Brian G. Kingwell
Partner
Patent Agent, Trademark Agent
On-demand webinar
24
Kirk: Welcome to BIV today, the daily podcast from the Business in Vancouver newsroom. I'm Kirk LaPointe, publisher and Editor in Chief. The British Columbia life sciences sector has grown in leaps and bounds in recent years, particularly during the pandemic, and earned further international attention for its innovations. But an important ingredient of its growth has been its attention to not only developing ideas but protecting them. Our conversation today is going to examine the importance of intellectual property. How the life sciences sector, among other places, needs to systematically shield its ideas from theft worldwide and the challenges and opportunities in this field. Joining me now is Wendy Hurlburt. She is the CEO and President of Life Sciences BC. She's someone who's right in the center of the action, as is Brian Kingwell. He's a partner in he Gowling WLG law firm's Vancouver office, in the intellectual property and life sciences group. Good to have you both.
Brian: Thanks, Kirk.
Kirk: Listen, we'll get to the more serious difficult questions a little later on but let's kind of start with the 5 pointers, as they say in game shows. Brian, help me with this. What are we talking about actually with IP? With intellectual property.
Brian: There are a range of categories of intellectual property and for early stage life sciences companies, patents and trade secrets are usually the most important. Other categories are copyright, trademarks, designs, so you don't want to lose track of those. In essence though, fundamentally, what intellectual property is is ideas that are protected. So ideas that aren't protected are available as you suggest for others to beg, borrow and steal. Ideas that are protected become intellectual property and it's the property part of that that become an asset.
Kirk: Wendy, when you take a look at a view from 5,000 feet on this one and you assess the sector, does British Columbia do a very good job? Does Canada do a very good job of protecting its IP?
Wendy: I think there are areas that we do and there are certain areas that we need to always keep our eyes, on thinking about how are we competitive globally, which I think Brian will probably be able to talk a little bit more about. But building off of what Brian said, he's defined what intellectual property is and, as the non-lawyer in the crowd, it's basically those ideas and trade secrets and discoveries that are super important. When you try and protect them, yes, we want to protect them in Canada but ultimately for a life sciences company to grow and be successful they're eventually going to be operating globally. So there's a lot of strategic thought into how do I protect them globally and how does Canada's IP protection laws stack up against global IP protection laws.
Kirk: Tell me, both of you, and I'll start with you, Wendy, on this one who is affected by this? How large a cohort are we really talking about?
Wendy: In British Columbia we have 2,000 life sciences companies, based off of 2018 data. I would argue it's probably grown 15%25 to 20%25 since then. Of those they all have some form of IP. So one of the data points that we have is those 2,000 companies, 1,200 of them have employees. So what's happening with the remainder 800, you might ask? Those are very likely individuals that have found something that they want to protect, per Brian's definition, and yet they're spinning in academia or research institutions. But because they've gone ahead and protected that IP, they have created a company around it, yet they may be an employee still within that academic research center. I look at that 800 as pipeline. As in those are our future companies that are going to eventually spin out of academia or research institutions and start employing people and growing and using their IP to develop innovative solutions for the life sciences sector.
Kirk: So, Brian, Wendy's done a very good job in defining the cohort in all of this but what is the real importance, do you think in protecting IP?
Brian: For that cohort, and it is a growing cohort in the sense that most of the sectors of the economy are becoming dependent on intellectual property, and so for that cohort of the growing number of businesses that depend on intellectual property, the reason that it's central to what they do is that it is an asset that can be capitalized on in a variety of ways. It's the way in which modern companies define their competitive advantage. It's a knowledge economy. Most sectors of the economy are becoming knowledge based industries, and in those industries the competition is for ideas, and the way in which that competition for ideas is measured is in intellectual property. Your ability, capture it and utilize it and differentiate yourself from your competitors based on it.
Kirk: Wendy, it sounds like the protection of IP actually helps define a company's valuation as an asset, particularly when it's doing something like moving into an IPO.
Wendy: That's exactly it, per what Brian said. This is an asset. So early stage companies, their assets are their people and their knowledge. So the more they can tie the people and the knowledge together within a company the more that protects it; that one of the two don't end up disappearing. That fundamentally is what ultimately determines your attractiveness for investment and I would argue your attractiveness to recruit further talent. That want to be competitive in this knowledge economy.
Kirk: So is that the reason why an IP strategy is a core competency?
Wendy: An IP strategy is, especially for early stage companies, critically important for them to be able to position themselves well for the attraction of capital and people.
