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To Combat Patent Trolls and Trademark Squatters, Canada Proposes IP ‘SWAT’ Teams

Reading Time 4 minute read


Celebrating World Intellectual Property ("IP") Day on April 26th, 2018, Canada announced a precedent setting national IP Strategy recognizing the need for Canadian businesses to succeed in the "innovation economy". Following up on their 2018 budget announcement, the Canadian government plans to invest approximately $85 million over five years in various IP resources to help Canadian businesses, creators, entrepreneurs and innovators commercialize IP and grow their global presence. While a traditional leader in R&D, science, and creation, the government's proposed strategy hopes to help Canadian companies do more to commercialize their IP, a critical asset in our "knowledge economy".

In announcing this national strategy, Navdeep Bains, the Canadian Minister of Innovation, Science and Economic Development indicated that "… IP is a critical ingredient in helping Canadian businesses reach commercial success. Canada's IP Strategy will make sure Canadians know the value of their intellectual property and how to leverage it to innovate, increase profits and create middle-class jobs." Canada's IP Strategy focuses on developing three key strategic pillars: (a) IP awareness, education and advice; (b) IP tools for encouraging growth; and (c) updates to Canadian IP legislation.

With regard to the first pillar, the government proposed, among others, to develop teams of Canadian government IP advisors to help business improve their IP knowledge. These so-called IP "SWAT teams" will be able to help small and medium-sized firms develop and retain control of their intellectual property. Canada will also conduct IP awareness campaigns to identify how Canadians understand and use IP, including groups that have traditionally been less likely to use IP, such as women and Indigenous entrepreneurs. To that end, Canada plans to spend $1 Million (CDN) for IP legal clinics to help businesses get a sense of their IP needs and facilitate access to the IP profession.

For Canadian businesses to succeed in the knowledge economy, they need to not just develop but also commercialize their IP. As part of the second pillar, the Federal government has proposed developing a number of "IP tools" to aid in this regard, including:

  • Budgeting $18.7 Million (CDN) to increase the efficiency of IP dispute resolution and copyright tariffsetting at the Federal Court and Copyright Board of Canada;
  • Creating a pilot "Patent Collective" and allocating $30 Million (CDN) to facilitate better IP outcomes for members by promoting IP best practices, providing patent intelligence and support, and obtaining access to patents to help remove barriers to growth; and
  • Developing a centralized IP-specific portal for businesses, entrepreneurs and innovators to improve the way that companies find and identify existing IP held by government and academia and giving businesses access to groundbreaking research that can be licensed and/or commercialized.

One of the key announcements was the recognition of the Canadian government to update and amend the various pieces of legislation covering different IP rights in Canada. In an attempt to increase "balance and transparency", Canada plans to propose new amendments to key IP laws that will clarify acceptable practices and prevent misuses of IP rights, including:

  • Amending the Canadian Patent Act to affirm that there is no infringement when conducting experiments that relate to the subject matter of a patent;
  • Clarifying that when a patent owner voluntarily makes a licensing commitment to incentivize a standard-setting organization to incorporate its patented technology as part of a standard, prospective licensees will be able to rely on that commitment even if the patent changes owners;
  • Enacting changes to the "notice and notice" takedown regime under the Canadian Copyright Act to remove threatening demands and settlement payments so as to protect consumers while ensuring that the regime remains effective in discouraging infringement.
  • Taking action against "patent trolls" through establishing minimum requirements for patent demand letters to discourage the sending of deceptive and/or vague letters and to reduce costs for the recipient in assessing the merits of the allegations, including basic information (e.g. patent number and product or activities) and new regulations to ensure a balance between asserting IP rights and discouraging bad behaviour;
  • Creating a new College of Patent and Trademark Agents to regulate the IP profession, a key component of the innovation ecosystem; and
  • Preventing "trademark squatting" through introducing bad faith trademark opposition and invalidation grounds as well as trademark "use" requirements to enforce a trademark registration within the first three years.

The proposed IP strategy has been initially well received in Canada. For example, Jim Balsillie, former co-CEO of Research in Motion and now Chair of the Council of Canadian Innovators has been quoted as saying that "raising sophisticated domestic capacity in IP ensures Canada will improve the commercialization of our ideas globally." The day after Canada announced its IP strategy, however, the U.S., government, in its "301 Report", added Canada to its "priority watch list" as Canada inadequately protects IP rights, noting, among others, (a) poor border enforcement including a lack of customs authority to inspect or detain suspected counterfeit or pirated goods shipped through Canada, (b) concerns about IP protections and procedures related to pharmaceutical products, and (c) deficient copyright protection.



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