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How can Canada become a world leader in strong intellectual property rights?

The Macdonald-Laurier Institute answered that question in a series of papers released in 2017.

The series, titled Defending our Rights, clearly lays out the first principles for understanding the importance of intellectual property protections, and seeks to support the government’s goal, stated in the 2017 federal budget, of crafting a new intellectual property strategy for Canada.

An exceptional intellectual property strategy will require us to “be bold”

MLIIPPaper-774x427-05-17Lead author Richard Owens urges Ottawa to be bold in protecting the rights of creators and innovators as it follows through on that promise.

The papers examine the importance of strong intellectual property rights, review Canada’s record on intellectual property protection, and seek opportunities to better position Canada to be a world leader on IP rights, rather than a laggard. For the full list of the series's 10 recommendations see below.

An intellectual property strategy for Canada

In the first paper Owens and co-author Michael Robichaud documented the strong evidence that economic benefits and increased innovation are connected to stronger intellectual property protections. Even better, they don’t cost government anything.

In the second paper, the authors examined Canada’s history of IP law and participation in global agreements, and found that an economy like Canada’s is particularly well-suited to an environment of strong IP rights.

In the third paper, Owens provides a strong counter to those who argue for a parochial approach of weaker protections and "user rights", and he asserts that Ottawa will need to adopt a bold strategy to fix a Canadian intellectual property regime that is rife with dysfunction.

Bringing intellectual property thought leaders together

35211866301_e036077d6c_zOn June 15, 2017 the Macdonald-Laurier Institute welcomed Parliamentary Secretary David Lametti and a high-level panel to discuss the state of intellectual property rights in Canada.

The event featured a lineup of influential intellectual property thought leaders and industry professionals, including:

  • Barry Sookman, Senior Partner, McCarthy Tétrault
  • Erin Finlay, Chief Legal Officer, Canadian Media Producers Association
  • Stephen Ezell, Vice President, Global Innovation Policy, at the Information Technology and Innovation Foundation (ITIF)
  • Declan Hamill, Vice-President, Legal and Regulatory Affairs & Policy, Innovative Medicines Canada

Ten big ideas for a world class IP regime

Recommendation 1

The nature of copyright protection is such that there is no justification to limit the term of protection. Copyright protection does nothing to reduce the store of common property. Copyright does not even create a monopoly, and there is no reason it should be singled out from other types of property for expiry. Therefore, our recommendation is to:

End term limits for copyright. Using the rule of reciprocal treatment under Berne, let other citizens of other signatory nations enjoy copyright for the length of the terms, if any, of their own nation. This would be a bold move, consistent with Canada’s treaty obligations and showing leadership in IP. In the more conservative but less desirable alternative, adopt the already widely-used term of 70 years plus the life of the author, gaining Canadian creators the like benefit in European markets.

Recommendation 2

Out of step with all OECD countries and despite the plain wording of Canada’s Patent Act, the SCC ruled that so-called “higher life forms” could not be patented. The life form in question was the oncomouse, a mouse whose DNA had been edited by Harvard College researchers to enhance susceptibility to cancer. Such inventions are entirely worthy of protection. The decision was a blow to Canada’s life sciences industry. Moreover, the reasoning of the decision – that patents over higher life forms were not contemplated by the 19th century legislature that adopted the Patent Act – brings into doubt all future, unknown classes of patent. Accordingly, it is our recommendation to:

Legislate patent protection for higher life forms, reversing the Harvard College decision of the SCC and bringing life sciences patenting in line with the rest of the OECD. In reversing the damage done by the Harvard College decision, there should also be a legislative adoption of interpretative principles for the Patent Act that make it clear that anything under the sun9 (or indeed, elsewhere in the universe) made by man and that meets the standards of the Patent Act, is patentable, subject only to express, legislated exceptions.

Recommendation 3

Small- and medium-sized businesses drive much of Canada’s innovation economy. They tend to be insufficiently grounded in the possibilities of IP to help to grow their businesses. Accordingly, we recommend to:

Facilitate patenting by SMEs, perhaps by reducing or waiving fees for first patents, and further publicize the value of IP protection.

