part one: play their game

Numerous opinion pieces around Intellectual Property (IP) and innovation in Canada have published over the last 18 months, or so.

 They talked about an Innovation Arms Race, Made in Canada solutions and, more recently, Innovation Leakage.  The overriding premise; Canadian innovation and IP, particularly that which is at least partially publicly funded, is landing in the hands of non-Canadian hands.  AI and 5G are the most commonly cited technologies.  This needs some thought cycles.  There must be a different path.  I will address each of the above themes, over a few articles, starting with the most recent.

Neil Desai’s opinion piece last week reflected on the recent repatriation of MDA into Canadian hands.  From here it discussed the movement of innovation from publicly funded institutions to foreign entities.  In making this point Neil presented an example. “Geoffrey Hinton’s publicly funded artificial intelligence research, often associated with the University of Toronto, was patented by Google.”  He continued “Eric Schmidt, speaking about this when he was chairman of Google’s parent company, stated: “We now use it throughout our entire business and it’s a major driver of our corporate success.””  The answer to the innovation leakage problem is right there, in this example.

How did this happen? Why did Google decide to invest in Dr. Hinton’s research, and obtain rights to generated IP?  First, I doubt Google went to a pitch night to see what ideas were out there.  I also doubt Dr. Hinton was shopping his idea around as the next big thing.  Google would have in house expertise that understands Dr. Hinton’s research and its application.  They would have been interested at a level much deeper than the average product at a pitch night.  Google understood the technology at a fundamental level and could extrapolate its importance.

At this point it is also of interest to mention that IP is generally much more valuable at a lower, fundamental level than at some higher level that is closer to a product.  I will not explore this concept further.  Anyone reading ned’s news will have read posts on this topic.

To summarize, the most valuable IP is at fundamental levels of technology; as close to the fundamental research as one can get.  It is just like the work of Willard Boyle that I re-posted the other day. From this lower level there are often a myriad of applications and derivative discoveries.  IP at higher levels is less likely to be as broad.  So, you need good work at the fundamental levels and you must be able to identify it; just like Google and Huawei.

The next step; it needs to be in Canadian hands.  Again the solution is right there in the Neil’s article.  MDA was not repatriated by the government. It was repatriated by private capital.  Canadians need to mimic the foreign corporations and invest in ourselves.  We need to believe in ourselves and our ideas.  All like to tweet about how great we are, so we should invest in ourselves.  Foreign corporations are investing. 

We need private capital to invest at the same fundamental level that Google did.  Now, the IP i.e. asset is in Canadian hands and these hands can decide if they want to license it to foreign corporations. And, even if it is licensed, the asset is still owned by Canadian interests.

In the end, Canadians need to beat the foreign entities at their own game.  We should be looking at, understanding and funding basic research. This is the best shot at bringing fundamental IP back to Canada.  It will also create valuable assets for Canadian private capital.  Everyone talks about the value of IP in the Innovation Economy.  This is a route to own the most valuable bits of it.