Good morning, ladies and gentlemen. Bonjour à tous
. Welcome to the 31st meeting of the Standing Committee on Industry, Science and Technology.
The first thing I would like you to note is that this morning both clocks are inaccurate, in that they are not following our BlackBerry time. So as usual, as I mentioned to members, we will revert to BlackBerry time, because that's generally synchronized with the House of Commons time. So right now it's 8:45 a.m., according to my BlackBerry.
In front of us we have multiple witnesses: from the Canadian Intellectual Property Council, Graham Henderson, co-chair; from the Intellectual Property Institute of Canada, Mark Eisen, president, and Michel Gérin, executive director; and as individuals we have Jeremy de Beer, associate professor, faculty of law, University of Ottawa, and also Ruth Corbin, managing partner and chief executive officer, CorbinPartners Inc.
I will start at the beginning. Ms. Corbin, you had requested a specific order, so I'll just give you the order right now. It will be Mr. Henderson, Mr. Eisen....
I take it, Mr. Eisen, you're going to be doing the presentation. Is that correct?
Good morning, Mr. Chairman, honourable members of the committee. Thank you for the opportunity to appear before you. My name is Graham Henderson and I'm the co-chair of the Canadian Intellectual Property Council. I'm also the president of Music Canada, and I remain very involved with both the Canadian and international chambers of commerce and their IP committees.
The Canadian Intellectual Property Council was established in 2008 as a coalition under the banner of the Canadian Chamber of Commerce. The organization quickly became an influential advocate for the promotion of intellectual property and innovation in Canada.
The importance of intellectual property rights has long been acknowledged. Intellectual property encourages innovation that facilitates the development of products and services that enrich our lives, drive economic growth and competitiveness, and most importantly, maybe, create jobs. A strong IP rights system promotes economic prosperity and will protect the health and safety of Canadians.
Five years ago this very committee undertook an extensive study of IP in Canada, with the CIPC appearing as a witness. Around the same time, the Canadian Anti-Counterfeiting Network published their Report on Counterfeiting and Piracy in Canada: A Road Map for Change, of which I have copies here in English and French. It was endorsed by many business associations in Canada.
The road map identified many of the current weaknesses in Canada's IP laws and enforcement system, including a lack of police and prosecutorial resources that are dedicated to counterfeiting; insufficient criminal penalties; a lack of effective civil remedies; and a disempowered customs officialdom.
This report was provided to key federal cabinet ministers, parliamentarians, and policy-makers in Ottawa, and was received positively. Within months of its publication, this industry committee convened hearings and produced a report declaring urgent action.
IP rights, the committee reported, “facilitate and encourage the pursuit of innovation...and the disclosure of knowledge into the public domain for the common good”. It said, “The IP right is the only industrial tool that rewards the innovator commensurate with the innovation's commercial prospects.” It then said, “The Committee is of the opinion that a stronger legislative framework and adequate financial and human resources are important for the fight against counterfeiting and piracy in Canada.”
I might add that the NDP issued a supplementary opinion that actually strengthened some of the committee's recommendations. I believe we have the current vice-chair, Mr. Masse, to thank for that.
In response to the committee's report, which was endorsed by all parties, four government ministers signed a letter on October 2007 pledging action and stating unequivocal support for a strong IP regime. The letter read:
||...this government is committed to the importance of providing a robust framework for intellectual property rights, not only to address the risks posed by counterfeit goods to consumer health and safety but to foster an environment conducive to innovation, in an effort to further attract investment and high paying jobs to this country's growing knowledge-based economy.
Other reports have since received positive feedback from the government, parliamentary committees, and policy-makers, including the 2009 CIPC report entitled A Time for Change: Toward a New Era for Intellectual Property Rights in Canada. This growing awareness of the need for reform of Canada's IP regime has been acknowledged by virtually all levels of government in Canada, together with individual creators, inventors, and business leaders.
However, despite this widespread acceptance and despite a commitment to implement this very committee's recommendations, the wheels of change have ground slowly. Of the industry committee's 19 recommendations, I believe only two or three are close to fruition. This is why the renewed commitment of the government to revisit this issue, as evidenced by these hearings, is so refreshing and welcome.
