Canadian International Council

Canadian International Council

October 03, 2011 07:00 ET

New Report Commissioned by the CIC Calls for Canada to Harness its Intellectual Property Resources

TORONTO, ONTARIO--(Marketwire - Oct. 3, 2011) - A new report released today by the Canadian International Council (CIC), Rights and Rents: Why Canada Must Harness its Intellectual Property Resources, argues that Canada is paying a steep price for its short-sighted approach to intellectual property (IP).

Research conducted on behalf of the CIC shows that international buyers are targeting Canada's IP-rich start-ups. 58% of new Canadian firms were taken over by foreign investors from 2006-10, yet these acquisitions siphoned off more than 66% of the IP developed by such firms (much of that IP subsidized by taxpayers).

While the strategic sale of start-ups is a popular strategy among investors, Canadian firms must seek more effective ways of leveraging their intellectual property to foster growth—creating jobs and anchoring more of these long-term assets within Canada.

"While Canada has devoted considerable attention to such issues as competitiveness, productivity and innovation, the role of IP in a national innovation strategy has yet to receive similar scrutiny," according to Jennifer Jeffs, President of the CIC. The report identifies and addresses a gap in Canada's innovation strategy by analyzing complex issues facing Canadian companies. These include global patent wars and the challenges of technology transfer—notably the conversion of inventions on university campuses into products that can be commercialized by industry.

Canada's IP policies and practices are affecting its economy. While other competitors bring in billions of dollars by selling or leasing their IP, Canada runs a significant technology deficit—more than $4.5 billion U.S. in 2009 (among the largest shortfalls in the industrial world, according to the World Bank). Canada invests heavily in its own R&D, much of which leaks out; then it spends heavily on acquiring technology from outsiders. Canada needs new thinking on innovation—an approach that includes consideration of IP.

Like real estate, IP is either owned or rented. Only possession can guarantee absolute control. Yet Canada is fast becoming a nation of renters of intellectual property.

This trend, if it continues, could have a significant impact on Canada's economic prospects. "The world's ability to grow crops more efficiently under tougher climate and soil circumstances, provide clean water to rich and poor alike, and unlock new renewable energy sources depends on its ability to acquire knowledge and develop increasingly sophisticated technology," says Dr. Jeffs. "This requires strategic management of Canadian intellectual property."

The report strongly urges the Canadian government to integrate a national IP strategy into an overall innovation framework. Among the report's recommendations: Canada should undertake a broad review of its current patent policy; address barriers that hold Canadian companies back; create a central office for intellectual property reporting directly to the prime minister; launch a separate division of the federal court to deal with intellectual property; and open regionally-focused technology transfer offices.

The report was authored by Karen Mazurkewich, former Wall Street Journal foreign correspondent and business writer.

The report can be downloaded at:

The Canadian International Council (CIC) is an independent, member-based council established to strengthen Canada's role in international affairs. The CIC reflects the ideas and interests of a broad constituency of Canadians who believe that a country's foreign policy is not an esoteric concern of experts but directly affects the lives and prosperity of its citizens. The CIC uses its deep historical roots, its cross-country network and its active research program to advance debate on international issues across academic disciplines, policy areas and economic sectors. The CIC's research program is managed by the national office in Toronto. Its 16 branches across Canada offer CIC members speakers' programs, study groups, conferences and seminars.

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