Protecting cleantech inventions in Canada

Jeffrey:  So I think one of this misconceptions is this thinking that IP protection will wait for you until you're ready. It's just not right. You need to seek help or at least do some digging yourself and figure out what you want to do. What your IP strategy is going to be and it has to be a flexible strategy that's going to change with the business.

Introduction:  Welcome to Cleantech Forward, a Foresight podcast, where we explore cleantech customer's capital and Canada's path to net zero. Tune in to learn more about Canada's most exciting cleantech startups, industry success stories, investor insights and academic initiatives as we accelerate the growth and impact of cleantech, together.

Jeanette:  Welcome back for another episode of Cleantech Forward. I'm Jeanette Jackson, CEO of Foresight Canada. Today I'll be speaking with Jeffrey Coles of  Gowling WLG. Jeff is a partner in Gowling's Calgary office and a registered patent agent in Canada and the United States. If you have ever asked yourself, when is the right time to pursue IP protection, where do you start in developing your IP strategy and how can you keep your strategy flexible as your company grows? You've tuned into the right podcast. Jeff is a veteran in the world of IP and his insights are invaluable for both established innovators and budding entrepreneurs.

                        This Cleantech Forward podcast is supported by Gowling WLG. A global leader in intellectual property law, Gowling WLG works alongside Canadian cleantech companies to develop IP strategies that maximize business opportunities and increase market share, while protecting valuable innovation. From idea to investment, to international expansion, Gowling WLG understands the potential of your intellectual property at every stage of growth. Visit gowlingwlg.com/cleantech to learn how they can support your business today.

                        Hello, everyone. My name is Jeanette Jackson, CEO of Foresight Canada, and we're here today to talk about how exciting intellectual property is for climate ventures across Canada. I am so excited to be joined by our special guest and sponsors of the Cleantech Forward podcast, Jeffrey Coles from Gowling WLG. Jeffrey, thanks for coming on today.

Jeffrey:  Thanks, Jeanette. It's a pleasure to be here. I do want to thank Foresight Canada for the opportunity to be here. My name's Jeff Coles. I am a patent lawyer and patent agent and trademark agent with Gowling WLG. I've been practicing in this space for well over 15 years now and it's been a great pleasure. It's a really rewarding career and really interesting.

Jeanette: Alright. Let's dive into why we're really here. When it comes to everything intellectual property I know Gowling WLG has been doing an incredible job supporting Canadian ventures. From our perspective at Foresight, when we're working with the ventures, it's really important for us that they understand the strategic importance and role that intellectual property plays in the value of their future business. So IP protection serves as a powerful tool for protecting potential growth, as well as helps these ventures secure funding. Both patent and trademark protection are correlated with increased venture funding and the likelihood of business success. So why don't you tell us a little bit about the work you do, the types of ventures you support and why you think protecting your IP is important.

Jeffrey:  Sure. My practice started in Ontario. I did law school here in Alberta and that was back in 2007. I have to say, coming out of law school in 2007, the Alberta economy wasn't as diverse as it is today and I made the decision at that time to go to Ontario. I found the work in Ontario, just the type of work I was doing, it was more with foreign associates, so to speak. So dealing with a lot of technologies that have been developed around the world but you're not seeing it first hand. After developing my skills and really gaining great experience in Ontario I decided it was time to come back to Alberta. Really the reason for that was there's a lot going on in the Province right now, out West generally, I mean in BC, in Alberta and Saskatchewan there's a lot of great innovation going on right now. Whether it be the AgTech space or the AI space, there's a lot going on in AI in Calgary and Alberta. My family and I, we made the decision to come back to Alberta and the Western Provinces so that I could have the opportunity to work firsthand with these startup companies, who are really providing interesting technologies to the ecosystem. When I first moved out here, a lot of my first clients were in the oil and gas space, and really interesting technologies. Since then I found the culture's changed slightly in that a lot of the really intelligent people who are just too busy in their roles with the oil and gas companies at the time, you know they've moved onto other things, and some of the technologies they're coming up with are just fantastic. I know I work with one company, ENRICH, and they do line stopping technologies and it's really fascinating technology. The opportunity to immerse yourself in the ecosystem here, out West, it's just fantastic. There's a lot of diversification going on and it's just really interesting work. We're seeing now, in Calgary too, quite a few new accelerators pop up. Platform Calgary just launched here in Calgary recently. That'll be really interesting to see how that works. There's a bunch of opportunity, I think, for startups.

