Knowing the past is useful for understanding where we are now and how we can succeed in the future. The final session of IP Osgoode’s symposium honouring Professor David Vaver’s contributions to IP law, titled “The Importance of History”, examined this concept in relation to technology transfer and copyright in Canada.
After an introduction by the session’s chair Prof. Ikechi Mbeoji, Prof. Tina Piper, from McGill’s Faculty of Law, whose doctoral thesis was supervised by Prof. Vaver, dedicated her talk to the formation and early years of the National Research Council of Canada (NRCC) and its influence on present-day technology transfer. Casey Chisick, Partner at Cassels Brock, and former professor who took over teaching Professor Vaver’s IP course at UBC, dedicated his talk to the problems of the Copyright Board of Canada (CCB) and how copyright’s development in Canada has led to this.
Origins of Technology Transfer in Canada
Nowadays, technology transfer offices (TTO) are ubiquitous among Canadian universities and primarily serve to commercialize the research of their respective institutions. As Prof. Piper explained, these offices are seen as successors to the now dissolved Canadian Patents and Development Ltd. which was created by the NRCC in 1947 as Canada’s first technology transfer office. It is interesting to examine how this culture of technology transfer first arose in Canada and how its originating tenets are still relevant to technology transfer today.
Prof. Piper explained in the early 20th century, Canada had an innovation problem. Although there was undoubtedly innovation occurring, most Canadian inventions were being patented and commercialized in the US. Canada needed to commercialize its innovation and to do this; the NRCC was founded in 1916.
Its first president, Henry M. Tory noticed a problem that American research councils faced at the time which was that American council members would patent in their name, thereby reaping all the financial benefits of commercialization. As a result, Tory passed legislation that the rights of all discoveries, inventions, and improvements made by NRCC council members and staff were to be held by the NRCC who would commercialize them. Prof. Piper states this laid the foundation of technology transfer in Canada.
Even with their policy reform, the NRCC was still not effective at commercializing their innovations. This changed when Andrew McNaughton, a military inventor, general in World War I, and chief of staff following the war, became president in 1935. As Prof. Piper explained, the military used a systematized approach to innovations where inventions made by members would be given to an overseeing body. McNaughton applied his knowledge gained through military management and under his four years of leadership, the number of patents the NRCC held rose from 55 to 138, and the amount of money earned by patent royalties finally overtook the funds lost by licensing.
Prof. Piper notes that many of McNaughton’s practices are still followed by TTOs today. This includes practices like sending out a careful description of the invention, statement of first costs, making offers to responsible parties, conducting market research to sell the invention to a new country or investor. Furthermore, the NRCC wanted to utilize their innovation for social good. This is evidenced by the fact they offered non-exclusive licensing for their most useful patents, such as those pertaining to locomotives and plant hormones. Prof. Piper concluded that in many ways, the open innovation movement we see today was already being pursued in the 1930s.
The History of Canadian Copyright Regulation
In contrast to Prof. Piper, Mr Chisick chose to centre his talk around a problem. This problem being the failure of the CCB to fulfill its mandate of efficiently balancing the needs of copyright collectives and users. The inefficiencies of the CCB have become so great that the government launched a consultation period in August 2017 with various stakeholders including collectives and consumer groups. The 60 submissions received, largely identified similar problems.
Mr Chisick stated the biggest problem of the CCB is the time it takes in completing a hearing and rendering a decision. For example, the time between a collective filing for a tariff proposal and the Board’s decision on that proposal is 3.5 years. Meanwhile, a market may have developed in those few years in a way that is incongruent with the assigned tariffs. The process is expensive, and the decisions have become unpredictable. Innovative services that rely on copyright works are reluctant to enter the Canadian market because they don’t know the price they will have to pay for rights they rely upon. Mr Chisick noted that although many stakeholders identified similar problems, the solutions they identified varied. For this reason, it is essential to understand the history of Canadian copyright.
Mr Chisick discussed how collectives were first formed in Paris to protect the rights of a broad range of created works and how they provided an efficient and predictable way for users to license works. This idea was later passed unto Canada in the early 20th century with the creation of the Copyright Act and founding of performing rights societies. Lastly, an agency regulating the royalties to the performing rights of music, which would later become the CCB was established. As the century continued, the CCB would suffer from overexpansion of its jurisdiction and mandate without adequate resources to serve them.
Mr Chisick concluded that solving the inefficiency of the CCB will require determining the role we’d like it to serve. Historically, this has changed. More recently in CAB v SOCAN, the Federal Court of Appeal decided the CCB’s role requires the balance of protecting both licensees and users. However, given the aggregation of powerful users like Google, Amazon, Apple and reduced number of economic actors in that space, determining what degree of control the CCB should exercise in respect to these parties will have to be considered.
Sebastian Gorlewski is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.