PARLIAMENT of CANADA

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Government Response

to the Third Report of the House of Commons

Standing Committee on Industry, Science and Technology

Intellectual Property Regime in Canada”

June 2013



Mr. David Sweet, M.P.
Chair
Standing Committee on Industry,
Science and Technology
131 Queen Street, 6th Floor
House of Commons
Ottawa, Ontario  K1A 0A6

Dear Colleague:

Pursuant to Standing Order 109 of the House of Commons, I am pleased to respond on behalf of the Government of Canada to the recommendations made by the Standing Committee on Industry, Science and Technology in its report entitled Intellectual Property Regime in Canada, tabled in the House of Commons on March 18, 2013.

The government commends the members of the Standing Committee for their valuable study examining Canada’s intellectual property regime and making recommendations on how the regime can be made more effective in advancing innovation.

The government also thanks the many witnesses, including businesses of all sizes, associations, research organizations devoted to commercialization, and experts who appeared before the Committee.  Their insights on the many challenges faced by inventors, innovators, and creators in bringing ideas and inventions to market are indeed invaluable.

The government welcomes the 21 recommendations in the Standing Committee’s report.  These recommendations are consistent with advancing Industry Canada’s mandate to foster competitiveness by developing and administering economic framework policies that promote competition and innovation, support investment and entrepreneurial activity, and instill consumer, investor and business confidence.

Yours sincerely,

The Honourable Christian Paradis, P.C., M.P.

Introduction

The granting and protection of intellectual property (IP) rights aim to promote innovation and creativity and are an essential element of our market-based system. Patents, trademarks, copyrights and industrial design are the principal instruments used to establish ownership of inventions and creative ideas in their various forms, providing a legal foundation to generate tangible benefits from innovation for companies and consumers.

The Government has taken full account of the Committee’s recommendations and the following section addresses each recommendation. The recommendations in the Committee’s report were grouped under five headings on pages 50 to 53. For the purpose of the Government’s Response they are grouped into four categories:  (1) Policy; (2) Business Use of IP; (3) Private-Public Collaboration; and (4) Enforcing Property Rights Protection.

1 - Policy

Recommendation A-1 (p.50):

“That the Government of Canada review international best practices on developing an evidence base to support IP policy decision-making and to determine how IP contributes to the performance of the Canadian economy.”

Response:

The Government agrees with this recommendation and grounds policy decisions on economic evidence, input from stakeholders, and international best practices. 

For example, in modernizing Canada’s copyright regime, the Government of Canada established a forum to receive evidence and hear stakeholder concerns regarding changes to copyright law being contemplated. The Copyright Modernization Actwas the result of one of the largest national consultations of its kind in Canadian history.  Consultations started in 2009 whereby Industry Canada and the Department of Canadian Heritage held eight weeks of national consultations on copyright to which over 1,000 Canadians attended live events and more than 8,000 written submissions were received. Later, as part of the parliamentary process, an extensive review of the Copyright Modernization Act was conducted by legislative committees studying Bill C-32 and Bill C-11. These committees heard from more than 110 witnesses and received more than 250 written submissions. These forums allowed for the examination of submissions and studies on anticipated impacts of policy changes, including considering the experience and best practices of other countries that had gone through similar changes. This evidence is ultimately reflected in the design of Canada’s copyright regime.

Similarly, Canada is a member of the World Intellectual Property Organisation (WIPO). WIPO’s mission “is to promote innovation and creativity for the economic, social and cultural development of all countries, through a balanced and effective international intellectual property system.” Canada participates in WIPO committees where countries discuss emerging issues and share information on best practices. Officials from Industry Canada, CIPO and the Department of Canadian Heritage use these forums to learn about approaches used by other countries to fill knowledge gaps and tailor their frameworks to their particular economic context. Industry Canada and CIPO also work closely with other countries and cooperate with other Intellectual Property Offices to exchange ideas, economic research and best practices. The Government of Canada will continue to make use of these international opportunities to ensure policy decision making is anchored in evidence. 

Recommendations A-3 (p.50) and B-5 (p.51):

“That the Government of Canada (in order to support Canadian businesses on the global stage and ensure the administration of Canada’s IP regime is internationally compatible and streamlined) ratify the following key international agreements: the Patent Law Treaty, the Madrid Protocol and Singapore Treaty for trademarks, and the Hague Agreement for Industrial Designs.”

