An expert panel led by former BlackBerry executive Jim Balsillie is urging the Ontario government to develop a mandatory curriculum to teach entrepreneurs and researchers who receive provincial funding how to develop and license intellectual property, in a push to increase royalties from publicly funded research.
In its final report published Tuesday afternoon, the panel of IP and business experts also called on the province to develop a centralized online resource with patent information for the province’s universities, colleges, research hospitals and business accelerators that benefit from the millions in funding that governments spend on research and development each year.
Sources familiar with the process told The Logic that the government is expected to move quickly to implement the recommendations, with plans to include details of the IP curriculum in the 2020 provincial budget.
After five months of consultations with more than 250 stakeholders, an expert panel led by former BlackBerry executive Jim Balsillie is urging the Government of Ontario to create a mandatory curriculum to teach entrepreneurs and researchers who receive public funding how to develop and license intellectual property. The recommendations come amid a push to increase revenue from publicly funded research.
The recommendations come after the panel spent five months consulting with more than 250 stakeholders. Among its findings: less than half of the accelerators that purport to help companies commercialize have an explicit mandate related to generating intellectual property. “In the knowledge-based economy, you cannot commercialize an idea if you don’t own it,” the report reads.
“For all the money the public has invested, and for all the … smart, educated people in this province, we could and should do far, far better,” said Balsillie, former co-CEO of Research in Motion (now BlackBerry), in an interview with The Logic.
Licensing intellectual property—for example through patents, trademarks and copyright—helps companies ensure rivals can’t freely replicate their ideas, and can be a lucrative source of revenue. However, just two per cent of small- and mid-sized firms in Canada have any patents, according to a report by the Canadian Intellectual Property Office. Balsillie argues that, as the economy relies less on physical resources and more on ideas-based “intangible assets”—over 91 per cent of the S&P 500 Index’s value came from intangible assets in 2019, up from 17 per cent in 1975, according to the report—governments have a responsibility to help publicly funded entities license their IP.
In its 2019 budget, Ontario’s self-described business-friendly Progressive Conservative government announced plans to study the public use of research dollars in an effort to increase the commercial return on that investment. The Logic reported in April 2019 that Canada’s top universities and research institutes spent $5.7 billion on R&D in 2017 (the latest year for which the numbers are available), but generated less than $75 million from licensing their innovations. Ontario institutions alone spent about half of the total for R&D that year, and generated almost half of the total licensing income. Patent filings also decreased that year, with academic institutions filing 687 patents, down from 790 the year before and the fewest since 2008.
Those with whom the panel spoke consistently cited a lack of understanding among businesses in identifying opportunities to license intellectual property, challenges navigating the licensing process and limited resources to fund their IP endeavours.
“As a result of a lack of direct funding and resources for IP commercialization and protection, the knowledge created on Ontario campuses is often left on academic shelves or licensed and/or sold at a development stage that significantly limits the returns to Ontario’s economy,” reads the report, which notes that the majority of patents filed in Canada by teams with at least one Canadian inventor are assigned to foreign companies or to foreign subsidiaries in Canada.
“Intangible assets – such as IP and data – have a direct impact on wealth and power at both the company level and nationally,” says the report. “This is why companies are amassing ever larger IP portfolios.” Ottawa-based e-commerce firm Shopify, for example, which traditionally has not bothered licensing its innovations, is shifting its IP strategy. The Logic reported this week that the firm is ramping up its efforts with a half-dozen active patent applications and has made several recent hires tasked with focusing on patent development and filing.
The panel pointed to the lack of accountability around the use of public funds by public institutions—including universities, their affiliated accelerators and regional innovation centres (RICs), like MaRS Discovery District in Toronto and Communitech in Kitchener-Waterloo—as a barrier to licensing IP. Less than half the RICs have a mandate to generate IP licenses, and the panel found wild variation in the effectiveness of tech-transfer offices, which are responsible for universities’ commercialization of research.
Along with a mandatory IP curriculum, the panel recommended improving accountability for stakeholders that receive public funding. “The time is now opportune to develop and implement a standardized approach to board and management governance for all entities that receive public funds,” the report reads. “The Government of Ontario should appoint a Special Advisor to assist in the development and implementation of a standardized governance framework for all innovation and entrepreneurship support organizations receiving public funds that have the potential to generate IP for the benefit of Ontario’s economy.” The panel also suggested that the provincial government hold tech-transfer offices accountable for devising explicit IP mandates.
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The recommendations follow a push from the federal government to develop a national intellectual property strategy, a priority announced in the 2018 budget. In August 2019, the government launched a $30-million patent collective focused specifically on helping cleantech companies create and patent intellectual property, and scale and compete globally. Balsillie said the panel drew on the federal initiative in its own recommendations to create a provincial resource with information on IP strategy, legal advice and education.
Balsillie wouldn’t “presuppose” whether the government will implement the panel’s recommendations, but said he’s optimistic it will. “The government has expressed in our conversations and deliberations, and there’s a recognition that past approaches didn’t work,” he said. “This is an opportunity to do more with what’s being invested.”
“We are reviewing the report and considering next steps to create a Made – in – Ontario strategy for innovation and strengthened commercialization,” the government said in a statement from Minister of Colleges and Universities Ross Romano and Minister of Economic Development Victor Fedeli.
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