Brandon Evenson is a 2010 JD Candidate at Osgoode Hall Law School.
On February 11, 2010, IP Osgoode and the Hennick Center for Business and Law hosted their second conference on Intellectual Property, Innovation and Commercialization. Similar to last year’s conference the speaking panel and audience were composed of various stakeholders from government, industry and academia representing a wide array of ideas and views.
Last year’s conference focused on the key challenges of commercializing innovations. This year’s conference had a slightly different tack. Speakers and panelists challenged many fundamental preconceptions about innovation and commercialization. Here are some of the ideas discussed at this year’s conference:
Having a valid patent on a good idea is enough. Keynote speaker Loudon Owen, Chairman of i4i, recounted the i4i patent litigation story. The i4i story is a good reminder for small, medium-sized businesses that simply holding a patent may not be enough. Being able to enforce a patent is equally important. Mr. Owen had a number of lessons to share from his experience holding and enforcing i4i’s patents. First, there is very little incentive for large corporations to not infringe a small company’s patent. Except for legal fees, in the worst-case scenario, the large company will simply have to pay what it should have paid in the first place. Very few small companies can afford to sue and enforce their patents against a significantly larger opponent. The second lesson is that patent litigation is a lifestyle and not about the money. It is a deep commitment. If it is about the money it is simply easier to settle. Third, the press can be a very powerful force. And fourth, business is about people and so is patent enforcement. If the board of directors of a small/medium-sized organization is approached with a patent problem, they become concerned. There are a number of challenges and difficult questions board members are not likely able to answer: What does the patent cover? Is there evidence of infringement? Is the return worth the risk? Should a licence be negotiated, should there be litigation, can the infringement be ignored? How is litigation going to be funded? Will the company management and inventors be willing to testify? So far successful in their patent enforcement litigation, i4i’s experience provides good lessons for companies (particularly SMEs).
Complex technology transactions are symptoms of the problem with IP laws. One of the issues discussed at last year’s conference was how inventors, academics, and students frequently do not have the necessary legal and business skills to commercialize their innovations. Some blame has been placed on IP laws for not accommodating these individuals by adding unnecessary complexity. Panelist Professor Sean O’Connor from the University of Washington School of Law provided sound arguments, however, on why IP and licensing are actually a good thing and can work to the interest of innovators. Though IP laws and licensing can be confusing, hard to navigate, and time consuming, innovative licensing can be used to help small companies stay afloat and organically grow. Panelist Professor Johnston provided a number of case studies where complex technology licensing with customers and suppliers were useful in providing income for further research and development. In some cases the true value of the innovator’s IP (and the most viable business idea) was the process or components of the invention, not the product or the invention itself.
The failure of a new company is a bad thing and efforts should be made to avoid this. Panelist Marc Castel is the Director of Commercialization in the Waterloo Region, Centre of Excellence for Commercialization of Research. In his talk he characterized some of the ways startup companies can go wrong. They include: 1) Not starting with a customer in mind, not staying on budget or meeting development deadlines, not having enough resources at the outset to commercialize, not having the necessary technical, business and legal expertise or guidance, and not managing IP effectively. Despite these issues, one of the most significant problems he highlighted during his talk was that failing ventures are not allowed to fail fast. In the US, failing is frequently viewed as a badge of honour. Entrepreneurs take pride in how many companies they have failed and how much money they have spent trying. Such a view coincides with Silicon Valley’s innovation lifecycle as discussed at last year’s conference by guest speaker James Isbester. In Canada, however, Marc Castel found that failing is accompanied with stigma and that significant efforts are made to avoid failing. Such an attitude, he feels, is dangerous and companies should either succeed quickly or fail quickly. Failing slowly just takes resources (R&D time and money) from other ideas and firms which have greater chances of success.
More R&D is better for the economy. Panelist Professor Moren Levesque described a recent study she undertook on the role of entrepreneurs and research and development (R&D) as necessary conditions for economic growth. She found that there is not always a positive correlation between economic growth and investment in innovation. Empirical results show that some states invest heavily in R&D but see no economic growth. Using these empirical results Professor Levesque developed a mathematical model. Her model showed that innovators are not the only group affecting economic growth. Imitators – people who take an innovative idea and copy it - also have an important function. Her model suggests a balance is needed between imitators and innovators to maximize economic growth.
Video recordings of all the presentations from the conference, including the power point presentations, are archived on the IP Osgoode website and are available here.