“That the Government of Canada work with the Canadian Intellectual Property Office to introduce regulations and legislation that will reduce the time it takes to grant IP rights and bring Canada in line with other countries.”

Response:

Canadians are increasingly moving their innovations into the global market.  From 2000 to 2011, patent applications by Canadians abroad increased by 76%. This outpaced Canada’s GDP growth of 60% over the same time period. We need to support these and other Canadian businesses in taking advantage of the growth opportunities offered by foreign markets. An important way to do this is to align Canada’s IP system with its international counterparts through international cooperation and IP agreements.

Further consideration will be given to the potential benefits of international IP agreements such as the Madrid Protocol, the Singapore Treaty, the Patent Law Treaty, and the Hague Agreement for international deposit of industrial designs. For example, the Madrid Protocol and Hague Agreement are intended to help businesses register their IP in multiple jurisdictions with a single application, reducing red tape, uncertainty and costs.  The Patent Law Treaty could allow for simpler formal requirements and more flexibility for Canadian business regarding the content of their application. The Government of Canada is currently negotiating a similar treaty in the area of industrial design law. These international agreements could also facilitate foreign IP filing in Canada which helps make Canada a destination for investment.

An IP framework that effectively supports innovation must focus on providing a benefit to applicants while serving the public interest. Based on the need for a modern IP framework that is both internationally competitive and supports the current business environment, CIPO continually evaluates its regulatory and administrative systems to ensure they serve businesses by: (1) reducing regulatory and procedural burdens; (2) streamlining procedures; and (3) improving alignment with Canada’s major international trading partners to allow business better access to international filing systems for IP.

CIPO is moving ahead into its second year of process modernization and investments in process and information-technology improvements to reduce waste and time lost in the application process.  This includes setting targets to materially reduce turn-around times throughout the patent prosecution process, the trademark and industrial design registration process as well as within the Patent Appeal Board and the Trade-mark Opposition Board.  As an example, CIPO is targeting a reduction in the time involved in processing patents from 50 months to 33 months by 2016-2017.  This will be brought about by process and information technology changes and modernizing elements of the legislative and regulatory framework.  These processes of continual improvement will help bring Canada in line with the performance of our major trading partners. The Government remains committed to ensuring the administration of the IP regime is efficient and reflective of current business realities.

The Government will undertake consultations in relation to several international agreements relevant to IP. If appropriate, the Government will consider regulatory and legislative changes that may be required to:

  • position Canada so as to be consistent with the Madrid Protocol and Singapore Treaty to simplify procedures for businesses resulting in cost and time savings for Canadian businesses registering their trademarks in several countries. The Government will consult with stakeholders on the implementation of these changes to the trademarks regime.
  • position Canada so as to be consistent with the Patent Law Treaty to make the patent system more efficient for businesses; and address concerns over procedural requirements that can contribute to inadvertent abandonment of patent rights . The Government will consult with stakeholders on the implementation of these changes to the patent regime.

The Government will consult with stakeholders about the benefits and required changes associated with positioning Canada to be consistent with the Hague Agreement on international deposit of industrial designs.

The Government will also ask CIPO to look into other legislative and regulatory changes required to reduce the time it takes to grant patents and trademarks while preserving high quality patents and trademarks. Granting quicker IP rights, while also preserving quality, ensures innovations reach the market more quickly and business can implement strategies more quickly for the benefits of consumers and other innovators.

As part of consultations the Government will also look into the issue of protecting confidential communications between owners of patents and trademarks and their Canadian IP agents. Currently such communications are not protected from disclosure in litigation in Canada unless they are protected under solicitor-client privilege. Some are concerned that this may place Canadian innovators at a disadvantage in litigation in other jurisdictions, such as in the U.S., where confidential communications with domestic IP agents are protected but not necessarily those outside of that jurisdiction. The Government will consult on the merits of providing this privilege and the means to provide it.

Recommendation B-2 (p.51)

That the Government of Canada examine domestic and international patent Frameworks to determine whether the proper balance is reached in Canada between incentivizing innovation and fostering competition in the marketplace. In so doing, the Government should identify ways to: i) strengthen patent quality; ii) enhance patent disclosure; and iii) improve the efficiency of the system for enforcing patent rights.”

