Re-elected Liberal government must prioritize Canadian IP ownership, innovation advocates say

The re-elected Liberal government should make Canadian intellectual property ownership protection their first research-related priority, say innovation advocates.

Prime Minister Justin Trudeau’s campaigned on a new $2-billion Canadian advanced research agency modelled after the U.S. Defense Advance Research Program Agency (DARPA). But innovation advocates told Research Money the Liberals should hold off on creating the new agency.

“The key thing is the commercialization of Canadian-owned IP and data assets until long-term economic growth (occurs). Not one-off reactionary things, not job strategies that are really focused on opening up branch plants,” said Jim Hinton, a Kitchener, Ont.-based IP lawyer.

“It's Canadian-headquartered companies that are commercializing their technology globally, bringing revenues and economic prosperity back to Canada.”

Hinton is also a co-founder of the not-for-profit Innovation Asset Collective, which helps small- and medium-sized companies grow and expand data-driven clean technology projects.

Time for policy, not politics, says IP lawyer

Now that the election is over, it’s time to move “away from politics to actual policy,” Hinton said.

He says that a Canadian DARPA-like agency is “not a bad idea,” but that there has been an overemphasis on invention instead of commercializing ideas at scale. Canadian companies need to do many things at once, much like hockey players, he said.

“Canada is a significant have-not when it comes to IP ownership,” he said. “Not only do companies need to keep the IP that they're generating and commercializing, but they need to navigate the positions of other players. [Canadian firms] not only need to be able to skate fast and shoot the puck, but they need to manage the offence of other players. That is freedom to operate — and without that, then you can't commercialize.”

Dan Breznitz, a University of Toronto political science professor who co-directs CIFAR's Innovation, Equity and The Future of Prosperity program, said the Trudeau government should put “serious clauses” in research grants that ensure companies and entrepreneurs keep new technologies in Canada. He argues that if new technologies are taken out of the country, grant recipients should be subject to “hefty fines” — an arrangement that has existed in Israel for many years.

But he said the Trudeau government’s first priority should be to determine why most Canadian businesses do not innovate.

“Obviously, just giving them more money does not work,” he said.

People who have led the Canadian economy do “almost zero R&D” but are now blaming Ottawa for not injecting capital into it, he added.

“All those people who pontificate about DARPA, and all the rest, don't do their job as social actors in Canada. … They do not engage in R&D and they do not innovate,” said Breznitz. “So, we have to figure out how to help them in whatever way possible.”

U of T prof calls Canada a “missed opportunity”

Breznitz opposes a Canadian version of DARPA on the grounds that it will merely enable companies and entrepreneurs to create ideas — something research universities already do very well — and spell continued stagnation for Canada’s innovation ecosystem.

“Canada is a historic missed opportunity,” he said. “We have the world's best inventors and they are stuck with a business sector which is the world's world worst innovator, and we need to fix that.”

He said the U.S. DARPA only works because the American defence department has fostered universal co-operation by implicitly promising to “buy to the tune of billions of dollars.” But, he added, American efforts to replicate DARPA in other domains have failed.

Ottawa could be better off following the “very simple example” of the U.S. Small Business Innovation Research (SBIR) program, which funds R&D projects conducted by companies of 500 or fewer employees.

“The companies that get money are those that slowly but surely innovate more, not the companies that innovate one time and not the companies that stagnate innovation,” he said. “If the Americans can do it, so can Canada.”

Large-scale Canadian government procurement could work if the funds only go to new companies, he added.

“I think the government has put in the money,” he said. “I think the terms of the money need to be changed — direct grants instead of tax incentives — and I think we need to be much more selective over time, meaning companies that start to innovate and innovate more get more money. Companies that don't innovate don't need to get any government money.”

Asselin lauds Liberals

Robert Asselin, senior vice-president of policy for the Business Council of Canada, said a DARPA-like agency would connect research with commercial outcomes.

“I don't pretend, and I don't think that anyone pretends, that an institution like this will, by itself, make Canada a global superpower on innovation,” he said. “I think, though, that it's a missing link that is required in our ecosystem.”

Canada would not copy the U.S. DARPA, he added, because the Canadian version would not fund military projects. It could be adapted to cover a few key research areas that the Liberals have already prioritized, such as clean tech, climate change, agri-food and advanced manufacturing.

“It's not a one-size-fits all solution for innovation policy,” said Asselin, who praised the Liberals for putting the idea in their platform.

For months before the election, he was an outspoken advocate for a Canadian DARPA. He said the U.S. model works because it’s very nimble, involves the private sector, is not bureaucratic or subject to “political capture,” and requires a lot of expertise.

But, like Hinton and Breznitz, he wants the Liberals to focus on Canadian IP ownership protection first and do a “fundamental rethink around R&D.” Ottawa needs to take the time to fully understand how a Canadian DARPA would work, he added.

The Liberals pledged $2-billion in funding after the Conservatives promised to spend $5 billion on their version of DARPA.

In the costed version of their platform, the Liberals have only committed to funding the initiative in 2022-23. But Asselin said the $2-billion allocation is a sufficient start, that the money has been budgeted and Canada’s private sector will also inject future dollars.

He added that he does not want Ottawa to proceed quickly and create “another kind of National Research Council or something like that.”

“I just think we need to get this right.”

Correction: A previous version of this story stated that Dan Breznitz co-chairs CIFAR, a Canada-based global research organization. That is incorrect; he is in fact a CIFAR fellow and the co-director of CIFAR's Innovation, Equity and The Future of Prosperity program.

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