Recommendation 4

Canada is lucky to have agreements to open trade in the Pacific Rim and to Europe, the TPP, and CETA respectively. Still, the IP requirements of these agreements will benefit Canada. Accordingly, it is our recommendation to:

Quickly implement the TPP and complete the implementation of CETA, subject to other signatory nations doing so, and continue to further support freer trade in IPR-protected goods.

Recommendation 5

One of the worries that seems to animate opposition to stronger IP rules in Canada is the existence of trade deficits in IP protected goods. As demonstrated herein, such deficits are actually quite minor and, in any event, mean little. Accordingly, we recommend that:

A trade deficit in IP-related goods is not a sound basis upon which to weaken IP protection. Indeed, it is a basis to strengthen IP protection.

These recommendations are further sustained by the conclusions of this paper. To these we add, based on the research presented in the third paper:

Recommendation 6

To strengthen IP rights benefits not only local innovation but also trade relations. This is certainly the case with the subjects of our second recommendation, deficiencies in Canada’s regime protecting pharmaceuticals. These changes are straightforward and address specific deficiencies. They are also in large measure changes to which Canada has committed in trade treaties, but we would go further than these agreements require. Therefore, our recommendation is to:

Recognize that Canada has significant R&D activity in life sciences and fix the unnecessary weaknesses in its IP regime for life sciences innovation. To that end:

  • Adopt a term of patent restoration no less than the two-year minimum required by CETA and preferably beyond that standard; to be internationally competitive, the term of restoration should be capped at five years.
  • Address the judge-made utility requirements that are invalidating patents relating to clearly beneficial drugs and other life sciences inventions. If the Supreme Court does not reverse course with a decision on AstraZeneca, then a legislative fix is required.
  • Promptly ensure an equal right of appeal of proceedings, such as those currently brought under the Notice of Compliance regulations.
  • Provide 10 years of data protection rather than the eight required by CETA.

Recommendation 7

As described at some length above, the extent of “fair dealing” in Canadian copyright law has become perilous, and it is adversely affecting, in particular, Canada’s educational publishing industry. This has occurred because of the SCC’s doctrinally unsound and bold conclusions, and also because of statutory amendment of the fair dealing provisions to include “education” as a permitted purpose for fair dealing. The threat posed to creativity in Canada by these excessive fair dealing rules has only begun to be realized and it is time to nip it in the opening blossom. Therefore, our recommendation is to:

Reverse by legislation the excesses of the SCC in expanding fair dealing in copyright, specifically the private study exemption. Guidelines for the better interpretation of this exemption are clearly set out in the minority decision in Alberta v. CCLA. Make it clear that fair dealing is a defence to infringement and not a “right” and that a critical criterion in evaluating the fairness of the dealing is economic impact. In this vein, it is also important to abandon or severely limit participation in WIPO discussions to increase educational access for copyright protected materials.

Recommendation 8

The Copyright Modernization Act finally addressed in Canada the need for means to object to illegal and infringing material on the Internet. But, inexplicably, it provides only for notice to be sent to the June 2017 infringer. It does not set out means to cause the material to be taken down. It provides no means to punish the person infringing copyright. This toothless, half-baked provision needs amendment; therefore, it is our recommendation to:

Provide a more effective remedy for Internet copying by changing Canada’s notice and notice system to a notice and takedown provision and by providing punishments for serial or serious copying.

Recommendation 9

It is unfortunate that the development of IP law in Canada was long marked by inattention by the SCC, and then by its missteps. IP is too important in the modern economy not to be well served by the nation’s highest court. Accordingly, it is our recommendation to:

Ensure that solid intellectual property knowledge and skills are continuously represented on the SCC.

Recommendation 10

Amongst the most ill-considered provisions in the Copyright Modernization Act is the user-generated content (UGC) provision. It has perverse consequences, encouraging as it does copying and violations of moral rights; it is too complex and badly drafted to serve its intended purpose; it leaves copied works open to commercial exploitation by third parties: and it is useless, since it would apply only to Canada, and not the rest of the world the Internet reaches. Therefore, our recommendation is to:

Delete the UGC provision from the Copyright Act entirely.