Response:

The Government recognizes that an effective patent system is one that incentivizes innovation to promote competitiveness in the marketplace. The patent system promotes innovation in a number of ways: it provides innovators with market exclusivity to allow them to recoup their investment in R&D and reap benefits from their innovations; it makes information on inventions available to the public to facilitate new discoveries and improvements (follow-on innovation); and it encourages “work around” innovations that provide alternatives to currently patented inventions, leading to more choices for consumers and increased competition in the marketplace.

However, as the Committee heard from witness testimony, a property rights system characterized by high rates of litigation and poor quality patents can undermine innovation.  This speaks to the importance of continually striving for a balance between rewarding innovation today and facilitating innovation in the future.

As the recommendation indicates, there are three key elements at the core of a well functioning patent regime: i) the quality of the patent rights granted; ii) the release of and easy access to the technological, scientific and intellectual information contained in patents, which can aid follow-on innovation, facilitate business opportunity, and support decision making; and iii) an efficient system of patent rights enforcement. How well these three elements are performed will have implications on the capacity of the patent regime to promote innovation and foster competition.

i) Quality

Poor quality patents can have the effect of increasing the threat of litigation and hindering innovation. One important way to ensure the patent regime is balanced and effective in incentivizing innovation is by granting quality patents. Patents are most effective when the boundaries of the patent are well defined and the invention itself is clearly and accurately described. High quality patents bring certainty both to the market and to the innovator.

Issuing quality patents is the core of CIPO’s mandate. CIPO works to ensure quality patents by work-sharing with other intellectual property offices on various quality initiatives, including quality feedback, mutual recognition of work, and sharing of best practices. CIPO is examining ways to actively encourage the submission of prior art from third parties to strengthen the usefulness of Canada’s third party pre-grant process. Information technology solutions are also being explored to improve transparency and access to information relevant to patentability that will help to promote higher quality.

To determine how patent quality could be strengthened, Industry Canada and CIPO have launched a study of the determinants of patent quality and the implication of patent quality on market certainty. This project will explore a wide variety of indicators to gain insight into the available data and what it may say about patent quality in Canada. CIPO will also continue to explore avenues to improve patent quality.

ii) Disclosure

Disclosing an invention in exchange for the exclusive right to the invention is an essential element of the patent system. Disclosure of inventions is important because it facilitates follow-on innovation. By informing other researchers and innovators of a new invention, disclosure allows them to make better use of their resources and guide their research towards unpatented areas or improvements to existing technologies. 

In support of disclosure of inventions, CIPO is taking a number of actions. It is making information technology systems more modern and responsive so that users can find information more easily and quickly. To better serve business innovation, CIPO is collaborating with other intellectual property offices in the development of a centralized work sharing platform and virtual environment where innovators would have a secure one-stop access to their patent family applications. CIPO is also participating in US-led plurilateral efforts to improve the sufficiency of patent disclosure and dissemination of patent information.

iii) Enforcement

The costs and time of asserting, defending, or opposing a patent can be considerable. The Government recognizes that the efficiency of Canada’s system for resolving patent disputes plays a key role in the innovation system. A system that permits users to resolve their disputes more efficiently leads to lower costs for innovators and greater marketplace certainty. It creates an environment where more patent rights are exploited for economic gain or users of patented technologies can gain access at a lower cost in cases where patents are deemed invalid by the courts.

The Federal Court of Canada (FCC) serves as the main litigation forum for IP cases in Canada. In 2009, the FCC issued practice guidelines to encourage co-operation between litigants and their counsel, and effective use of the Federal Courts Rules, particularly those concerning case management, to encourage hearing cases within two years.  The FCC rules were amended in 2010 to encourage experts to be more objective and allow the court to be more efficient when dealing with expert evidence.  Together, these changes are intended to improve IP case resolution times. The Government of Canada will also look into other mechanisms to resolve disputes or lower litigation costs for SMEs. An example of such a mechanism is a post-grant opposition procedure whereby an interested party can challenge the validity or the claims of a granted patent at CIPO without resorting to the courts.

Recommendation B-3 (p.51):

“That the Government of Canada should only consider expanding patentability to new subject matter when there is clear and demonstrable evidence of benefit to Canadians and competition.”

Response:

The Government agrees the patent system should benefit Canadians and competition. In Canada, each patent application is examined on its own merits against the standards of patentability (i.e., new, non-obvious and useful; not a mere scientific principle or abstract theorem). Patentable subject matter is determined through a combination of the law (the Patent Actand Patent Rules)and the courts’ decisions (jurisprudence).