Kirk: Brian, why aren't companies in the early stages always focusing on their IP issues?
Brian: They're necessarily distracted by the very many other things that they need to do to survive. It's a very competitive world and the other facet of that is that intellectual property is a little less esoteric. There are aspects of intellectual property that are unlike, for example, the technical business of innovation. So it crosses over between the law, legal aspects, important legal aspects about how you define intellectual property and very technical aspects about how you understand what problems your innovation solves. I think it's easy to be put off by those characteristics of intellectual property and to fail to appropriately manage it.
Kirk: Brian, is it at the early stage where most common mistakes are made?
Brian: Yes, but I think those mistakes fall out of the fact that it's easy to be distracted and that committing resources to properly managing intellectual property necessarily takes away from some of the other things that you're going to be doing. So they aren't so much mistakes as questions about allocation of resources and prioritization. They end up being questions about how important is intellectual property to your organization and that can change over time. But I think in terms of what you might call an overarching mistake it's often the case that it's underappreciated, at an early stage, how important intellectual property will ultimately be for the valuation of the company.
Kirk: Wendy, without naming names, give us some example though of how companies have paid the price for not having an IP strategy.
Wendy: Well I can't talk about any specific examples but you certainly see and can read about examples of where people did it too late, and then all of the sudden there were law suits, and people are fighting over really amazing technology that can be very impactful but they're getting tied up in battles, and this is Brian's work, in battles of debating that. The other paradoxical problem which I think is where having a very strong intellectual patent attorney, or strategic partner, is that some people have actually invested too much at the beginning because they tried to do it in an unstrategic manner and sort of peanut butter themselves across too many jurisdictions. It's something that having a really strong partner working with you, and having IP as part of your critical growth strategy, so you can be really strategic about what you're pulling when. Because the other thing with IP is that it's time limited. So if you take it too early, and as we all know in life sciences, it's a long time from discovery to commercialization. So you really have to be thinking about how long am I going to have my protection and how does that align with when I am actually going to be commercially viable and out there with my invention.
Kirk: Brian, this will probably sound like the opportunity for a commercial on this one, but I do want to know about why certain advice is needed in this, because obviously there's a lot of contract law in all of this, but there are some things that are probably quite variable in it. Is IP one of those areas where you really have to get a particular type of advice?
Brian: Yes, it's a particular kind of advice because it's an unusual set of rules that govern the exercise of maximizing value in intellectual property. It is unlike technological innovation. It's unlike managing the finances of a business. It's an enterprise with an entirely separate set of rules that govern whether you're going to succeed or fail. So it requires advice, typically from people who've spent time within the world understanding intellectual property parameters, in the context of business parameters. So it is a separate set of skills and often the challenge is to integrate the outside advice that you're going to get from outside advisors with the business and the strategic goals of the business. That's the primary challenge and the reason to look for outside advice is to augment the internal management of the company with outside advice that gives you insights into this somewhat esoteric world of maximizing value through intellectual property.
Kirk: I'd like to get from both of you some input on this one and what criteria companies need to apply though in searching for help and when and how. So, Wendy, why don't you start with some?
Wendy: Having had a career as a CFO and COO and worked in business development and lots of contracting, there are certain areas that I would never pretend to act on my own, and one of them is intellectual property. The other is probably the complexity of liability clauses. So I think I'll probably answer the question a little bit differently. I would, as soon as I think I have something that I want to patent or have a good idea, I would look for an advisor that is also very business savvy. A lot of our, especially our smees, they're the scientists and the researchers that are brilliant people that have come up with amazing discoveries. So as much as they need intellectual property advice so that they can really understand what do I do with my invention, do I do anything with it right now or do I just keep it to myself and continue to develop it where it might be more valuable later than now, but you also need somebody that can really also help understand what strategically they can do with this invention. So those people that can play that role of an IP advisor, but also be able to think about in the strategic context of where is this knowledge and asset going to be able to be used and applied, would be super valuable.
Kirk: Brian, pick up on that.
Brian: It follows naturally from what Wendy said in the sense that I think that you're usually looking for someone who can be part of the team. That's the most rewarding sort of relationship, I think, on both sides in the sense that the closer your intellectual property advisor can be to your innovators and other managers within the company, everybody within the company who is engaged in the enterprise of capturing value and innovation, the better off you'll be. You're looking for somebody who's part of the team. Somebody who's able to exchange information easily with the team, understand your changing goals, and ambitions, and limitations, and resources and give frank, and as Wendy says, business savvy advice about how to allocate those resources in the most cost effective way.
