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Ottawa should resist calls for a “made in Canada” approach to intellectual property rights and instead create a regime that meets or exceeds international standards and supports innovation

OTTAWA, June 1, 2017 – Canada needs to strengthen its intellectual property laws to make sure it remains competitive internationally in the 21st century, a new Macdonald-Laurier Institute paper argues.

Lead author Richard Owens is urging the federal government to use the development of its intellectual property strategy – which it announced in the most recent budget – to optimize Canada’s laws to meet or exceed international standards.

“The driver for that IP policy should be innovation in Canada”, says Owens. “It should not be about reducing drug prices, addressing trade imbalances, increasing the public domain or redressing perceived injustices of property rights.

“It should be made for Canada, not made in Canada”.

To read the full paper, titled “How We Got Here: The evolution of Canadian IP rights and their economic impact”, click here.

This paper builds on Owens’ and Robichaud’s first entry in the series, which demonstrates how strong intellectual property rights are the foundation of a robust economy.

Now the authors turn their attention to the history of intellectual property in Canada, showing that strengthening intellectual property rights is a key component of making Canada competitive internationally.

The paper takes aim at those who argue that trade with other nations is an argument in favour of weakening intellectual property rights.

This argument – based on the notion that Canada is a consumer, rather than producer, of IP-protected goods and services – is misguided for a few reasons.

First, the data doesn’t bear out that Canada is mostly a consumer. Canada has a slight trade surplus in copyright protected goods and services. And while Canada imports more than it exports in high-technology goods, the deficit is not high in proportion to the total trade of around $200 billion annually.

“We need to further encourage such high-volume trade, not worry about whether or not it happens to be in deficit”, write Owens and Robichaud.

Second, trade balance is fluid, reflecting consumer choice and comparative advantage, and should not affect IP policy. Any negative trade balance initiated by strengthening IPRs is only temporary and will be overcome by increases in domestic innovation.

“The government should recognize that an alleged trade deficit in IP-related goods is not a sound basis on which to weaken IP protection”, write Owens and Robichaud. “Indeed, it is a basis to strengthen IP protection”.

Owens says the government should resist calls for a “made in Canada” approach to intellectual property.

“IP, because of its heavy impacts on trade and because its rules derive from international treaties to a very great extent, is about international standards and developments, not sheltered parochialism”, writes Owens.

The paper offers the following takeaways:

  • Canada is in a surplus in trade in copyright goods and services and has only a relatively small deficit in patented ones. Any attempt to manipulate IP policy as though Canada were essentially an IP-importing, less-developed country would be a complete mistake.
  • Trade balance is fluid, reflecting consumer choice and comparative advantage, and should not affect IP policy.
  • Any negative trade balance initiated by strengthening IPRs is only temporary and will be overcome by increases in domestic innovation.
  • Stronger IPRs encourage foreign direct investment, resulting in technology diffusion and productivity improvements.
  • Pharmaceutical R&D devolves to smaller firms, as does high-tech innovation, and smaller firms benefit disproportionately from stronger IPRs.
  • Canada’s patent-protected outputs have grown over the last 30 years, coincident with the strengthening of Canada’s patent regime.

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Richard Owens is a Munk Senior Fellow with the Macdonald-Laurier Institute and lawyer who has specialized in business and commercial law, regulation of financial institutions, intellectual property and technology.

Michael Robichaud is a researcher for the Macdonald-Laurier Institute. He is currently working towards completing a combined J.D/Masters of Public Policy degree at the University of Toronto following a joint honours degree in history and political science at McGill University.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

For more information, please contact Mark Brownlee, communications manager, at 613-482-8327 x105 or email at mark.brownlee@macdonaldlaurier.ca.