It is broadly recognized that the granting of business methods and software patents has been controversial worldwide. In general, software does not meet the standards of patentability as it consists largely of source code and is fairly abstract making it more difficult to ascribe boundaries to a patentable invention. However, a number of countries have granted many software patents which have led several stakeholders to argue that software patents reduce market certainty and have led to increased levels of litigation. For this reason, certain countries like the United States, Japan and Australia have moved to become more restrictive with respect to allowing software and business method patents. The presence of questionable software and business method patents in the United States and patent assertion entities, or patent “trolls”, who exploit them to extract licensing revenues, have exposed Canadian businesses operating in the United States to additional risks and costs.

In Canada, there is no statutory or jurisprudential exclusion that states that business methods or software are not patentable. However, the courts have provided some additional clarity by indicating that an invention can not be disembodied (i.e.: stand alone software code) and must have a practical effect.  As a result of this approach, Canada has not experienced the rise of patent assertion entities and patent litigation observed in other countries.

The raison-d’être of the patent system is to encourage invention, creativity, and research and development. In that context, there are many areas where new subject matter might eventually be considered or clearly excluded in the definition of patentable subject matter as new innovations are developed.

Recommendation E-1 (p.53):

“That the Government of Canada ensure the pharmaceutical IP regime strikes a balance between encouraging investments in the development of new innovative drugs while ensuring Canadians have access to affordable pharmaceuticals.”

Response:

The Government agrees that Canada’s IP regime must continue to both promote the development of innovative drugs and provide access for Canadians to affordable drugs. This balance is evident in the healthy presence in Canada of both brand-name pharmaceutical companies that undertake R&D to develop new or improved patented therapies and generic drug companies that develop generic versions of innovative drugs once patents expire or are invalidated.

The Government of Canada seeks to balance patent protection for innovative drugs with the timely market entry of lower priced generics. To this end, the “early working exception” from patent infringement allows a generic drug company to use brand name competitors’ patents to seek Health Canada drug approval prior to patent expiry.  In addition, the Patented Medicines (Notice of Compliance) Regulations(patent linkage) ensure that generics do not abuse the early working exception by bringing to market drugs which are effectively still under patent protection.  These two provisions help to ensure that Canada’s IP regime promotes innovation while ensuring Canadians have access to affordable drugs.

Going forward, the Government will ensure the patent regime continues to support a vibrant pharmaceutical industry, allows for timely access to new and innovative drugs, while also allowing for the timely entry of lower-priced generic drugs.

Recommendations D-2 (p.52) and D-6 (p.52):

“That the Government of Canada review international best practices in the area of prohibited marks to determine whether modifications to the Trade-marks Act are necessary.”

“That the Government of Canada introduce legislation which amends parts of the Trade-marks Act dealing with official marks to restrict the scope of official marks to important national government symbols and to narrow the definition of public authorities to avoid stifling innovation and distorting markets.”

Response:

Section 9 of the Trade-marks Actcontains provisions on prohibited marks, including official marks. This regime was put in place to protect certain marks that are representative of well-known and respected national symbols and emblems. Examples of prohibited marks include the Royal Arms, the Red Cross, and the letters “RCMP”. No person can adopt or use a prohibited mark in connection with a business, as a trademark or otherwise. The prohibition extends to marks that are likely to be mistaken for a prohibited mark.

Most countries protect lists or schedules of prohibited marks and require that new marks go through a Parliamentary process with legislative scrutiny. In Canada, however, once an entity qualifies as a public authority, that entity need only give public notice of the adoption and use of its official mark for protection under Section 9 to begin. Public authorities are entities whose activities benefit the public, and that are under supervision of a Canadian government. Examples of public authorities include: airports, charities and government departments or agencies.

Observers have pointed out that in some cases official marks are interfering with the regular conduct of business. Many academics, lawyers and judges have been critical of the official marks regime, citing that official marks have no limit on the duration and scope of protection, and that the process to remove protection is cumbersome. Conversely, some public authorities deem that official marks are an efficient, effective and inexpensive way to obtain adequate protection for particular marks. The Government is open to hearing more views of stakeholders on this issue to ensure the official marks regime remains in the public interest.

The Government will review the current issues around official marks and will consult with provinces, territories and stakeholders on possible changes to the official marks regime in order to remove barriers faced by Canadian companies seeking trademark registration.

