Globe Article = Judy

The Globe and Mail

Patents ought to be part of business arsenal

Wed May 20 2015

Page: B4

Section: Report on Business

Byline: BARRY SOOKMAN, JUDITH McKAY

On May 9, The Globe and Mail published
'Canadians can innovate, but we're not
equipped to win,' by Research in Motion
co-founder Jim Balsillie. This is part of a
series responding to and expanding on that
essay.

Jim Balsillie is right: We need to
implement a concrete plan to support and
capitalize on Canadian innovation. Our
current approach is not the path to
prosperity.

We need only look to the global companies
that have successfully commercialized
innovation to see that our approach hasn't
measured up. One of the salient differences
between Canadian companies and others is
their perspective and approach to
intellectual property, especially patents.
Companies around the world, and
especially in the United States, recognize
their strategic importance throughout the
entire innovation ecosystem.

In Canada, many businesses still view
intellectual property as arcane. These
businesses may obtain a significant number
of patents, but haven't positioned
themselves to strategically harness their
value. Canadians play nice and tend to
think of patents only as defensive tools,
rather than as weapons. This is not the way
to unleash the wealth our innovators and
entrepreneurs are capable of generating.
Leaders at most successful global
technology companies understand the
strategic worth of a patent portfolio and use
it as powerful ammunition for increasing
business value and beating the competition.
Executives, researchers and lawyers
collaborate to develop comprehensive
business strategies for exploiting
intellectual property.

Litigation and commercial lawyers work
hand-in-glove with patent counsel to
develop offensive and defensive strategies.
Universities partner closely with industry
to develop, protect and monetize their
intellectual property. Governments are
highly supportive of business and help
them capitalize on their innovations. This
sophisticated global approach is built on
robust, long-term leadership and solid
business planning.

When there is a market shift, the most
successful global companies invest
substantially in research to address unmet
market needs.

Patents multiply at a dramatic pace as each
company strives to achieve a dominant
position - analogous to an arms race. If the
players' patent portfolios are on relatively
equal footing and customers want a variety
of solutions, there may be some skirmishes,
but ultimately there is a form of detente
through cross-licensing arrangements.
Those businesses that don't make the
investments to protect their IP, or that cut
corners on patents protection, lose their
ability to cross-license, or have to pay
substantial fees to do so.

If the stakes are high enough and
companies feel they have a competitive
technological edge protected by a stronger
patent portfolio than the competition, they
go to war and lawsuits proliferate. A prime
example is the smartphone industry, where
the web of lawsuits among manufacturers
is byzantine. As the digital economy
continues to cause massive disruption to
traditional business models, the disputes
will only get more frequent and increase in
intensity.

Canadian businesses that rely solely on
their technology and marketing prowess
lack a key leg in the competition stool.
As Mr. Balsillie noted, Canada's innovation
performance will only improve if business,
university and political leaders come
together to consider radical solutions.
Canadian businesses need to understand
intellectual property's importance to their
competitive potential.

Training lawyers with the right skills
would be a first step, but as the survey Mr.
Balsillie referred to pointed out, over all,
Canadian law schools are falling short. In
some parts of Canada, law students can get
only the most basic level of IP education;
the most diverse programs are generally
concentrated in Ontario and Quebec. There
are few schools that offer even core courses
in patent law, let alone courses in
competitive patent strategies. Furthermore,
the publications of full-time academics in
Canadian law schools reveal an emphasis
on theoretical aspects of IP law, much of it
advocating for weaker laws. Far less has
been written on strategic use of existing
laws to obtain, exploit and commercialize
IP.

A considerable portion of this research is
funded through government grants,
research chairs and salaries for full-time
faculty. If Canada really wants to support
innovation, questions need to be asked
about whether this helps support innovation
and whether our resources can be better
invested.

It is true that the patent system has been the
subject of considerable criticism, most
recently related to patent trolls and poor
patent quality. But Canadian businesses
and those who support our innovation
ecosystem can't sit idly by, criticizing and
waiting for patent systems to be
recalibrated abroad.
The largest market for Canadian innovation
is the United States. Commercializing in
the more litigious U.S. environment is not
for the unsophisticated or faint-hearted.
Meanwhile, global companies are entering
Canada with technologies that have the
potential to disrupt many of our established
financial services, telecom and
resource-based industries.

Accordingly, it's critical that we strategize
at the national level about the
multidimensional innovation chess game
being played out in the world's boardrooms
and courtrooms.
We must unite to implement a concrete
plan to support Canadian innovation - and
capitalize on it.


Barry Sookman is a senior partner in
McCarthy Tetrault's technology law group
and former head of its intellectual property
group. He teaches intellectual property at
Osgoode Hall Law School and blogs on IP
issues at barrysookman.com.

Judith McKay is a patent lawyer
specializing in intellectual property
strategies at McCarthy Tetrault. She is also
the firm's chief client officer.