Universities Are Failing to Equip Entrepreneurs for Patent Battles

ver the past 30 years, while Canada’s policy makers, business leaders and the legal profession were not watching closely enough, the nature of IP shifted from incentive to commodity to investment (Dreyfuss and Frankel 2015). At its inception, IP was incentive-based. The IP system encouraged innovation by providing innovators with a period of exclusivity to enable them to commercially exploit the tangible manifestations of their creativity, free from copycats or free riders. Once that period of exclusivity expired, the IP became free for all to use. IP rights were, therefore, created in order to achieve the socio-economic policy goal of encouraging the wide dissemination of new ideas to enable others to learn from and build upon them.

The commodification of IP is a more recent phenomenon, which has transformed the way in which IP is dealt with in the global marketplace. Starting in the late 1980s, as industrialized countries retooled themselves into innovation economies, IP became a tradable commodity, subject to the normative framework of the international trade system. IP is now big business on a global scale and, although the concept of innovation is not synonymous with IP, the role of IP within the global innovation economy should not be underestimated. As one expert characterized it, “[t]he IP system plays a significant role in helping a business to gain and retain its innovation-based advantage” (Kalanje, n.d., 3).

This commodification of IP has led to the strengthening and deepening of IP rights at both domestic and international levels, as IP rights holders have sought to maximize their exclusive rights in order to gain competitive advantage. It has also resulted in the uncoupling of the intangible aspect of IP from the tangible manifestation underlying the IP right itself. IP rights holders are now more commonly extracting value from their IP as independent business assets, separate and apart from the profits they derive from the exclusive right to produce and sell their innovative products.

As IP rights holders pursue even more aggressive ways of protecting their global interests, IP has pivoted once again — from commodity to investment, protected by international investor-state dispute arbitration mechanisms. Eli Lilly’s use of the North American Free Trade Agreement’s (NAFTA’s) investor-state dispute resolution process in respect of its patents is emblematic of this new construction of IP (Okediji 2014). After some of its patents were invalidated by the Canadian courts, the US-based pharmaceutical giant turned to NAFTA to challenge Canada’s patent law as constituting an indirect expropriation of its patent rights.¹ Although Eli Lilly did not prevail in its claim, the case demonstrates just how far the trajectory has moved in terms of the strategic value of IP as a business asset.

It is certainly an open question as to whether this commodification and “assetization” of IP is a positive development in the larger scheme of things, but it cannot be denied that this paradigm shift has occurred and that it has had a significant impact on the way in which the business of IP is carried out. This is the new IP environment within which Canadian innovators must operate. Unfortunately, they remain ill-equipped to manage this new state of play, largely because they, along with policy makers and educators, have remained rooted in an incentives-based understanding of IP.

Canadian innovators need to develop mastery of the new rules of engagement. They must be able to anticipate the ways in which their competitors operationalize their IP to strategic advantage. They must develop greater skills in seizing the new opportunities that present themselves within this global landscape while, at the same time, being adept at navigating around the geopolitical threats arising from the new IP reality.

As Jim Balsillie, former co-CEO of BlackBerry, has expressed the concern: “We need to reorient both our domestic and our geopolitical engagements to ideas commercialization, particularly in the complex, predatory and evolving realm of intellectual property rights management…. Sophisticated capacity here will increasingly be needed…. The academy needs to research it and our schools need to teach it, the courts need a strategy to advance it, industrial programs need to encourage it, and public sector-private sector structures need to ensure it’s addressed on a priority basis” (Pohlmann 2014). The question is how best to ensure greater sophistication among Canadian innovators for them to succeed in the “complex, predatory and evolving realm” (ibid.) of IP.

An IP Curriculum for the Innovation Economy

Although Canadian institutions of higher learning offer workshops and other informational sessions on IP, the content has tended toward the basics of patents, copyright or trademarks. While this IP 101 programming is an important first step, what is more urgently required is a curriculum that provides more sophisticated knowledge of the strategic role that IP can play as a business asset, for example, as a means of generating revenue through licensing. An IP curriculum for the innovation economy must recognize the ways in which different IP rights are protected and enforced across borders. It must also raise the level of understanding about the larger geopolitical context within which international and transnational IP rights operate. IP systems are not neutral. The way in which the law is interpreted, implemented and practiced in different jurisdictions can be skewed in favour of some stakeholders over others. An appropriate twenty-first-century IP curriculum must ensure that Canadian innovators and their expert advisers are fully cognizant of all of these tactical realities. This means moving beyond the IP 101 curriculum toward the development and implementation of IP 2.0 learning objectives.