2 - Business Use of IP

Recommendations A-2 (p.50), A-5 (p.50), B-4 (p.51), B-1 (p.51):

“That the Government of Canada (and, specifically, the Canadian Intellectual Property Office) actively engage with Canadian businesses to raise awareness of IP rights and provide greater support to business seeking to protect their IP.”

“That the Government of Canada take steps to increase the awareness of the importance of IP among researchers and SMEs and develop training programs that help enhance the strategic management of IP assets.”

“That the Government of Canada explore options to simplify and strengthen support including education for the filing of patents for small businesses.”

“That the Government of Canada study the barriers, in terms of cost and time, for SMEs to register, affirm or defend their IP.”

Response:

Engaging Canadians and Strengthening Support

The Government agrees that Canadian businesses should be supported in their efforts to derive the maximum benefit from their inventions and intellectual property.  That is why in the last year, CIPO held a total of 44 roundtable discussions that engaged more than 200 small- and medium-sized enterprises (SMEs) to better understand their requirements around IP.  During these roundtable discussions, SMEs signalled their need for additional assistance, including more easily accessible information throughout the IP-seeking process; greater communication between CIPO and IP applicants; guidelines on how to select an IP agent; and advice on how to develop a strong IP strategy and how to search IP databases.

In light of this feedback, a number of CIPO’s services have been re-designed to be made more effective at assisting business to meet their strategic objectives.  In particular, web renewal is a key priority, as are more effective web-based service delivery mechanisms. Also, the planned adoption of social media mechanisms will both modernize and improve two-way communications with businesses seeking to protect their IP.  CIPO is continuing this roundtable process in 2013 as an effective way to understand innovators needs, their expectations and the barriers they face in effectively using and leveraging IP to support their business goals.

Raising awareness

The Government agrees that improving awareness of the importance of IP among Canadian SMEs will lead to greater strategic use of this valuable asset. The Government of Canada has a number of initiatives in this regard which are being well received.  In collaboration with the Intellectual Property Institute of Canada (IPIC), CIPO has organized a number of presentations for Canadian businesses on how to better utilize IP as a strategic business instrument. CIPO has contributed to “IP Case Studies” developed as a teaching tool for post-secondary institutions across Canada. The IP Case Studies aim to give future innovators baseline knowledge of IP so that once they are employed or start a business themselves they can use IP for the competitive advantage of their business. The IP Case Studies are also valuable tools for university start-up firms and academic inventors who may be seeking to collaborate with industry or licence their IP to industry.  The Government of Canada has a significant number of programs that seek to increase university-industry collaboration. A strong foundation in IP can assist university innovators to consider such collaborations.

The Government of Canada will continue to promote IP awareness by building on these tools and by exploring new approaches to increase knowledge among business about the strategic importance of IP to assist them in better exploiting this critical asset. This will include targeting those Canadian businesses which currently do not use the IP system so that they understand the advantages of leveraging IP in the innovation cycle, in the collaborative R&D process, and in the commercialization process.

Training and education

The Government agrees training is important to foster greater economic use of IP on the part of Canadian SMEs. In this regard, the National Research Council (NRC) Industrial Research Assistance Program’s (NRC-IRAP) technology and Industrial Technology Advisors (ITAs) are present in communities across Canada, providing a wide range of advisory services and appropriate funding to innovative small- and medium-sized enterprises (SMEs). As part of NRC-IRAP’s services, firms may receive general information and guidance related to their IP requirements.  In addition, through Contributions to Organizations, NRC-IRAP initiates advisory activities and workshops for SMEs on specific IP topics.

To supplement these services, NRC-IRAP also funded the release of the trademarked booklet “Canadian Intellectual Property Law for Dummies” that was distributed to clients needing initial knowledge in IP.   In some cases, NRC-IRAP has provided funding to firms that need some initial support in the area of IP for their innovation projects. To support the global reach of Canadian companies, CIPO and the Department of Foreign Affairs and International Trade have helped to develop and deliver courses on IP for Trade Commissioners posted abroad. These courses on key IP concepts, rules and strategies help Trade Commissioners better assist Canadian companies on IP issues in foreign markets.