Kirk: Brian, how are companies guided through this process? Is it on ongoing thing? You say make them part of the team. Does that mean that you're there in perpetuity as every innovation emerges?
Brian: That is the best way, I think, to be guided in the sense that the open dialogue, and consistent back and forth, and the ... IP advises about your changing ambitions, the changing circumstances of the company, gives the advisor a basis for providing cost effective advice. So it is very much, I think, an ongoing team relationship that will evolve over time, but you're guided by the ability of the team to work well together and the intellectual property advisor as part of that.
Kirk: Wendy, with those single scientist companies that you referred to earlier and that pipeline, how does a company make sure that it can afford this so it's not running up its costs unnecessarily?
Wendy: I was just going to say that, the same. That you're going to have your advisor with you on the long haul doesn't mean that they're working for you 30 hours a week through that long haul. I think it's really important to recognize that they're a strategic partner but there's a reason they're outside of the organization, not insides, because you don't need them all the time. Like you need them through the life of the IP but it's like any relationship with your investment lawyer, for example. You may not talk to them for 6 months and then you're getting close to an IPO and then you talk to them everyday. I think it's important that what was just described doesn't necessarily have to be very expensive. Now speaking ... Brian ... if he could kick me under the table, but it doesn't need to be like that. You need to develop that right strategic relationship with the partner that will be there at the right points. The more that they understand the knowledge, and what is being protected, the more they can be there at the right time and they can say, "You don't need to do anything now but let's get to this next milestone and let's be there." I think it's important that you have that resource available through the journey. It doesn't mean that it's a big budget item always through that journey.
Kirk: Wendy, the reason that we're doing these things by Zoom now is so that we don't have an in person situation where people can kick other people under the table.
Wendy: Yeah. I appreciate that. Thank you.
Kirk: Last bit and it would be a little bit of advice for any company that's looking and pondering the fact that it may have ideas that really deserve this protection. Brian, help us with this one, to start. What's the advice on some of the first things that companies ought to look for?
Brian: The advice is to reach out early and to talk to potential IP advisors. The reason intellectual property professionals are in this business is because we love ideas too. You'll find a very receptive audience and an intellectual property advisor will listen to what you're ideas are, bounce ideas around, tell you when the clock's starting or not, and listen to your story about your ambitions are. That's the best part of our job is being a part, a small part albeit usually, of a way that somebody is solving important problems in the world. You can both keep costs down and maximize returns by reaching out early and having those open and frank conversations and involving your outside IP advisor in the excitement of the success that you're about to have.
Kirk: Wendy, can you finish us with this topic about the advice? Having seen what you've seen and your experience in this sector on what would be the first tips that you would have for companies that are wondering whether they need to do this kind of work at this stage.
Brian: I think that when it goes back to what is this, to expect what we said at the beginning. This is the knowledge economy and this is ideas. So these are assets that you're developing and your people, which are assets, are also developing this. So in the same manner that you would take out insurance on your building or on your lab you should quickly, as you're developing this asset figure, out the right strategy to protect it. In that sense finding the right advisor is really important and don't feel that you have to actually understand global IP law. People will drown in that and thankfully there's people like Brian in the world who love doing that. But I think similar to as you get advisors, or as you get insurance, you don't need to understand everything. You need to understand the implications on your asset. But don't mire yourself in trying to understand all the various nuances of it. That's why you have an advisor. But, again, it's an asset that you want to protect. It's your asset, your baby that you have nurtured and developed, and this is one of the really critical things as you move forward.
Kirk: Lot's of great insight. Lot's of education. Lot's of good advice in all of those. Wendy Hurlburt, Life Sciences BC, and Brian Kingwell at Gowling, thanks for your time today.
Wendy: Thank you for having us.
Brian: Thank you.
Kirk: I'm Kirk LaPointe, publisher and Editor in Chief of BIV. Thanks a lot for watching. We'll see you again.
The life sciences sector is booming! Most sectors of the economy are now becoming knowledge-based industries, and in those industries – the competition is for ideas. But how do firms protect ideas and innovations, and shield them from being stolen?
Our very own IP and life sciences partner Brian Kingwell recently sat down with LifeSciences BC president and CEO Wendy Hurlburt, and BIV News publisher and editor in chief Kirk LaPointe, to discuss the challenges businesses face when aiming to maximize the value of their intellectual property (IP). He also provides some insights on how modern companies can increase their competitive advantage early on, with the help of an external IP adviser.
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