Having said that, many of us have what can only be described as a disconcerting sense of déjà vu. The simplest place for me to begin, I guess, would be to urge the committee to pay close attention to the unanimous eighth report of this committee in 2007, together with the government's response, and to rededicate itself to the realization of that committee's recommendations. These recommendations are, of course, not the end of the line. The 2007 industry committee was mostly focused on establishing the critical role that IP plays in innovation, as can be seen from the quote I read earlier, and establishing rules to better protect IP in the marketplace.
Other studies have focused on the critical role that IP plays in a nation's prosperity and innovative capacity. For example, the Coalition for Action on Innovation in Canada produced a widely praised report entitled An Action Plan For Prosperity. This coalition included a who's who from Canada's most innovative businesses. It was co-chaired by the Honourable John Manley and Paul Lucas.
The third recommendation they put forward in this report was to “adopt the world’s strongest intellectual property regime”. Here's what they said:
|| A robust climate for innovation is only possible if Canada’s regulatory processes encourage the development and launch of innovative products and if our laws ensure that inventors and those who invest in their ideas can fairly reap the rewards of their work. Canada should aim for a reputation as the best place in the world in which to research, develop and bring to market new products and processes. To achieve that goal, it is imperative that Canada seize current opportunities to improve its protection of intellectual property and thereby create a more attractive environment for investment in innovation.
Now, if I were to add to the 2007 recommendations, I might suggest the following. First, establish an intellectual property rights coordination council consisting of senior government officials, representatives from the business community, and IP rights holders. I would ask for the extension of data protection and for the implementation of a five-year patent restoration system. I would ask that we streamline the patent review system so that we can get products to market more quickly. And I would ask that we create judicial awareness of the importance of IP.
Actually, Mr. Chairman, I'll go first.
Good morning. My name is Michel Gérin, and I am the Executive Director of the Intellectual Property Institute of Canada. Thank you for having us today and for taking on this important study.
IPIC is the professional association of patent agents, trademark agents, and IP lawyers. Our members help Canadians obtain and protect IP rights in Canada and around the world, and they help foreign companies obtain IP rights in Canada. Our members therefore have a unique perspective on the strengths and weaknesses of the Canadian IP regime and how it compares with the regimes in other jurisdictions.
Today we want to use that knowledge to provide you with an overall list of issues affecting the IP system, and propose a framework by which the committee may wish to organize and address these issues as well as the other issues that will come up in the course of your study.
Page 3 of our presentation document contains the mandate of the committee. I will briefly address the question of innovation in the intellectual property regime, and then we'll move on to the effectiveness of the regime.
There are many definitions of “innovation”, and on page 4 we propose a simple one for the purpose of today's discussion: an idea is created, it's protected by intellectual property, and then it's commercialized.
You will notice at the bottom of that page that we have suggested some names of people and organizations that the committee may wish to speak to in the course of its study. Of course this list is by no means complete. We've proposed some throughout the document.
There are eight components to the IP regime in Canada. Today we'll focus on three: patents, trademarks, and industrial designs. These are listed on page 5. We explain to you in the following pages of the document the reasons why we have set aside the other five elements. We also provide information in case the committee wishes to investigate those further.
There are many ways of looking at the IP regime. We propose a framework that is certainly not scientific but is very much practical. On page 9 we talk about “The ABC of an effective IP regime: access, balance, control.” We've applied this ABC to our three areas of focus—patents, trademarks, and industrial designs—to identify the issues that are affecting the system. As you'll see later in the document, we've classified these issues on two scales: the level of controversy surrounding the issue and the effort required by the government to either analyze and/or implement solutions to those issues.
I'll now turn it over to Mark, who will explain further this ABC and give examples of the issues we've identified.
I'm speaking from the perspective of an intellectual property practitioner. I am a lawyer certified as a specialist by the Law Society of Upper Canada. I was registered as a patent agent and a trademark agent in both the Canadian Intellectual Property Office and the U.S. Patent and Trademark Office back in the 1980s, and I have been practising in the preparation, filing, processing, and examination of applications, which turn into the rights that we're discussing here today, for more than 25 years.