Jeanette: Absolutely. We've had the privilege of working with Platform Calgary on the cleantech efforts since late 2019 and now that they're getting the pre-accelerator going, I think it's called Alberta Catalyst, and in partnership with Innovate Edmonton and I think it's going to be a very high value, high impact initiative that scales up that early stage funnel of ventures that are really trying to make meaningful businesses have great impact, not only in the Alberta ecosystem but obviously with those opportunities comes the opportunity for higher exports, as well the ability to attract foreign direct investments. So very, very exciting stuff. Putting your legal lens on, how do you define intellectual property? Like what is that to you?

Jeffrey:  That's a good question. Broadly speaking, obviously intellectual property is really any invention of the mind, but that's not how we tend to think of it. There is the various types of intellectual property based on the forms by which it can be protected. Common one that almost everyone have heard of, patents. So patents protect inventions. Then there's trademarks for brand protection, such as symbols or names. Industrial designs to protect product appearance. Copyright for artistic and literary works. Really I think one of the ones that's sometimes forgotten by companies, and often you need to figure out how you're going to strike the balance, is trade secrets. This is where really any creation of the mind is really intellectual property and you need to decide what's best for your company. Whether it's going to be to keep certain technologies as trade secrets or to pursue protection for that intellectual property through patents, or industrial designs, or trademarks and it's sometimes difficult, particularly at early stages, for companies to determine what's the best course of action for them. I often work closely with clients on trying to develop an IP strategy, that's not only going to help them in the short sight, but it's thinking long term about whether or not something's best going to be protected by patent or whether they should try and maintain it as a trade secret within the company.

Jeanette: Absolutely. A little bit of information that you might now about me. I am a serial entrepreneur and one of my first ventures was pretty heavily IP focused. So I was in the garage, in the shop, working with the technology team drafting sort of provisional patent concepts. All the circuitry and the descriptions, and I think we filed over 50 provisional patents, and then some of the ones that matured and evolved into full patent applications. It's a commitment and a lot of work but at the end of the day that was the key mechanism that allowed us to go out and showcase our value to investors, and of course, our perspective customer base.

Jeffrey:           That's really interesting, Jeanette. That's what I like to hear. I love it when a client comes to me and says, "Look. I've already been thinking about this. We've already started putting pen to paper on some of our ideas that we think we should probably pursue patent protection for." That's really interesting. I didn't know that about you so that's good to learn.

Jeanette: What is one of the biggest misconceptions about intellectual property protection that you see on all the work you're doing?

Jeffrey:  I think there's two actually that I come across most commonly. Misconceptions about intellectual property and the protection of intellectual property. I think the first, and it kind of goes to what you were just saying about sitting in the garage and drafting upwards of 50 provisional patent applications yourself, a lot of startups that I work with, they seem to be on the misconception that intellectual property protection is going to wait for them. It'll be there when they're ready to go after it. They haven't put any thought into their intellectual property strategy early on and this can be detrimental. There's so many things that can prevent even the most savvy early startup company from obtaining protection for their intellectual property. Inadvertent public disclosures or improper handling of information within the organization that should be kept as a trade secret. So I think one of those misconceptions is this thinking that IP protection will wait for you until you're ready. It's just not right. You need to seek help or at least do some digging yourself and figure out what you want to do. What your IP strategy is going to be and it has to be a flexible strategy that's going to change with the business. Second I think the biggest misconception I see is thinking that because you have a patent, or a patent application filed, that you're safe to commercialize your technology. There's often a misconception that if you've patented something then you're set for commercialization. You don't have to worry about anything else. But there's the flip side of the coin and that's freedom to operate. You always have to be considering whether someone else out there, a third party, may have blocking IP that could prevent you from commercializing your technology. Again, just thinking it one sided, I have IP. It's not enough. You have to be thinking about what others are doing in your space.

Jeanette: Yeah, absolutely. I remember the stages of sitting at the table with the tech team, and of course the business team because our goal was always to align IP to commercially viable, which I know can be a work in progress, but we would sit and sort of whiteboard the whole landscape and essentially figure out where the blue sky opportunities were and decide if we should be sort of targeting that area, and of course we worked with different professionals that helped us sort of draft the concepts, and of course legal. Do you see people doing that a lot? Do you get into that whiteboarding stage and do that banter or help facilitate those types of sessions as well?

Jeffrey: Oh definitely. I think it's one of the things I miss most, over the last few years, is getting to do as much in person interaction with my clients as I used to. We still do what we can in a Zoom context, but I used to have clients come into my office on nearly a daily basis and we'd just occupy one of the boardrooms and there's whiteboards in there, we'd just start marking it up and trying to figure out and that's exactly what you need to do. You need to determine what the landscape is in your space. Where's the room? Where's the avenue to patent protection that's going to give you the competitive advantage over others in your field. Once you've narrowed that down, two, there's also making sure that, and this is where I see a lot of mistakes made early on, is either patents get drafted too narrow to protect and they only provide a picture of the invention that's been developed, as opposed to thinking about potential design arounds that someone could do and could enter your space and really destroy the market and the value that you've built.

