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Mark D. Penner on Canada’s New IP Strategy

May 31 2018 | 1:05 pm |

Introduction:

Mark D. Penner is an intellectual property (“IP”) lawyer with Fasken. He works in the firm’s Intellectual Property practice group. Mark’s practice focuses on all aspects of the acquisition, protection, enforcement, and strategic use of a wide range of intellectual property assets in Canada and around the world.

He acts on behalf of a range of clients, from individual inventors, start-ups and other early stage companies to large multinational companies, and is actively involved in counselling clients and providing strategic advice in a variety of technology areas, including biotechnology, chemistry, energy (mining, oil and gas), social media, insurance, communications and digital marketing.

A sought-after commentator on IP matters and recipient of numerous awards, Mark speaks and writes extensively on all aspects of intellectual property rights, particularly the commercialization of IP rights for start-ups as well as commercial matters for companies with respect to IP rights in national, cross-border and multinational commercial transactions.

“When creation is your business model, you need to protect it. Securing effective IP protection is the best way to do that!”
Mark D. Penner
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On World IP Day (April 26), the federal government announced a new Intellectual Property Strategy. The stated objective is to help Canadian entrepreneurs better understand and protect their intellectual property. Is Canada falling behind other countries in this area and how can the new policy achieve its stated objectives?

Over the last few years, some of Canada's trading partners, particularly the United States, have raised concerns about how intellectual property has been protected and enforced in Canada. Upcoming changes to Canadian IP laws attempt to address some of these concerns. The Canadian government’s proposed IP strategy is designed to complement many of these changes. A further component of the proposed IP strategy is to raise additional awareness about IP among Canadians. Therefore, the government's proposed strategy hopes to help Canadian companies do more to commercialize their IP, a critical asset in our knowledge economy.
Canada's IP Strategy focuses on developing three key strategic pillars:

a) IP awareness, education and advice;
b) IP tools for encouraging growth; and
c) Updates to Canadian IP legislation

With regard to the first pillar (awareness), the government proposed, among other things, to develop teams of Canadian government IP advisors to help businesses improve their IP knowledge. These so-called IP "SWAT teams" will be able to help SMEs develop and retain control of their intellectual property. As part of the second pillar (growth), the federal government has proposed the development of a number of "IP tools". This includes the creation of a pilot "Patent Collective" and development of a centralized IP-specific portal. The latter two can help businesses, entrepreneurs, and innovators identify existing IP that is held by government and academic institutions. This could give businesses and entrepreneurs access to groundbreaking research for licensing and commercialization.

As for the third pillar (legislative), Canada plans to propose further amendments to key IP laws that will clarify acceptable practices and prevent misuses of IP rights. This includes:

a) amending the Canadian Patent Act to affirm that there is no infringement when conducting experiments that relate to the subject matter of a patent;

b) taking action against "patent trolls" through establishing minimum requirements for patent demand letters to reduce costs to assess the merits of the allegations as well as new regulations to ensure a balance between asserting IP rights and discouraging bad behavior; and

c) preventing "trademark squatting" by introducing bad faith trademark opposition and invalidation grounds as well as trademark "use" requirements to enforce a trademark registration within the first three years.

As someone who has been helping companies protect IP for many years, do you think the new strategy has the right elements to succeed? Was there anything you wanted to be incorporated in it?

Many of the changes have been well received by members of the Canadian business community. As an IP practitioner, any further assistance that the Canadian government can provide for helping businesses protect their IP is welcome. Having said that, the “devil is in the details”. It will be interesting to see how the broad strokes of the strategy will be implemented. Specific measures dealing with how revenue from IP is dealt with would be helpful. An example of this would be the “patent box” regime (e.g. tax regime for intellectual property revenue) that other jurisdictions have proposed or enacted.

At RDP, we work with many start-ups and SMEs that develop new products. From our perspective, we rarely see these companies implement an IP strategy or take steps to protect their IP. Do you think these firms are taking big risks? Can IP protection be quantified as a valuable asset that is overlooked by these companies?

An IP strategy is an excellent idea for any company. For start-up companies, an IP strategy is essential. For many startups, IP tends to be the most valuable asset, and possibly the only one. As such, it is imperative that early stage companies have a handle on how IP is created, protected and enforced. A number of issues, particularly IP ownership, need to be effectively addressed early on as it can be more time-consuming and costly to correct mistakes in later stages. It is also important to educate startups as to what IP risks may arise and how they can mitigate those risks effectively.

Five new superclusters were recently announced in Canada with collaborative projects being the cornerstone of their modus operandi. IP will be shared among participants that are funded. How do you think the new federal IP strategy can offer protection to participating businesses in superclusters while commercially benefiting from collaboration?

The Canadian IP strategy is really about driving Canadian innovation. As these superclusters are part of the Canadian innovation landscape, they should benefit along with the participating businesses. A key for these superclusters will be the development and implementation of their respective IP strategies and how the IP will be shared with other entities. While the strategy is not aimed at these superclusters per se, it should help guide businesses and superclusters in working together to drive Canadian innovation through commercializing the resulting IP.

Protecting IP can be a costly exercise, especially for start-ups and SMEs with limited resources. What advice would you give to these companies to protect their IP efficiently? Are there less expensive measures that a company can take to achieve maximum value?

While obtaining patent protection can be expensive, there are other ways to protect IP cost- effectively. As copyright arises automatically upon creation of the work, no registration is required. However, registration does provide for additional protection and can be done online at the Canadian Intellectual Property Office at a low cost. Maintaining confidentiality through effective non-disclosure agreements is a cost-effective manner of maintaining trade secrets. Another example is simply identifying trademarks with a TM to indicate to everyone that these are company trademarks; while you cannot use the ® unless the mark is registered, using TM is permitted even when the mark is not registered.

Does the new federal IP strategy impact the length of time it takes to get a patent approved? Does it matter if the IP was developed by a manufacturing or a software company?

Unfortunately, the new Canadian IP strategy will not impact the patent approval process, regardless of who developed the IP, a manufacturing or software company. Not so long ago, Canada took steps to decrease the amount of time for patent applications to be examined, but the IP strategy does not explicitly address this. There are, however, a number of mechanisms by which businesses can expedite patent examination and patent issuance.

This interview was conducted by Brian Cookson, President and Managing Director at RDP Associates.

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