Page 10 of the presentation we've provided deals with the issue of awarenes. There are three issues here that are required for a proper intellectual property regime: awareness of the regime; trust in the system, both by Canadians and by those abroad; and accessibility, including financial accessibility of the system.
On awareness, I believe you heard last week that there is a very low awareness about intellectual property among SMEs in Canada. We need to engage the public and educate them on IP. The Intellectual Property Institute of Canada cooperates with the Canadian Intellectual Property Office, CIPO, in having a bank of speakers who actually do a road show, taking education across Canada, but they hit only small groups at a time.
There has to be a concerted effort to actually educate the public on the uses and benefits of intellectual property and to dispel many of the misconceptions that are out there. IPIC does its part by doing various outreach activities. For example, we recently met with members of provincial governments on the Atlantic coast. However, CIPO needs to have the budget to be able to do this as well. There is a marketing issue here. If people aren't aware of the system, they will not be using it.
Trust—meaning predictability and reliability—is a very important part of this. There are problems, for example, with inadvertent abandonment whereby rights can be irretrievably lost due to causes that can be completely beyond the control of an applicant, or through normal human error of an applicant, and the Canadian system is very unforgiving that way. This is not the fault of the Canadian Intellectual Property Office, but the legislation and regulations under which it works do not provide forgiveness for this type of problem.
I think the United States has a very good model for this. That's one of the things they do quite well. They're very forgiving in terms of inadvertent abandonment. They provide many opportunities to catch up, correct one's rights, and avoid this irretrievable loss of rights.
There are other problems with sound prediction and official marks, which we mentioned in our presentation. I can't go into those in detail, but they result in reduced reliability of the system, because people do not know what to expect, first of all, from CIPO when applications are examined, and second, from the courts when these rights eventually make it into court.
Accessibility includes financial accessibility. We have a scientific research and experimental development program that covers costs up to the point of determining that an invention is patentable, but not past that. So an applicant—that is, an SME—has to pay for this themselves, and very often they'll say no. They'll say either “No, I don't want to spend the money now”, or “Why should I bother getting a patent when it's so expensive to sue?” These types of problems have to be addressed.
We have a small entity system in place, allowing reduced government fees for companies with fewer than 50 employees, universities, and individuals, but it doesn't work. There was a case that came down some years ago that invalidated a patent because somebody accidently claimed to be a small entity when they weren't entitled to, and practitioners are afraid to use it nowadays. It's very important, actually, that practitioners appreciate the reliability and predictability as well, because we're the interface between the users of the system and the Canadian Intellectual Property Office, and we provide an important legal service in that respect.
High-quality patent and trademark examiners and high-quality patent and trademark agents are very important to making the system run efficiently. We can be spinning wheels when the patent profession or the trademark profession and the Intellectual Property Office don't have the same view of how these things should work.
Slide 11 shows how there needs to be a balance between the incentive to innovate and competition. This is the “B” portion of our ABC. There are distinctive trademarks being refused because they're descriptive when sounded. Again, this is referred to in our presentation.
There is an ongoing struggle between IT industries and the patent office on the scope of patentability of business methods, and this is yet to be resolved and needs to be resolved.
Page 12 refers to an efficient enforcement mechanism, which is also required.
Thank you. Good morning.
My name is Ruth Corbin. I run an intellectual property research firm. I teach at Osgoode Hall Law School, in intellectual property. I'm a corporate director—you will see some of my remarks reflecting that background—and trained as a marketer. One of the reasons I raise that is because of the title of the presentation called “What's needed most is an IP State of Mind”. That's what I hope to leave you with today.
Remember when customer service was just something people spoke about? It took a whole reorientation of government and business until we understood what it meant to have excellent customer service and satisfied customers. It didn't happen just because we said it. That's what I'm proposing is needed, a reorientation of thinking, which I think individuals in the room can provide leadership for, and that is an IP state of mind for Canada that will allow us to take advantage of our most valuable economic resource.
The four themes I'm going to talk about are on this slide. I have six slides, and I hope to do them in six minutes. There are four things I want to talk about.
First of all, the best news is that extensive research is well in place, and it was sponsored by the Conference Board of Canada. It has taken over a year to complete, with extensive consultation with experts right across the country.