­Jeanette: That makes absolute sense. We, at the time it was a very competitive space, and one avenue was digital and the other avenue was analog. But both of those alone are really big spaces. I want to know, are you a fan of provisional applications? Do they work? Where should people be using them?

Jeffrey:  I'm a big fan of provisional applications. It really provides the opportunity to plant the flag in the ground early, so to speak, to get that priority date for at least the broad concept of the technology. Hopefully it's fleshed out as much as possible at that stage but a priority application then provides the entrepreneur or the startup company with another year to really further develop that technology before a regular application is filed. Such as either a PCT international application or just a number of regular applications in countries of interest. I am a fan of the US provisional application. Obviously this can be done by other priority applications in other countries but what I like about the US provisional system is that it's never going to publish. You don't have to actively withdraw it. If all of a sudden the company decides that they don't want to pursue that technology, or they don't want it to become publicly known, filing of a provisional application won't harm that. I like the system. I think it has good value and provides that extra year that some of these companies need to really further develop the technology.

Jeanette: What are some of the particular challenges around IP protection that you've seen in the Ag space, domestically or internationally?

Jeffrey: That's a good question. There are a number. First and foremost, I think, you look to our neighbour to the South, the United States, and the United States is quite different. You can obtain patent protection for plants in the United States whereas in Canada that's not available. That said, we're fortunate in Canada that it actually doesn't present a significant barrier to IP protection in the AgTech space, because there are indirect routes to patentability through the patent system such as pursuing claims to plant cells. Perhaps plant cells having modified genes, for example. Then we also have the Plant Breeders' Rights Act here in Canada so you can get PBR protection for new varieties of plants. While that is a distinguishing feature between Canada and the US, and often one that shocks some of my clients here in Canada, luckily there are ways around the issue that you can't have a plant patent in Canada. I think one of the ones that I've actually come across a lot in the last few years of practice is inventions towards new processing methods. This is an interesting one because they're a lot of fantastic technologies right now being developed. Methods of manufacture or methods of processing. For example, like protein isolates from any number of seed type products out there. It's a tricky area because they're very valuable and patentable subject matter but you have to think down the road, and how easy is it going to be for you to determine what your competitors are doing behind closed doors, and whether or not they're actually infringing a process patent or not. So some of my clients have decided to forego patent protection for new processing methods because ultimately it came down to a decision, we might as well keep this as a trade secret, because how are we ever going to figure out what someone's doing out there to know if they've infringed our method or not. So that's a particularly challenging area in the AgTech space. Third, I think, not really going to the technology itself per se, but I think historically investor and community support in this sector, such as through AgTech investment funds or AgTech accelerators, they've been somewhat lacking or behind where other industries are. I think we're starting to see a change in this. We're starting to see more money get put into the industry from the investor side. We're also seeing a lot of new AgTech accelerators start to pop up. I think this is promising change.

Jeanette:  Hearing you talk about AgTech accelerators, we definitely want to get you and your team involved in our AgriNEXT initiative that we've partnered with Natural Products Canada. With all of these sort of passionate people interested in upsetting the status quo of traditional industry, it's not just in Ag, but let's use AgTech as an example. We see it in mining and oil and gas, etcetera. But are these companies particularly vulnerable to legal action given that they are trying to disrupt the status quo?

Jeffrey:  I think yes. AgTech had for a long time remained relatively untouched by disruptive modern technologies. Global food demands and environmental issues, they're quickly changing the situation. Some interesting and disruptive AgTech innovations that I think we're seeing emerge are in areas such as cellular agriculture, or vertical farming, or precision agriculture. And sure, these pioneering companies and technologies, they likely will be targeted by competitors resistant to change. Now, I see this as somewhat inevitable and it happens in other industries as well. I believe it also presents a lot of opportunity for startups in this space to strike lucrative deals, such as through exits, through acquisition or what have you. I think it's inevitable. People and companies are resistant to change but there's opportunities as well. I think one of the bigger challenges, from my point, is the patent troll. These non-practicing entities who purchase patent portfolios solely for the view of demanding licencing fees from startups and threatening litigation. This can be problematic for early startups who lack the budgets to defend themselves. All I can say on that front, right now, is I'd highly recommend any startup who's contacted by a patent troll to seek advice from a skilled IP practitioner, to really assess the level of risk and determine a best course of action because often these are frivolous claims.

