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Canadian Companies Seek to Protect IP at Home, Abroad
19 October 2012
Canadian companies overwhelmingly consider protecting their intellectual property assets to be a top priority, according to the results of a survey undertaken by Canadian law firm Fasken Martineau.
The firm reports that nearly 80% of respondents consider IP to be a key or top priority, while only 6% consider IP to be a low priority.
“Our survey respondents also have a clear, and remarkably uniform, view of the role that IP plays within their organizations,” the study’s authors John Beardwood and Mark Penner reported. “Two-thirds of the respondents surveyed reported that IP plays a significant role in generating revenue for their company (for example, through licensing). A majority of respondents also indicated that IP ‘distinguishes’ their company in the marketplace (60%) and ‘creates barriers for competitors’ (56%).”
The survey showed that IP protection in countries other than Canada is “clearly important for the Canadian companies surveyed,” as two-thirds of the respondents report that they sell products or make their services available outside Canada.
“Of those respondents that do sell products or offer services outside of Canada, 69% indicated that they have sought IP protection outside of Canada,” Beardwood and Penner wrote. “The overwhelming majority (91%) of the respondents who sought protection outside of Canada indicated they had sought to protect their IP rights within the United States. However, other jurisdictions appear to also be key, including Europe (73%), the United Kingdom (55%), Japan (50%), India (36%) and China (32%). This not only reflects the growing role that these countries are playing within an ever increasing global market, but – in the case of India and China – may also reflect a perception that IP protection in these jurisdictions is becoming more effective, such that it justifies companies making the effort to obtain such protection.
More than seven in 10 of (71%) of respondents polled indicated that they have a formal policy governing IP issues, such as disclosure of inventions and employee development. “While a majority of respondents appear to take the protection and ownership of IP rights very seriously, that still means that almost one third have not implemented any formal IP policies,” Beardwood and Penner wrote. “This is a significant gap for two reasons.
First, the absence of such policies increases the probability of there being disputes regarding IP ownership in the future. Second, in our experience, one of the first pieces of data an investor will evaluate in assessing the status of a target’s IP portfolio (after reviewing the existence of actual IP registrations) is the existence of and degree of compliance with such a policy. Given that 62% of the respondents indicated that one of the key roles of IP within the business was to ‘increase the company’s valuation,’ the failure to have an IP policy is problematic. Indeed, over two-thirds (69%) of the respondents agreed that their company's ‘IP strategy requires improvement.’”
While the vast majority of companies surveyed (more than 67%) indicated they sell products or make services available outside of Canada, slightly more than one quarter of the respondents had taken no steps to identify third-party IP rights in applicable foreign jurisdictions. “This level of risk mitigation does not correlate well with the global scope of the activities of many of the respondents,” the authors note.