Reducing Barriers

The Government agrees that the cost and time for SMEs to register and affirm or defend their IP should not be a barrier.  In response, CIPO is implementing new performance improvement plans which are specifically aimed at reducing CIPO’s inventory and turn around times throughout the patent prosecution process, the trademark and industrial design process as well as within the Patent Appeal Board and the Trade-mark Opposition Board.  These efforts to reduce delays will help bring Canada more in line with the performance of our trading partners.  Over the course of 2013-14, the Government of Canada will also examine ways in which to reduce regulatory and procedural burden in the IP system and to further streamline and clarify CIPO’s administrative framework and procedures.

Recommendation B-6 (p.51):

“That the Government of Canada review the geographical distribution of registered patent agents across Canada.”

Response:

The Government agrees that Canadian innovators in rural areas need to have access to the patent system. The Government also recognizes that the market dictates business decisions of IP agents regarding where to offer their services. While CIPO is responsible for registering IP agents and maintains an IP agent register, IP agents are private entities, and as such operate independently of the Government of Canada in serving their clients’ needs. Connectivity, the Internet, and innovative solutions are greatly helping in reducing geographical barriers in accessing services such as those offered by patent agents.

Recommendation A-4 (p.50):

“That the Government of Canada further study means to grow innovative Canadian companies to keep valuable intellectual property in Canada and close the productivity gap with our competitors.”

Response:

The Government agrees that innovative, growth-oriented Canadian businesses are vital to Canada’s prosperity. Innovative Canadian firms that successfully develop and commercialize their new technologies and products and services globally contribute to improving Canadian productivity and the economic wellbeing of Canadians. One particular challenge in this regard which the Committee highlighted in its report is for businesses to finance their operations from the invention stage through to commercialization.  The protection of their IP is a key step for firms in this regard as it facilitates partnerships with external organizations and attracts venture capital.

The Government is aware of this challenge and has recently introduced a number of targeted measures to help innovative Canadian firms overcome barriers to commercialization and become globally competitive. Economic Action Plan 2012 doubled the National Research Council’s Industrial Research Assistance Program to provide direct assistance to business, expand service offerings, and help deliver a concierge service for innovation support, government-wide and beyond. The Government recently announced the $400 million Venture Capital Action Plan to improve access to venture capital financing for high-growth companies in order to encourage their growth and help them expand globally. Economic Action Plan 2013 provides $60 million to help outstanding and high-potential incubator and accelerator organizations in Canada expand their services to entrepreneurs, and commits to make available a further $100 million through the Business Development Bank of Canada for investments in high-quality firms graduating from business accelerators. These measures will help Canadian innovative firms that develop IP to grow and become globally successful.

Furthermore, the Government has asked the Council of Canadian Academies to study the state of industrial R&D in Canada.  The Council will examine existing and emerging areas of R&D strength across sectors and how these trends compare globally. The Council is expected to publish a report in 2013. The Government will take this report into account in further supporting the growth of innovative Canadian firms.

Recommendation E-2 (p.53):

“That the Government of Canada undertake an independent, evidence-based review of challenges facing the brand-named pharmaceutical sector in Canada to determine the most appropriate solutions and steps to be taken.”

Response:

The pharmaceutical industry business model is evolving in Canada. More research is now taking place in small, university-collaborating firms, working on biopharmaceutical therapies and genomics for example. The Government of Canada supports this industry-academic business model through the Networks of Centres of Excellence, Canadian Institutes of Health Research, and Centres of Excellence for Commercialization of Research. These globally recognized organizations feed ideas and innovations into the pharmaceutical pipeline and support the commercialization of innovation and the growth of Canadian-based firms.

The Government of Canada, through internal analysis and engagement with outside experts, has identified the trends, opportunities and challenges facing this sector. The Government of Canada also works with Canada’s pharmaceutical sector to promote Canada as the location of choice for investment and jobs.  To this end, the Government is consistently engaging sector leaders to understand their business challenges and to work with them to promote Canada as an investment destination of choice.  For example, in 2012 the Minister of Industry held a series of roundtables to hear from business leaders in Canada from across the life-sciences sector to gather evidence on their growth strategies and their business challenges.  The Minister of Industry and the Minister of State for Science and Technology also attended the 2013 BIO International Convention in Chicago along with members of Canada's delegation of biotechnology and pharmaceutical executives. Participation at BIO enabled Ministers to meet with key multinationals to promote Canada as a premier place to invest.

Engagement with the pharmaceutical sector will remain a key priority for the Government.

