With introductory remarks by ISED Minister, the honourable Mr. Navdeep Bains, Canada launched its Innovation Asset Collective (IAC) on December 9, 2020. This $30 million pilot program founded and directed by Chris Wormwald, Jim Hinton, and Peter Cowan is aimed at supporting Canadian IP growth and retention, particularly in the data driven clean energy space. In addition to providing high level education and IP strategy, the IAC plans to protect its members by developing a prior art library and landscapes as well as a strategic IP portfolio. This library, landscape, and portfolio will be cultivated to defend its members against litigation pressures, particularly from large foreign non-practicing entities (NPEs), with the goal of making Canada a more hospitable technology ecosystem.
Minister Bains highlighted how IP rich small and medium entities (SMEs) are twice as likely to be high growth and four times as likely to export. He pointed directly to cleantech as part of Canada’s needed “green recovery” from the financial impact of the ongoing pandemic. He looked to the patent collective to help Canada in its transition from an “industrial economy to an innovation economy” and explained how the IAC will “foster the collaboration that will bring Canada to a sustainable future.”
Following Minister Bains’ remarks, a roundtable lead by Mr. Hinton featured Lally Rementilla from IAC partner Business Development Canada, leaders from two potential IAC member companies, Daniela Roper of Borealis Wind and Jon Lipinski of Ecopia.ai, and Mr. Cowan of the IAC. The potential members provided insights as to how the IAC would act as a shield for member companies that draw the attention of international behemoths, particularly nonpracticing entities, which are concerned about their freedom to operate. They relayed how as their companies mature, their IP becomes both a threat and attractive to these behemoths. They are therefore exposed to risk created by the leverage the large companies’ substantial IP portfolios can bring to bear.
Mr. Cowan described how these issues are being exacerbated during this pandemic driven downturn as the cost associated with holding patent assets encourages companies to sell them and how this gives NPEs the opportunity to amass patents at low costs. He relayed how the financial pressure furthers the gap between those companies and countries who can think about IP and those who do not have the capital to do so. For him, it is important how Minister Bains has positioned Canada well in this space and that the IAC is a key piece in supporting Canada’s endeavours to be one of the countries that thinks about IP by helping companies with the burden of doing so.
Both Mr. Hinton and Mr. Cowan explained that the IAC was not going to replace traditional IP service providers nor is its goal to acquire patents either from or explicitly for the practice of their members. Rather, its mission is to “give companies the knowledge base to help them ask the right questions of the IP service providers” and to provide them with the intelligence to back up those questions. The idea is to create a situation where the members can better engage with their service provider.
Mr. Cowan stressed that it is the intention of the IAC to tailor its patent portfolio to its members’ needs as they develop, but as an initial approach, it will make acquisitions to pull low value deterring patents off the market and to rescue patents at risk of being abandoned from being acquired by entities that would pose as an obstruction. While the IAC may license to members or provide a covenant not to sue, the primary purpose is to clear the way for Canadian innovation.
The plan, which Mr. Cowan said was not novel but rather tailored to the Canadian environment, is to use the collective force of Canada as a whole to acquire a strategic defensive patent portfolio, to provide a shield for its members. This will allow Canadian SMEs to operate in the same waters as these larger typically foreign entities with at least some cover.
With its launch, the IAC is now accepting members and is excited to begin the work of supporting Canadian SMEs to better understand, commercialize and protect their IP.
Jared Sues is an IP Osgoode Innovation Clinic Coordinator and regular IPilogue Contributor