Setting a path forward

It is our view that in order to best move the province of Ontario’s prosperity agenda forward, it is essential that the Government of Ontario adopt a “Made-in-Ontario” approach to innovation that focuses on generating intangible stock assets that can be commercialized to the benefit of Ontario’s economy. Key activities for consideration should be education, IP generation and licensing/transfer, developing receptors for publicly-funded research and addressing regional differences related to language and access to expertise.

Capacity-building: IP literacy

Sophisticated IP knowledge is a fundamental requirement for both innovators and support intermediaries.. Strong IP literacy skills are essential to ensuring that the ecosystem is adept at capitalizing on the economic potential of generating and commercializing valuable IP. These IP literacy skills include both foundational knowledge about the various forms of IP but also about how IP can be used strategically for gaining commercial advantage and economic benefits.

There was wide recognition that sophisticated IP literacy is lacking across the ecosystem and we heard no feedback suggesting that existing IP education initiatives have sufficiently addressed the IP knowledge deficit. Generally, these activities consist of voluntary IP workshops delivered by IP legal experts. Some of the support intermediaries consulted reported that they also offer specific IP training for their staff. This training is often deemed to be inaccessible, too technical and inadequate for boosting IP literacy levels across the ecosystem. The overwhelming consensus among those surveyed was that they, and the innovators they engage with, would benefit from a comprehensive ongoing IP education program to enhance their IP literacy skills.

The suggested curriculum would be designed to achieve two goals:

1) To increase the IP sophistication of innovators and support intermediaries to facilitate informed strategic decision-making around IP generation and commercialization, including increasing capacity to work with IPexperts.

2) To provide innovators and support intermediaries with the requisite skills to know how, when, and where to seek IP legal expertise.

The essential learning outcomes of an IP education program should, at minimum, ensure that participants are able to:

• Grasp each key form of IP (industrial design patents, utility patents, trademarks, copyright, trade secrets, plant varieties and contracts.)
• Identify and seize IP commercialization opportunities as they arise.
• Identify key IP legal issues and prioritize follow-up with relevant experts.
• Understand issues around public disclosure of inventions and global considerations (for example, differences between grace periods, non-disclosure agreements.)
• Understand strategic issues around freedom-to-operate.
• Know when to seek expert legal advice, from which experts and how to take charge of engagements with the relevant IP legal experts.
• Develop a basic IP strategy.
• Negotiate IP agreements with third parties from a position of strength.
• Recognize potential conflict of interest issues and know how to resolve them.

Capacity-building: Centralized provincial resources

We consistently heard that Ontario institutions that receive public funds and support entrepreneurial activities activities possess limited capacity to assist ventures to scale and commercialize. This gap is perpetuated in part by the absence of “in-house” expertise, such as IP lawyers or patent agents.  Recognizing the high costs associated with IP generation, strategy, protection and management, including multi-jurisdictional patent filing, without the necessary prioritization that comes with this expertise, funding this level of capacity rarely materializes as a budget priority which compromises a firm’s potential to scale globally.

We also heard from smaller-sized support intermediaries that not only was there a gap in “in-house” expertise, but access to “outside” expertise, such as IP lawyers or patent agents, was limited in smaller regions, creating polarity within the system. In larger centers where resources are more accessible, they are not sufficiently leveraged across the entire ecosystem.

Most, if not all institutions surveyed, have different industry and technical specializations. Across Ontario, there are gaps where ventures in an industry cannot receive assistance within their community. As such, many ventures go without assistance. In addition to regional disparity, Francophone and Indigenous ventures encounter further language and cultural barriers.

What we heard from participants in the in-person consultations was the need for a coordinated strategy for IP generation, protection and management for research and innovation supported with public funds. More specifically, the key service gaps that would be addressed through a collective provincial resource that would provide the following services:

• IPstrategy and expert advice
• Prior art and IP intelligence
• IP rights generation
• Patent access and freedom-to-operate (FTO)
• IP education

This resource could provide multiple services accessible to institutions across Ontario for: IP licensing offices, early-stage ventures, and more established Ontario SMEs, allowing them to operate effectively in an increasingly competitive, IP-intensive global marketplace.