A second message is the need to change the conversation from the well-accepted innovation language to intellectual property, which you have heard about from my colleagues on the panel already.
The third creative suggestion I would invite government to think about is how to influence the culture of corporate governance in businesses. Government and business have been partners for a long time, yet surprisingly their intellectual property agendas are moving in different directions. It's quite interesting. They're not opposing directions, but ones that reflect a lack of vision for Canada.
Finally is a recommendation for government—if I have to leave you with something practical—and that is to exercise leadership through plain measurement: clear definitions and measurement of whether Canada is doing well or poorly and how our progress should be measured.
My first of four themes is to talk about the extensive research that is already available in the Conference Board report. I believe Monsieur Roy has distributed a copy of the executive summary, in which you will find the main themes. That report involved broad national consultation with experts and IP leaders, including every member of the panel represented here—Professor de Beer's colleague, actually....
For added credibility, it received an award of excellence for public policy impact from the Marketing Research and Intelligence Association. It was selected by Industry Canada and featured at a joint meeting between OECD and Industry Canada. It was on the recommended list of Industry Canada's library and knowledge centre. I tell you that to assure you it has endorsements of credibility for the investment the Conference Board made a couple of years ago.
There's no need to reinvent the wheel. The report has a history of international treaties, legislative changes, statistical analysis, and on page 64 the current regime in intellectual property.
The biggest thing is that everybody loves to talk about innovation. They argue about whether Canada is good or not good at innovation, and what you find is that they are talking about different things. I have taken this quote out of Humpty Dumpty, and one of the big issues there was that Humpty Dumpty would use a word to mean whatever he wanted it to mean when he said it.
I've found in my year of research that's what's happening in Canada is all good. We're all talking about things we want to happen, but we're talking about different things. I'm recommending that the conversation shift from innovation to intellectual property. Innovation is our most precious national resource, but intellectual property is what it takes to manage, govern, and organize it.
The recommendation I want to leave you with today, subject to questions you may have, is that in addition to defining innovation and stopping the debates about what it means, who's good at it, and whether we're succeeding or not, what we seem to need in Canada is a measurement directorate.
I don't mean to sound bureaucratic. There's a well-known saying that you can't manage what you don't measure, but also you get what you measure. If the country is aware of where our priorities are, businesses and journalists will respond to talk about Canada's progression in those areas.
One of the biggest areas of weakness is corporate governance of businesses. You may think it's hands off when it comes to businesses: let businesses, especially at the director level, do what they need to do. Suprisingly, intellectual property monetization is not measured systematically at the board level, nor is it even taught in director colleges, nor is it advised by our main securities regulators. It's something government can do to support where our weakest link seems to exist, and that is at the business level.
Finally, through a program of clear measurement the Canadian government would connect more directly with international organizations for harmonized policy and competitiveness tracking. Organizations such as OECD and WIPO, which talk about Canada, whether we're there or not, rank Canada and enable us to talk to them in a consistent language of measurement. That is what we seem to need most.
Thank you for your attention.
Thank you very much for the opportunity to be here today. I'm a law professor at the University of Ottawa whose work focuses on IP and technology innovation, but my views here today are my own, not those of my institution or my colleagues necessarily.
I studied this issue during undergraduate degrees in business and in law and during my graduate studies at Oxford. I practised law as counsel to the Copyright Board of Canada and continue to consult on IP issues with private companies in high-tech, law firms, government agencies, and international organizations, including WIPO.
I've published more than two dozen peer-reviewed articles and authored or edited several books about aspects of IP and technology innovation, and I lead or collaborate on numerous large-scale research projects funded by SSHRC, the IDRC, the European Commission, and Genome Canada.
Based on my research, I'd like to raise three points: first, evidence-based policy-making; second, IP management practices; and third, assessment methods and metrics.