3 – Private-Public Collaboration

Recommendation A-6 (p.50):

“That the Government of Canada develop consistent IP policies for the Canadian aerospace industry across all government departments and streamline the restrictions on how IP can be used; make policies in programs such as SADI more flexible with respect to foreign collaboration; and, strengthen aircraft procurement policies by negotiating IP rights when purchasing foreign aircraft.”

Response:

The Strategic Aerospace and Defence Initiative (SADI) supports Canadian companies performing research and development in the aerospace, defence, space and security fields.   The program seeks a balance between the need to secure benefits to Canada and the need for companies to have the flexibility to locate parts of their operation outside of Canada in order to benefit from global supply chains and be competitive.  The recipient must undertake the vast majority of the research and development in Canada and contractually commit to retain high-skilled and high-value production related activities in Canada over the longer term. Intellectual property is owned by the recipient and/or its Canadian based partners on terms that enable it to deliver on its benefit to Canada commitments.

Although IP policies can differ across Government of Canada programs, it should be recalled that the programs are supporting work at different points on the innovation continuum.  As such, the treatment of IP and other aspects of a project vary.  These differences are not inconsistencies, but important and necessary adaptations to support the Government of Canada’s goals and the needs of the recipients as they move from basic research to technology demonstration and on to pre-commercial development.  A central Government of Canada objective is ensuring that public expenditures benefit Canadians, which justifies imposing some limits on how and where IP is used (e.g., to ensure that follow-on work to a project occurs in Canada). 

The recommendation to strengthen aircraft procurement policies by negotiating IP rights when purchasing foreign aircraft invites consideration of the balance that must occur among Government of Canada department objectives (e.g., those of the Department of National Defence, the Coast Guard, Public Works and Government Services Canada and Industry Canada).  Key considerations include operational needs, cost, and industrial benefits for Canadians.  Purchasing IP can be expected to increase purchase costs and yet also to increase the potential for long-term industrial benefits (e.g., for in-service support for the aircraft by Canadian companies), requiring careful consideration on a case-by-case basis.

Recommendation C-1 (p.51):

“That the Government of Canada encourage universities to work together to develop template agreements by sector that could provide greater certainty for businesses entering into partnerships with university researchers. Government laboratories should work to develop similar template agreements.”

Response:

The Government agrees with the Committee’s finding that effective IP management practices are a key component of successful academic-business collaboration.

Many post-secondary institutions are working to better tailor IP agreements to the needs of different sectors to ensure that the research, ideas and knowledge generated by faculty, students, and graduates are more easily accessible to businesses.   National associations including the Alliance for Commercialization of Canadian Technologies (ACCT) and the Association of University Technology Managers (AUTM) have developed standardized IP templates and other tools to enhance the practice of knowledge transfer for the benefit of Canada.  The use of these templates can help to streamline the negotiation process so that collaborative research activities between post-secondary institutions and businesses are more effective.

The Government of Canada recognizes that even more could be done to simplify the transfer, management and commercialization of academic research and provide greater certainty to business partners.  We will actively encourage universities and colleges to work collaboratively on common tools and best practices to address the many complexities at the interface of academic research and industry. 

Canada does not currently have a single policy governing the ownership of IP generated at post-secondary institutions. The provinces have jurisdiction to determine the IP policies of post-secondary institutions, which may be university-owned, inventor-owned or jointly owned by the university and the inventor. The majority of provinces defer to the institution’s policy, and institutional policies are generally embedded in collective agreements.

The Government of Canada’s current approach to management of intellectual property generated in government laboratories emphasizes flexibility, and many departments and agencies have developed standardized templates, tailored to their specific situations.


4 – Enforcing Property Rights Protection

Recommendations D-1 (p.52), D-4 (p.52), D-5 (p.52):

“That the Government of Canada strengthen IP rights protection by introducing legislative measures to better combat counterfeiting and piracy at the border, including: Providing appropriate ex-officio powers to customs officials; Introducing civil and criminal remedies for trademark counterfeiting; Allowing customs officials to share information with rights holders regarding suspected goods.”

“That the Government of Canada ensure that appropriate authority be vested in the RCMP and border officials to do their work, while ensuring respect for civil liberties and due process. This may need to include compensation in cases where seizure of goods was not warranted.”

