Q&A: Innovation Asset Collective co-founder Jim Hinton on winning the race to the patent office
November 16, 2021
In the months leading up to the September federal election, Canadian IP protection became a campaign issue. Groups like the Business Council of Canada and Council of Canadian Innovators called on Ottawa to help Canada keep pace with the rest of the world.
In response, Prime Minister Justin Trudeau’s Liberal government pledged to create the $2-billion Canadian Advanced Research Project Agency modelled after the U.S. Defense Advanced Research Project Agency (DARPA), which helped launch the Internet and other major technological advancements.
Jim Hinton, a patent lawyer based in Kitchener-Waterloo, says Canadian businesses need to win "the race to the patent office." His law firm, Own Innovation, helps tech startups and other firms secure IP ownership. He is also a fellow at the Centre for International Governance Innovation, teaches patent law at Western University and volunteers with Communitech, an innovation hub based in Kitchener-Waterloo.
In 2020, he co-founded the Innovation Asset Collective (IAC), which launched this year with $30 million in federal funding. The IAC’s services include providing financial assistance to Canadian companies filing and prosecuting patents, access to global IP experts, and opportunities for Canadian universities to support Canadian small-and-medium-sized enterprises (SMEs) with IP.
Research Money spoke to Hinton about the challenges facing tech developers, researchers and policymakers surrounding IP.
In a nutshell, what do people need to understand about IP in order to leverage the business opportunities or business case?
You can't commercialize what you don't own. Somebody else can copy it and [then] you're competing on the same thing. So if you don't own your innovations, then you have nothing to sell. The core thing is making sure that you're protecting what's valuable and you do that through intellectual property. Because it is a negative right, a significant challenge that most companies overlook is managing the IP position of other players. It's not just that you need to protect what you've come up with, but you also need to figure out ways to navigate other people's IP positions.
What do you recommend as the first step that any business does when it comes to protection?
To me, it's about understanding what is valuable, so aligning the technology with the business need and then using intellectual property and the different forms and the different levers and the different timing and different resourcing to execute on that business need. If the value is something that can be patented or something that can be kept a trade secret, at least initially, then make sure you do that. But to do that, you need to have a relatively good understanding of intellectual property and the options to be able to use when needed.
What's your advice to researchers regarding IP protection in cases where they might not actually develop or commercialize the finished product?
Key thing for researchers is to be able to maintain enough of a level of exclusivity (on) the research and then commercialization of this research, so those people will have some level of exclusivity, so they'll be able to invest into building the next piece of it.
There can be this hand-off and you can hand off, or continue if you do it yourself, but continue having value in that. And then for researchers that are under the obligation to publish — you may be at a university — it presents a challenge in that, once you publish, then trade-secret protection obviously doesn't protect you. And then you start to have less and less options about how somebody can take that and use that to commercialize.
What about researchers who are sharing IP with, say, a tech developer?
You can over-protect something where you basically kill it and people don't want to work with you because you're asking for too much in exchange for it. So you need to have this balance between protection and sharing, this free flow of ideas but understanding where the value is and how that can escalate and become more valuable quickly. You don't want to lock everything down, because then you don't get honest feedback on where it's going and then you also prevent further growth of the research.
What made you want to start the Innovation Asset Collective?
That project is something that is really from a recognition that Canadian companies don't have freedom to operate and are basically going into the world relatively unequipped. Canadian companies own less than one per cent of global IP. So, really, studying the global best practices around intellectual property out of the policy research that I did at the DEEP Centre [the short name for the Centre for Digital Entrepreneurship] with the sovereign patent funds [funds created by public bodies but managed day-to-day by others at arm’s length] and understanding what other countries like Canada, similarly situated — like France, Japan, Korea — have done to improve their IP positions.
That was really the impetus to support and create IAC. We were awarded the [money] and then started going, maybe, a year ago and then launched.
What do you see as the IP challenges facing small companies?
[For] early-stage, very small companies, I think the key challenge is resources and making sure that you appropriately invest in IP — not over and not under — and knowing where that balance is, just like knowing where else to spend resources. And, I think, from an early-company perspective, it's about building value long term, and IP is a long game. But recognizing the sooner you do something, the more value it can have. It's a race to the patent office. If you get in there first and it's a decent enough idea, then you could be in a very good position, recognizing that most ideas don't pan out. But if they do, then you want to be in a position to be able to extract value where you can.
You have also called for the federal government to prioritize Canadian IP rights as well, considering the low level of Canadian IP ownership. What do you think of the U.S. DARPA-like organization that the Liberals have proposed and have indicated that they could take action on?
I think it's good and, as we discussed before [in another article], there's many ways to do it wrong. So making sure that they have the understanding of where to do it correctly, strategic procurement and strategic initiation of ideas is valuable — and it's critical to ensure that that value is retained. There's no sense in encouraging the creation of a number of ideas if, long term, there isn't a significant amount of economic activity that comes off of that. If most of the economic activity is happening elsewhere globally and not here, then it's not worth the investment.
To make it worth your investment, you need to put those measures in place so that you're able to capture the economic value and IP is central to that. Again, you can't commercialize what you don't own. If Canada wants to be the one that reaps the economic benefit of investments in programs like that, then it needs to recognize who is going to be the beneficiary, and is it Canadians or is it the Americans or the Chinese? They're going to ultimately be the ones that commercialize this technology at scale.
Do you you think that the government, now being in a minority again, will carry out what it has pledged to do?
I would say so. So, all indications, yes. Everything that they have announced in the spring budget as well as part of their platform, I think that there's indications that they'll continue on with that.
I think that this government has a tendency to announce projects and then it takes a long time for things to get off the ground. So the first step is understanding the need. The second step is saying that you want to do something about it. But being a global champion when it comes to technology is not as easy as just saying that you want to do it. Execution is everything on this. Regardless of how much money you pour into something, the Americans, the Europeans, the Chinese, the Koreans — everybody else is out there and already well-armed.
Who, or what type of leader, would you like to see execute this strategy to achieve the goals?
The real challenge is that in both a minority government situation and in a world where Facebook likes and Twitter clicks drive what political parties do, it takes real long-term ambition beyond election cycles to be able to put this into place, and countries like the Chinese, certainly because of how they're set up, have that inherent in their system. But the Americans with their strong corporate influence over policy have that influence as well. Canada is left nowhere in between.
Our large Canadian companies are primarily domestic and they’re non-innovative and, really, of no use [in terms of] policies coming from them. So it's really turning to Canadian innovators, who are SMEs and growing, scaling companies, just to understand what innovation success is and how it needs to be executed.
Keeping the Canadian innovators and experts in IP very close to the policy-making process [is crucial]. Otherwise, you'll be outgunned at every move because of the depth of investment that international players are making — the Chinese, the American companies — and the significantly dominant position that they already have in the global market.
What can be done, if anything, to protect against the election cycles and different dynamics of majority governments and minority governments and so on?
It's recognizing this long-term opportunity and not caving to short-term job strategy stuff. For the last five, 10 years, it's been all about jobs, jobs, jobs. Economic prosperity and productivity is where we need to go. That may have been the talking line, good middle-class jobs, but there’s not enough people to fill the existing jobs. More job creation does not necessarily need to be a focus.
This interview has been condensed and edited for clarity.