First, on evidence-based policy-making, almost everyone agrees that the right IP framework could help to spur innovation, productivity, and growth, but it is far too simplistic to state that strong IP protection promotes innovation without understanding how. And that's why the work of this committee is so valuable. There is a general consensus among experts that the precise role of IP in innovation systems is highly variable, context-specific, and complex. So we need to inform our ideology and economic theory with evidence of actual business practices and real-world impacts in specific sectors in order to create an effective policy. That's why I echo calls made recently in the Jenkins report and in the Canadian International Council's report, “Rights and Rents”, for a high-level, independent, evidence-based review of Canada's current IP framework, toward the formulation of a nuanced policy integrated into an innovation agenda.
The United Kingdom, as just one example, has recently done this. I cite the Gowers review and the Hargreaves report as examples. Canada would do very well to follow these leads.
The second point, about changing management practices, is dealt with in a policy brief that I recently co-wrote for Genome Canada, analyzing three overlapping IP strategies actually used in practice by science and technology innovators. The focus here is on the life sciences, but the lessons are more broadly applicable to other domains of science and technology as well.
An orthodox model was to acquire as many intellectual property rights as possible in order to maximize commercial opportunities or to stockpile an arsenal to use as strategic leverage against competitors. Now there is a growing body of evidence suggesting that this model is often unviable or that it works only in specific sectors and for specific kinds of organizations. In the public sector especially, most technology transfer offices that have adopted this model can't even cover their operating costs with the revenues they generate.
Where traditional management models are failing, one popular alternative is freely revealing ideas or inventions or even raw data into the public domain. This is not altruism; this is entrepreneurship. Many Canadian firms make money or fulfill mandates with this business model, and many more use the strategy to save on the cost and complexities of acquiring, let alone enforcing, an IP portfolio. A related tactic in the business sector is tapping into the trend of open innovation. This does not abandon opportunities for IP protection. To the contrary, it uses IP in innovative ways, licensing to require rather than to restrict collaboration.
The lesson here for policy-makers is not to presume that all organizations would or should want to manage their IP in the same way. We ought not to create a one-size-fits-all framework, and the practical experience here of Canadian innovators and entrepreneurs shows that research, training, and education—not necessarily treaties and legislation—will equip Canadian companies, especially SMEs, to better exploit IP.
I'll turn to assessment methods and metrics. Because intellectual property management strategies are changing so quickly, we need to adapt the methods and the metrics we use to assess our IP and our innovation policies. This is my third and final comment.
As things stand, as Dr. Corbin pointed out, IP outputs are a substantial part of the formula that many organizations currently use to evaluate Canadian innovation. Intellectual property outputs form one quarter of the weighting of our D grade in innovation. That's attributable to our poor statistical performance in acquiring certain kinds of IP rights.
Unfortunately, the formula wrongly presumes that IP outputs indicate innovation. Innovation and invention are not the same thing. A true innovation has market value. A patented invention may or may not.
Statistics suggest that nearly half of issued patents are invalidated when they're challenged in court. That creates work for lawyers and bureaucrats, but in fact impedes innovation.
Low-quality patents can contribute to the proliferation of thickets, create uncertainty, and lead to anti-competitive practices that stifle innovation. The narrow focus on quantity, not quality, also naively implies that to induce innovation we need only increase IP protection, which could in fact make matters worse.
I submit that we need a more sophisticated analysis like the OECD and WIPO are working toward, with a much fuller range of assessment methods and metrics, including qualitative data.
In conclusion, my comments suggest that the IP-related strategies for Canada's innovation system probably don't involve many legislative reforms or new international agreements for stronger protection or enforcement. What is needed first is a comprehensive, independent, evidence-based review of our entire framework in the context of innovation policy. Only then can we consider some possibilities for meaningful, practical solutions, like better intergovernmental policy coordination, more streamlined application and adjudication procedures, and enhanced cooperation between the public and the private sector.
I'll give you two concrete examples. The idea of open innovation has been popular across a wide variety of sectors. It's being used by Nike, General Electric, and Nestlé. But there are two particular examples in science and technology. One is open-source software, which is a very popular business model for companies to move away from a proprietary framework toward an open-source framework.
On the basic idea, there is intellectual property protection, such as copyrights and often patents, that protect software or code. But rather than using those intellectual property rights to prevent other people from using the same kind of invention, you issue a licence that says other people may use that software if they agree to reciprocal obligations to further share and grow the community.