“That the Government of Canada ensure that criminal remedies be available where trade mark counterfeiting or copyright piracy are both wilful and on a commercial scale. However, consumers themselves are often unable to distinguish between legitimate and counterfeit products, and as a result excessive fines for individual consumers acting non-wilfully are inappropriate.”

Response:

The Government has introduced Bill C-56¸ the Combating Counterfeit Products Act, which targets the commercial movement of counterfeit and pirated goods domestically and at the border.  The Bill continues to receive strong support from business stakeholders. To name just a few, the Canadian Chamber of Commerce, the Canadian Council of Chief Executives, the Retail Council of Canada, and the Canadian Manufacturers and Exporters all expressed support for the Bill.

This Bill proposes amendments to the Trade-marks Actand the Copyright Actto better combat counterfeiting and piracy. If passed, it will allow rights holders to file a Request for Assistance with the Canada Border Services Agency (CBSA) to assist border service officers with product identification. To further support the civil enforcement process, the Bill will also provide customs officers with “ex officio” authority to temporarily detain suspected commercial counterfeit and pirated goods on their own initiative. Once suspected goods are detained, customs officials will have the authority to share limited information with rights holders who will decide whether to initiate a civil action. Final determination on whether the suspected goods are counterfeit or pirated will be made by the courts.

The Bill will also expand the civil causes of action available to registered trademark owners to cover manufacturing, causing to manufacture, possessing, importing, and exporting or attempting to export counterfeit goods and labels for the purpose of sale or distribution. Currently, registered trademark owners must wait until counterfeit goods reach the market before they can initiate a civil action. For copyright owners, a new civil cause of action for exporting pirated goods will be added to the Copyright Act.

Bill C-56 would also provide the necessary authorities for the RCMP and customs officials to effectively identify counterfeit and pirated goods. The Bill would make it a criminal offence to knowingly sell, manufacture, cause to manufacture, import, export, attempt to export, and possess for the purpose of sale or distribution counterfeit goods and labels on a commercial scale. It also adds the acts of exporting, attempting to export and possessing for sale or rental of pirated goods to the current criminal offences in the Copyright Act.  These offences target commercial activity but do not apply to individuals who acquire or use counterfeit or pirated goods for their personal use.

Furthermore, the Bill includes a number of safeguards, including the ability for importers to be compensated for their losses resulting from the detention in cases in which the detained goods were found not to be counterfeit or pirated by the courts.

Recommendation D-3 (p.53)

“That the Government of Canada include consumer groups in addition to industry groups in education and coordination efforts to combat piracy and counterfeit.”

Response:

The Government agrees with this recommendation. Consumer groups will be invited to join the existing IP Crime Working Group coordinated by the Canadian Anti-Counterfeiting Network (CACN) and the RCMP. This Working Group was formed jointly by the RCMP, Canada Border Services Agency (CBSA) and CACN as a platform for private sector and federal departments to work together in support of IP enforcement.  The Working Group meets approximately three times per year to advance various initiatives and strategies to combat IP crime such as domestic and border enforcement activities, collecting metrics to gauge the extent of IP crime in Canada, training sessions, public awareness initiatives, standard operating procedures, and identifying information gaps and successes.

The IP Crime Working Group is currently comprised of federal departments and agencies (RCMP, CBSA, Industry Canada, Health Canada and the Department of Justice) and private sector representatives (CACN, Canadian Chamber of Commerce, Canadian Bar Association, Canadian Recording Industry Association and the IP Institute of Canada). Having consumer groups participate in the Working Group will contribute to a more balanced approach to combating counterfeiting and piracy.

Next Steps

In conclusion, the Government has committed through this Response to undertake the following actions:

  • Consult stakeholders on changes to the trademarks regime that may be required to position Canada to be consistent with the Madrid Protocol and Singapore Treaty;
  • Consult stakeholders on changes to the patent regime that may be required to position Canada to be consistent with the Patent Law Treaty and to address concerns over inadvertent abandonment of patent rights;
  • Consult stakeholders on the benefits and changes that may be required to the industrial design regime to position Canada to be consistent with the Hague Agreement on international deposit of designs;
  • Look into legislative and regulatory changes required to reduce the time it takes to grant patents and trademarks while preserving high quality;
  • Consult on the merits and means of protecting confidential communications between IP owners and their Canadian IP agents; and
  • Review current issues around official marks and consult with provinces, territories and stakeholders on possible changes to the official marks regime.
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