Jeanette: It's so hard as a startup entrepreneur to imagine taking 50, 100,000 dollars and setting it aside for IP protection. That's what they cost and you really have to put your strategic lens on and think about that future value. Have you seen instances that are notable or perhaps, you don't have to give some names, but where their founders neglected to file IP?

Jeffrey:  Yeah, I've certainly come across it in my practice and obviously those are difficult ones to see. You don't want to see that but surely it happens. It happens to the best companies that things get missed. Again, it really comes down to realizing very quickly, okay it's happened. How do we move forward? Often there are a lot of good advancements to technologies. A lot of improvements on technologies. If an opportunity is missed, it's important for a startup not to get caught up in it too much, and to sit down with their advisor and really recognize that the situation has occurred but how can we get out of this and still be on a really good footing. Oftentimes it is possible. There is a road forward. I hope a lot of startups who realize they have missed an opportunity, don't get too discouraged. Sure, it's not a great situation to be in, but get appropriate advice and figure out what are the best steps to move forward.

Jeanette: One of the statements that always stuck in my head as an entrepreneur, and thinking about IP, is when people said, "Well, your IP is only good as your ability to protect it." Is that a true statement or would you debate that?

Jeffrey:           It's certainly an aspect. To me, I think commercialization is huge. In my view your IP is as good as its proper drafting and coverage over your commercial embodiments, and second, your ability to seize the opportunity that's presented and actually commercialize on that IP. I think there's a lot more to it and I think it's unfortunate. Some of what I consider to be the best inventions that I've come across in my career have gone nowhere because the founders of the company, or those running the company, they weren't able to commercialize the technology. Whether they didn't make the right contacts at the right time, or it's just the wrong personalities in certain roles, but unfortunately I've seen some of the best technologies kind of go by the wayside whereas technologies that I wouldn't have thought to have taken off like they did, they have because the startups knew how to seize on the commercial opportunity.

Jeanette: So, Jeff, to close things off here, what advice would you give to an early stage entrepreneur and is there anything else you would sort of add to our conversation today?

Jeffrey:  Obviously a lot of the points I think we've hit on here and you've asked some great questions, Jeanette. I think it maybe goes back to your question about misconceptions. The advice I give to early stage entrepreneurs is don't wait. Don't think that IP protection is going to wait for you. There's obviously a lot of hustle and bustle in the early stage of getting a company up and running, and determining all of the appropriate strategies to commercialize technologies, but don't forget about IP and protecting you intellectual property early on. Some of that earliest IP is really the core technology that your company is going to build on for years to come, and if you don't have proper protection for it, or an IP strategy in place to protect it, then a lot of the benefits you could have obtained from that are going to be gone. Whether it be securing financing or obtaining a monopoly to the market. All these are things that IP contributes to heavily. Going to things I'd like to add, you mentioned, or we spoke about quickly, frivolous actions and whatnot and you're right. It's going to happen. There are going to be David and Goliath instances. There are going to be patent troll instances. I'd just like to tell the startups out there that, don't get too discourage. Do what you need to do to move the business forward. If situations arise, particularly in Canada, we have a very favourable court system here in Canada for reducing the impact or the number of these frivolous cases we see. One of these mechanisms being an award of cost. And another, and this is one that's really just come up in the last few years is, there's been an increased opportunity for what's called summary judgment. This is an ability to end the case, a frivolous case, early on and thereby save a lot of litigation costs. I was handling a case a few years ago for a Saskatchewan company, TA Foods, and that was exactly the situation. We were involved in a litigation and we were able to bring a motion for summary judgment which got approved. It ended the case at an early stage, and really at minimal cost to the client, as compared to what a full blown litigation would have cost. I think if any entrepreneurs or startups have questions, don't just assume it's going to sort itself out, or that it's the end of the day for the business. Contact a skilled practitioner and get some good advice.

Jeanette: Absolutely. Thank you so much, Jeffrey. It's been a great time having you on this conversation. Everything IP. We look forward to working more with you and your team at Gowling WLG as we continue to educate, inform, not only our cleantech ventures but the broad Canadian cleantech community, at large. So thank you so much and we'll talk to you soon.

Jeffrey:  Yes, thank you, Jeanette. It was fabulous to have this opportunity.

Jeanette:  Thanks for tuning into this episode of Cleantech Forward. Next week I'll be speaking with a man some consider to be the Godfather of cluster development around the world, as a strategy for economic development, Ifor Ffowcs-Williams. Next week Ifor joins us to discuss cluster development, how a strong cluster can provide economic longevity and put Canada on the map as a global leader in cleantech. We'll see you there.

Closing: To learn more about Foresights programs, advanced and more, visit us at foresightcac.com or follow us on social at foresightcac.