This has been applied experimentally in the context of biotechnology. There's an organization in Australia called Cambia. They're running BiOS, the biological open-source project. The first step is to make patent information about agricultural biotechnologies more transparent and easier to access, so people know what is patented and what is not. It reduces transaction costs. Then they create a repository of agricultural biotechnological inventions that any entrepreneur can easily access and use if they agree to certain conditions. Some of the conditions may be financial, like revenue sharing, and others are not. We also see universities doing this. The University of Glasgow is an excellent example, as well as North Carolina and a number of others.
I was on the steering committee that produced the OECD's recent study on knowledge networks, among other things. I should point out that while knowledge networks are part of an IP system, they're just part of it. That was very much the view of the steering committee and the OECD.
I don't think I disagree with anything the professor is saying about the importance of new routes and methods for exploiting intellectual property rights. But I differ in that I don't think if one person wants to choose a particular route—whether it's an open-source route or otherwise, where you're making information available freely, or for whatever purpose—it should detract from protecting, advancing, and enforcing the more traditional systems that still work and are still very necessary for the advancement of innovation.
The issue of collaboration is an important one, because it has been brought up as an example of something that can only really work in a sort of more open environment. In fact, the studies seem to have found—at least the ones that were made available to our committee at the OECD—that patents and a clear knowledge of who owns what actually encourages just as much collaboration as anything else.
I would urge the committee that while what the professor is suggesting is important and an interesting way of exploiting intellectual property rights and innovation, it's just one way. It doesn't mean we shouldn't take advantage of the many recommendations that have been made to this point by the past committee and many others.
There is a gap from 2007 to 2012, but I think that report is still fresh and has been built on by others since then.
I actually am familiar with the program because I subscribe to HBO. My wife keeps telling me to cancel the subscription, but I keep it anyway, because I love that program.
First, I have to emphasize that it's a very different issue from the other aspects of science and technology innovation that we've been talking about here today. So the problems facing HBO are very different from the problems facing an SME in computer engineering in Waterloo or innovation in extraction of bitumen from the oil sands or something like that. They are very different.
What I would urge the committee to do is not to conflate the moral and economic and policy reasons to address illegal downloading from BitTorrent with the IP strategy to deal with innovation in science and technology. Separate those issues.
There is one area where they overlap, though, and that is in the facilitation of legal alternatives. I believe that the key to facilitate market alternatives is to simplify and streamline licensing procedures.
I happen to teach a course on the digital music business. If you were an entrepreneur trying to establish a new legal site to sell downloads, you would find that the process is so complex because there are so many different rights holders to deal with. If we could work toward streamlining and simplifying that process.... I appeared before the Supreme Court of Canada in a case last December arguing that the court should do precisely that, and hopefully it will. That is the message: streamline.
First of all, the data show that business is the weak link in our innovation. That might be surprising. We are praised for our investment in knowledge industries. But business itself is not keeping up with the business productivity of other countries.
Why is it not happening? In my experience, it is not happening at the board level because boards of directors themselves are not properly tuned in to the immense value of intellectual property. Intellectual property is now easily between 70% and 80% of the saleable assets of most modern corporations, even corporations not in the business of creativity. Yet because it's invisible, as our first questioner asked, it's hard for boards to get around it.
Here's what's straightforward to do: put it on the agendas of boards of directors colleges. It's not on the Rotman agenda, and it's not on the McMaster agenda. It's not on the governance guidelines of the TSX or of the securities regulators in each of the provinces.
You get what you measure. You tell people this is what the performance metrics are, and that's what you will get back. It's as simple as that. It's worked for businesses ever since they discovered that mantra.
I'd like to follow up on Dr. Corbin's point about the metrics, because it's absolutely right.
One of the things government can do is to help us to take more nuanced measurements. Simply counting outputs, such as patents, cross-border trademarks, or patents per population, is not very helpful. We perform very poorly because we don't do those things, but we don't actually know what we do instead. It's entirely possible that Canadian innovators prefer trade secrets to patents. So all of that innovation that's facilitated by trade secrecy would not be captured in the data. We don't know that.
