Beyond Patents: Canada’s Intellectual Property Puzzle

Originally produced for the Innovation Economy Council (IEC). The IEC is now the The Conference Board of Canada’s Canadian Centre for the Innovation Economy (CCIE).

Read the detailed report here.

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There is a widespread perception that Canadian inventors and entrepreneurs are lagging badly in the global race for dominance in vital areas of technology. Worse, our collective failure to harness and monetize intellectual property in artificial intelligence, life sciences and elsewhere has put the country on a downward economic spiral. And so we chronically struggle to turn our best innovation into commercially viable businesses because we are aren’t doing enough to stake our claim to intellectual property. 

The reality is, of course, more nuanced and complex. Across the broad spectrum of Canadian companies, it is true that the level of sophistication about intellectual property is relatively low. Fewer than one in five businesses own some form of intellectual property, which can range from patents and trademarks to trade secrets and confidential data, according to a 2019 Statistics Canada report (Intellectual Property Awareness and Use Survey, 2019). IP literacy may be even lower among small companies. A recent survey by the Canadian Intellectual Property Office found that while most SMEs are at least slightly aware of patents, only two percent of them actually own one or more patents. 

Compared to the rest of the world, Canada’s share of global patents has been slipping. Canadian inventors ranked 14th in the world in 2019 in the number of global patents filed, according to the World Intellectual Property Organization. And we aren’t even in the top 20 among countries in filing patents relative 

to population size and GDP. 

The knowledge and sophistication about IP vary widely from industry to industry, and even within the technology sector. Life sciences and computer hardware-based companies are far more likely to have substantial IP portfolios than software and service providers. 

A just-completed survey by the Innovation Economy Council found much deeper knowledge and use of IP among a select group of ventures that have been advised by one of the four hubs that participated in the survey. Of the 50 companies that responded, 90 percent of them own trade secrets, 71 percent have registered patents or patent applications pending and 59 percent have trademarks or service marks already registered or pending. 

Those surveyed have active IP policies and get outside legal advice, based on responses from the companies that identify as working in the clean technology, health, digital, software and mobile media sectors. This suggests that companies that seek advisory services are either more sophisticated or are benefiting from inputs at a hub level. 

But how companies handle their intellectual property is only one factor that determines whether or not companies succeed or fail in Canada. Ambition, access to capital, talent, government financial support and having a viable business model all play crucial roles, according to the CEOs interviewed.