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POLICY & PRACTICE

The ludicrous idea of a provincial intellectual property framework

A new panel created in the 2019 Ontario budget will have the mundane task of clarifying the relationship between science and innovation.

By CRESO SÁ | MAY 14 2019

As part of the release of the 2019 budget, the government of Ontario announced the creation of a panel to assess the commercialization activities of higher-education institutions. The announcement was awkwardly worded and resembles the output of a random text generator: “The government will create an Expert Panel tasked with delivering an action plan for a provincial intellectual property framework and maximizing commercialization opportunities specifically related to the postsecondary education sector.”

The idea of a “provincial intellectual property framework” is ludicrous as, for the most part, intellectual property law is a federal affair. Together with “maximizing commercialization opportunities,” this is nothing more than a rhetorical flourish to mean the government wants to see more patenting from colleges and universities, as conveyed by Stephanie Rea, the communications director for the Ministry of Training, Colleges and Universities, to the Logic.

To lead the panel, the government appointed Jim Balsillie, the former CEO of Blackberry who recently made headlines with his criticism of the “incubator-accelerator industrial complex.” In short, Mr. Balsillie is an ardent advocate of an interventionist government that protects national tech companies from foreign big bad wolves, while casting this perspective as the wisdom of those “who know how things work” in this harsh, globally competitive world.

This mandate is therefore a terrible starting point for the expert panel because it encumbers the group with the mundane task of clarifying the relationship between science and innovation, and only then proposing workable recommendations. At this point, you might be asking: What is the problem with strengthening “the intellectual property position of Ontario’s postsecondary institutions,” as stated by Ms. Rea? Isn’t intellectual property (IP) key in today’s knowledge economy, driven by intangible assets, thus calling for governments to craft an IP strategy as Mr. Balsillie asserts at every opportunity (e.g. here, here and here)?

The problem lies in

  1. assuming that academic institutions pumping out patents can somehow be a solution to the problem of a weak generation of IP in industry,
  2. that more patenting is better because it will create more value out of public investments in academic research, and
  3. the idea that postsecondary institutions should be getting a “greater return on investment” from licensing income generated from patents. A decade ago my first book explained in detail the problem with all these assumptions, which remain awfully common among Canadian politicians and commentators.

Let’s deal with the first assumption. Without getting into a definitional morass, university research in general tends to address fundamental problems rather than those that lead to specific applications. It is, from the perspective of firms and innovation, “early-stage.” That is, even inventions that are patentable are distant from a commercial product, because the threshold they have to meet for patenting is the lack of a prior similar invention. Hence, for a patent to turn into something that could actually be brought to the marketplace, a firm would need to be interested in further developing it to the point that it becomes commercially viable.

If businesses are not into the habit of doing R&D – as is the case with most Canadian industry – they will lack the knowledge, skills and interest in licensing university IP. And if universities are keen to license their IP, they will find capable companies who are interested, wherever their headquarters might be based. This is as true now as it was in the 1960s, as I have shown in historical research on university patenting, which is the cue for complaints that Canadian-generated IP is “taken away” by foreign companies (both back then and now).

Then there is the question of whether academics should be patenting more to ensure that sizeable public investments in research are not wasted. Here, the record since the 1980s is abundantly clear; the Bayh Dole Act and associated legislation in the United States was predicated on this assumption, assigning IP rights to universities on federally-funded research precisely on those grounds. The evidence on this approach is unambiguous: American universities went overboard on patenting in hopes of striking lucky – coming up with that rare patent that generates significant licensing income. They have consistently pushed the boundaries of what could be patented, have aggressively pursued litigation to enforce their pecuniary interests, and have advocated for greater protection over questionable IP claims.

About 15 years ago, the consequences of this extravaganza were already obvious. Overreach in patenting, including things such as research tools and even fundamental scientific knowledge, threaten both scientific progress and technological innovation as it slows down research. Hence, many experts began calling for a scaling back of aggressive patenting and a greater commitment to open science.

Which brings us to the misguided “return on investment” perspective on generating IP out of academic science. This view rests on the assumption that research should lead to patents that should be licensed, which in turn should generate revenue. This hat trick of faulty assumptions is based on a leap from extraordinary exceptions becoming twisted into expectations, both in terms of science (most of it will not be patentable) and commerce (most patents will not generate revenue). As senseless as it is, this notion is often revived by types who believe that every penny dropped into universities should generate a tangible economic output that is easily measurable in the short term, and by media coverage of the Association of University Technology Managers’ annual licensing survey.

All things considered, we now have another expert panel set up in Canada based on a narrow and self-limiting perspective on the role of higher education in supporting innovation – in this case with the “it’s all about capturing IP” motif. Research has abundantly demonstrated that patenting is just one of myriad ways in which knowledge generated in academia contributes to innovation in the private sector, and that the relative importance of patenting varies dramatically by industry. Hence, the focus on creating an “IP framework” is a failure to see the forest from the trees.

ABOUT CRESO SÁ
Creso Sá
Creso Sá is director of the Centre for the Study of Canadian and International Higher Education (CIHE) at the Ontario Institute for Studies in Education (OISE), University of Toronto, as well as editor of the Canadian Journal of Higher Education.
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