Far more important than the patent, which is merely an artifact of an invention, is the process by which the patent arose. Who are the inventors on the patent? Which countries are they from? What is the relationship between the scientific literature coming out of universities and the disclosure in the patented invention? How is that patent licensed to other actors? What is the revenue stream? What is its impact in the market?
Dr. Corbin can do some very sophisticated research on these kinds of market questions, but we currently don't calculate this kind of.... We don't have this data. We don't know. A better understanding of those kinds of questions will help us to really tailor our policies to help the sectors that we want to help most.
Thank you. And thanks to everyone for coming.
My head's practically exploding with questions right now, whether I want to go on with digital music and digital rights holders, how we ensure that their IP is properly remunerated, or do I go off on knowledge-based economy or on the issue of controls, or for an elaboration on evidence-based policy-making reviews, or the lack of IP literacy.... I mean, the directions are endless here.
However, what I've heard from everybody is that we really do need to find that nice balance, that sweet spot in IP that will offer the appropriate types of protections while not stifling any of the innovation.
Out of all of those different options, last week one of the witnesses who came forward mentioned that when a company is sold, let's say, to an American company and they have an IP, that would be subject to review under the Investment Canada Act, but if it's only the IP being sold that's not subject to review. Is this an area that any of you think may be worthy of looking at further?
I'll quickly go across for an answer.
Here's how you could help in a big way--use the words “intellectual property”. I'm just going to leave you with one big idea. Nobody knows what it is, and yet here we're talking about what we believe to be one of the most important things in the country.
One time, when I spoke to the president of the Institute of Corporate Directors, we spoke for about an hour. I thought she was getting excited about the idea. When she left, she said, “Well, thank you, Ruth. I'm sure our lawyers will know what you're talking about.”
If you could start to use the words “intellectual property” in your public addresses so that they become part of our common language, so that people say, “What does that mean?”, so that they start to talk about it, you would do us all and the country a great service.
Again, I think there's a large role for business. If you look at the various accelerator centres, I think that type of initiative is extremely important in order to promote the diffusion of ideas.
I think CIPO, I'll go back to that, has to be empowered. I think it has to be expanded. I think it has to be provided with more resources. I think the U.S. has an IP czar. Our having an IP czar is important, as is the intellectual property council we talked about. Intellectual property is important to all departments of government.
I just want to add one thing about evidence base. There are 197 footnotes in the road map for change report. There are 134 in the time for change report. There is an enormous amount of evidence that is already out there. I don't know that we really need to go about reinventing the wheel. Ruth actually has assimilated all of it.
I would be cautious in committing the government to lengthy, years-long studies of an issue that really has been studied to death around the world already.
That's right. His catch phrase is “trademark”, so we won't use that any more.
I want to start by noting that the response to the 2007 report was miserable. We had unanimous consent, and we also pushed the issues a little bit further, and we've only seen a couple of movements.
Recommendations 1, 2, 3, 4, 5, 6, 7, 8, and 16 are all of the Criminal Code. Recommendations 9 and 10 are regulations. On recommendation 11, the CBSA has been cut now by more than $100 million, which required more resources. For recommendation 12, we now have the CBSA excluded from the Shiprider program. Recommendation 13 is regulations. In recommendation 14, the RCMP needed more resources and jurisdiction, and recommendation 15 is the same with Health Canada.
When we were looking at some of the issues at that time, it wasn't just about the knock-off batteries that have mercury going into our landfills. We were looking at things like panels in hospitals that were made illegally and were deficient, and so forth, and actually had the Canada standards stamp on them. So it's quite serious. We're talking about airplane parts, we're talking about automobile parts, and a whole series of things.
My selfish concern comes from a manufacturing sector that's been battered. In 2005 we had an $18 billion manufacturing deficit of exports. It's now $80 billion. So what I was focused on, as well as the public safety side, the Health Canada side with regard to food products and so forth, was also expanding our capabilities in manufacturing again.
Where do we go from here? I've heard the word “czar”. Dr. de Beer, you talked about a panel, a commission, so to speak.
