This is a follow-up post to The Best Kept Secret in Business: Your Company’s IP. Read part one here.
In the second half of Innovation Economy Council’s (IEC) June 3rd IP presentation, a panel discussion focused on the loss of Canadian IP to foreign takeovers. When Barrie McKenna, the author of the second IEC report Ideas for Sale: Why IP is a Symptom, Not a Cause, of Canada’s Failure to Scale, looked at four companies and how they handled mergers and acquisitions, he found three quarters of their patents wound up in foreign hands.
“The world wants what we have. Our companies we are creating are very attractive to foreign buyers. Our problem is we don’t have enough Canadian buyers interested in our own technology,” said McKenna.
The author stressed the importance of Canadians not being too open, but also realizing partnering with an international business may be the key to helping them grow. “Putting too many controls on IP and who you can sell it to is likely to prevent commercialization,” added McKenna.
In the global marketplace, Canadian companies are having a moment of unprecedented interest says Krista Jones is the VP of Momentum at MaRS. She adds Canada is known for scientists and engineers and being impactful in benefiting the world. Jones says this is great, but the fact the only buyers are foreign is what concerns her. She would like to see a mindshift to close the loop when it comes to Canadian IP developed on our home soil.
“We need more companies acquiring companies as they grow to start to reverse the tide of where IP ends up at the end of the commercialization journey.”
George Tsintzouras, CEO and co-founder of Alert Labs an analytics company says their parent company is American yet he is happy they remained in the Waterloo region where they continue to employ Canadians.
“The access we got helped enable our fast growth. When we first met with the new owners they provided us incredible access we wouldn’t have had if we tried to go it alone in Canada. Being part of an American company opened up huge markets and opportunities for us,” said Tsintzouras.
Frank Rudzicz is the director of Artificial Intelligence with Surgical Safety Technologies and says two areas of IP they don’t patent are data and people. “We see a lot of talented people coming to Canada from elsewhere. Non-Canadian takeovers are not a concern as long as the data stays in Canada,” said Rudicz.
He thinks the ability for companies to connect with universities and augment the local culture will create an ecosystem that grows roots. “A thriving ecosystem is the main key. It’s important to recruit new brains and retain the ones you have,” said Rudicz.
No matter what stage your business is in, it’s always great to think about the long-term ramifications of IP when you open up your company to global interests. There are lots of resources out there for companies wanting to keep their Canadian roots and stay competitive.