Accountability

Ontario’s innovation ecosystem is comprised of upstream knowledge generation activities and downstream commercialization drivers. Between them lie a series of support intermediaries who have been established to help the commercial actors, most notably start-ups and SMEs, to grow and scale up. In an intangible economy, the key to their growth is the ability to view, access and transact with the knowledge that is created in Ontario’s postsecondary institutions.

RICs and other sector-specific entities established to function in support roles have a valuable role to play in the translation of knowledge into economic outcomes that support Ontario’s competitiveness in the knowledge-based economy. Only half of the 18 RICs surveyed as part of this work noted that their mandates include a focus on IP. Ensuring that these organizations are structured and managed to effectively play this role, and to do so in a manner that evolves alongside the needs of the firms they support, should be an important priority for the government that funds them.

Without a clear mandate to focus on the commercialization of intellectual property, stakeholders in Ontario’s innovation ecosystem have treated IP generation and commercialization as a peripheral activity rather than a systemic core driver for business growth. Consequently, Ontarians have not reaped the dividends from local knowledge generation that could and should have been expected.

In addition, what we heard in the in-person consultations were concerns related to the absence of accountability mechanisms (data collection practices, metrics, and overall performance measurement) employed to reflect and report on support intermediary activities and outcomes. Additionally, impacts are inconsistently applied and often tracked only at the organizational rather than system level.

Acknowledging that the structure of the economy and of the drivers of growth have evolved since Ontario’s initial investments in the creation of RICs and other support intermediaries, the time is now opportune to develop and implement a standardized approach to board and management governance for all entities that receive public funds.

This approach should be consistent with the principles articulated in existing directives that set out statements of purpose, principles, mandatory requirements and responsibilities that Ontario ministries and receiving entities must follow in conducting their business, such as accountability, value for money, and a focus on outcomes. This as well as standardize and formalize a system-wide approach to data collection and performance measurement. The efforts toward the implementation of a standardized governance and performance framework must consider the different needs, asset bases and industrial activities of local ecosystems. Not all RICs should provide the same services if the needs of their local and regional clients differ. These roles and the composition of Ontario’s innovation ecosystem need to be evaluated in order to determine the right combination of locally available as opposed to regional or centralized services.

Structure

Ontario’s publicly funded researchers do important work which generates valuable new knowledge that has broad applications across a variety of sectors. Some of the new knowledge generated from this research holds the potential to generate valuable intellectual property that can accrue economic benefits. How to facilitate an ecosystem that capitalizes on this economic potential is central to our work, however, decisions and policies regarding what research to fund as well as how to perform this research are not part of our mandate.

The provincial institutions that house researchers often create an entity, usually known as a technology transfer office, that uses new knowledge to generate intellectual property and then help facilitate the commercialization of this intellectual property. Generally, this takes the form of a transfer of knowledge to a technology transfer office with a mandate to commercialize it. These technology transfer offices created within Ontario research organizations come with considerable diversity in name, size, funding, specialization, resources, etc.

Managing such a commercializing function has unique challenges for organizations that perform basic research which by its nature is far upstream of any commercialization potential. Intellectual property strategies are inherently more speculative than applied research and come with the added expense of needing to regularly file patent continuations as additional knowledge is generated from the earlier research. Original commercializing assumptions and strategies need to be revisited as the research unfolds over the years. In order to realize this objective, specialized expertise is required but is not always intrinsic to the structure of the institution.

This challenge is compounded by the reality that both the passion of research teams and the core mission of the institutions they work within are much more oriented to the pursuit of new knowledge than to the development of future commercial potential. (Additional research on TTOs is available in Appendix F.)

Throughout the engagement strategy, we heard consistent feedback from TTOs representatives from across Ontario that there was a need to address various gaps in expertise and resources in order to create winning conditions for their organizations, and the researchers they support. While this recommendation for structure focuses on mandates, expertise and gaps therein, without access to the resources and services suggested in the capacity-building recommendation, addressing the gaps inhibiting commercialization outcomes could be challenging.