I still want us back in the game of manufacturing. How do we get there? I would ask Mr. Henderson to start, and go across the panel. I want to hear what we can do here, right now, to get us back in the game of manufacturing, because, selfishly, those value-added jobs are disappearing across this country, and innovation, intellectual property, whatever you want to talk about.... I know you want us to talk about those words, but our constituents sometimes roll their eyes back in their skulls, and it's not a topic they really get engaged in. But they do understand jobs, and I really believe this is entirely connected to jobs. I'd like to know how we get there right now.
I actually disagree. I don't think granting IP rights liberally and basically seeing that as a panacea for the problems of the manufacturing sector is the right strategy at all. In fact you're more likely to get more low-quality patents. If we just basically tell everybody to go out and get patents, it costs them money, or taxpayers' money, and what does it really accomplish?
I do agree strongly that we need to focus on innovation, because innovation is the key to enhancing productivity. There is a role for the IP system to play here. Dr. Corbin mentioned that branding is very important. But manufacturers, especially SMEs, may not know the value of the trademark system to promote and protect their brands. Sure, there's a problem of counterfeit goods and enforcement, but that's not really the root of the problem for the manufacturing sector either.
One of the things they could do is have better training and awareness and education. The Canadian Intellectual Property Office, and in fact IP offices worldwide, have databases disclosing how-to manuals for all kinds of innovative products and processes. Patents expire 20 years after the application, so there's a whole body of knowledge, technical knowledge, technical specifications, basically how-to manuals, in patent databases. Manufacturers could tap into that, find out whether the invention is in the public domain, and if so, use it, and if not, find out who owns it and start to negotiate collaborative agreements to share technology. There's a wealth of information there that could be accessed.
What incentives would make that happen? Mr. Henderson said earlier that it's business's responsibility, and they had better be working on it, and he's given examples of it. What can government do to encourage it? One idea is to promote what's important to them.
I was on a board of directors of Toronto Hydro with the late Mr. Layton. Many questions he turned to the subject of environmental protection. You could be asking about workers' compensation, and somehow he would bring it back to environmental protection, until we got it. He had clear policy ideas that began to infuse the culture of the board.
That's one way you can do it. When you speak as members of Parliament, give business direction.
Here's another thing you can do. Bring it to the attention of regulators so that when they advise businesses, corporate governors, and directors with liability about what they have to do to mitigate the risks to their corporations according to such and such standards, they will understand that the risk management of intellectual property is one of the standards.
Remember that the TSX had 13 guidelines from the Dey report, and intellectual property wasn't among them, and it still isn't among them. That's where government can help business think the right way.
Thank you, Mr. Chairman.
This has been fascinating. Thank you. It's been a very impressive panel. I think you bring a lot to it, as you have in the past.
I'm thinking that there seems to be a broad sort of agreement on the intent of what needs to be done here.
I was following Mr. Masse's question with regard to the 2007 report and the recommendations that flowed from it before it got to be, in Mr. de Beer's view, just more banal rhetoric.
I guess I'm looking to places where we can take some action.
I only have five minutes, so rather than broadly going into what action needs to be taken now, I'd like to pursue recommendation 11 from that report. More specifically, I'll ask Mr. Henderson how you think allowing CBSA to have ex-officio powers would benefit Canadian businesses and consumers.
Thank you very much, Mr. Richardson.
We're going to suspend in a moment for some business. I wanted to ask one question, though. As I heard all of the members asking questions and I heard the answers, there seemed to be two strong streams. One was innovation and creating more intellectual property to monetize that, to create jobs, etc. And there's another really strong aspect of protecting intellectual property presently.
We talked about education, etc., and Mr. Henderson made the good point regarding the separation between the whole notion of a movie being downloaded, etc., and what we're talking about here, except that it's almost a good education point in the sense that people can understand it. That's one of the things that I see: a good law has broad social consensus and is obeyed.
We talked about parents talking to kids, but I see a lot of parents selling hot Rolex contraband, sports-branded memorabilia. There seems to be a real need for strong education at the grassroots level. I'm wondering if there's any data out there at all. There was a strong education program on the movie industry. You would walk in and see a movie, and then they'd say if you do this, we'll prosecute you. Was there any measurement done? Has there been any broader awareness? Have they seen a reduction in the downloading or stealing of movies since they did that campaign and we actually introduced stronger legislation?