concern among CCTTs. Do you have a quick update on that situation? How will the financial support for CCTTs work?

[Dr. Nipun Vats, Assistant Deputy Minister, Science and Research Sector, Department of Industry]

The reason we are trying to increase the amount of money given to CCTTs in Quebec that are also TACs, or technology access centres, is that, when we started funding these kinds of organizations, the Quebec government was providing even more money. Now we want to make sure that all TACs across the country receive the same funding from the federal government.

That's why we're trying to increase the funding for CCTTs in Quebec. I know there is a concern, as the amount of money given to TACs is fixed.

[Mario Simard, Bloc, Jonquière, QC]

You know that, in Quebec, in the operating model of college centres for technology transfer, there are a lot of ongoing expenses that are not covered by CEGEPs. So that's a disadvantage for CCTTs, since in the rest of Canada, those expenses, such as building expenses, are covered by educational institutions.

This specificity of the Quebec model must be taken into account. If we try to equalize funding, I think CCTTs in Quebec will lose out, which I hope you are aware of.

[Dr. Nipun Vats]

I know that systems are a little different in each of the provinces. In some of them, the responsibility for the infrastructure is shared between the two. In others, the technology access centre or the CCTT is responsible for providing the infrastructure. The principle is that the federal funding is the same. However, I understand that there are differences from province to province.

We have also heard the concern that this will decrease the number of technology access centres across the country. I know the government is aware of that. I don't have an update on the situation as such, but we've had a lot of conversations with industry and we're trying to find a way to address that.

[Mario Simard, Bloc, Jonquière, QC]

Thank you very much.

Working on an issue as important as the innovation sector cannot be done without a strategic plan. I often hear the minister talk about the importance of the battery industry and I completely understand.

I would like to know if you have identified some areas that may benefit from better funding sources than others. Does your strategic plan target specific areas of activity?

[Mark Schaan]

Thank you for the question, which I will answer based on two aspects.

First, there is a global aspect, which consists of industrial strategies that affect the three most important considerations for all government investments: digital transition, a more resilient economy in response to geopolitical changes and global changes in the value chain.

In addition, these global goals include other equally important aspects, including the government's strategies, targeted investments such as those in the automotive sector value chain, the quantum strategy, the artificial intelligence strategy, and investments in global innovation clusters, which also include the government's other priorities in aspects or sectors that represent a lot of benefits.

[Mario Simard, Bloc, Jonquière, QC]

Would you be able to provide the committee with an organizational chart that would show all of the sectors that are targeted?

[Mark Schaan]

I will consult my colleagues and then I could provide the committee with some comments on our strategy.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.