IP 2.0 Learning Objectives

Sophisticated skill in IP strategy is not highly developed in Canada and teaching it remains a challenge. In order to build an effective educational program, the question that must be addressed is how best to harness the skills that currently exist, encourage the development of more sophisticated expertise and deliver that expert knowledge throughout the innovation ecosystem.

Problem solving in the current innovation landscape requires nimbleness of thought and action. Post-secondary institutions need to train the polymath who is adept at seizing opportunities as they present themselves. Unfortunately, scholarly and professional disciplines have become too siloed to be able to effectively encourage the necessary versatility of thought. Regardless of the entry point, whether through business schools, STEAM (science, technology, engineering, arts/humanities and math) programs or law schools, an integrated pedagogy is essential, one that fully engages with the multidisciplinary context within which more sophisticated and robust IP strategic decisions can be made.

Two operating principles should guide this effort. First, IP strategic knowledge and skills must be taught in a multidisciplinary way and, second, knowledge dissemination in this area should be asymmetrical, targeted to the individual needs of each specific stakeholder within the innovation ecosystem.

Knowledge Synthesis — Building a Multidisciplinary IP Strategy Hub

Because IP strategy expertise is only at an embryonic stage in this country, a more comprehensive and sophisticated knowledge base must be developed. Consideration should be given to establishing an IP strategy hub consisting of individuals with discrete but complementary expertise. The idea would be to harness different disciplinary proficiencies and combine them with the practical expertise of those with lived experience. This IP strategy hub would advance best practices, provide mentoring and coaching, and develop educational tools and programs. Further, as a result of their collaboration, the members of the hub would hone their own, more integrated, expertise to feed back into the knowledge base. Finally, this IP knowledge collective would provide critical insights to policy makers to better inform domestic and international IP and innovation policy. 

Those who should be at the table include the following:

• Lawyers — but this recognizes that not every IP lawyer will pass muster. Instead, one needs to convene those lawyers who have actual experience helping innovative companies succeed by exploiting or navigating around IP, including experience with the geopolitics that influence the way in which the law is practiced in different jurisdictions. This would include general counsel and in-house counsel who have acquired highly relevant expertise by having worked in integrated groups to strategically manage their companies' IP portfolios. Finally, these lawyers must participate outside of their role as service providers when their vested interests might influence the outcomes. Instead, they should come to the table as subject-matter experts, problem solvers, thought leaders and educators. They need to be able to provide disinterested advice on IP strategy.
• Business leaders and key business strategists who have built companies around IP or who have the experience of defending against or working around third-party IP.
• Start-ups and small and medium-sized enterprises (SMEs) that have been nimble and responsive in developing their individual IP strategies or have learned from their failures to properly correct IP missteps.
• Technical advisers with specific expertise in working around third-party IP or defending against IP assertions.
• Business development professionals and technology transfer officers who work with innovators to meet commercialization challenges and who can identify the gaps and weaknesses in the current system.
• Academics drawn from business, law and other cognate disciplines to test new multidisciplinary, experiential pedagogical methods, to study IP strategy from a multidisciplinary perspective and to provide empirical and evidence-based research that tests and models efficacious strategic approaches to IP.

Knowledge Dissemination across the System

Mechanisms should be put in place to ensure that the knowledge generated through this IP strategy hub can be effectively disseminated throughout the innovation ecosystem and become firmly rooted in curricular outcomes. Educational vehicles such as e-learning tools,² live workshops or webinars, certificate or graduate programs, and integrated, multidisciplinary experiential learning projects should all be considered. Finally, knowledge mobilization in IP strategy must also recognize that not every key player within the innovation ecosystem needs to have the same level of knowledge. Asymmetry should govern, with content tailored to meet the specific educational requirements of each key stakeholder group, namely, the innovators themselves, the various non-lawyer intermediaries who support them³ and, finally, IP lawyers.

In the case of the innovators and non-lawyer intermediaries, the overarching learning objective would be to equip them to spot the IP legal issues in the same way that first year law students are taught. This skill enables individuals to distill the relevant legal considerations from a large set of factual circumstances. Innovators and non-lawyer intermediaries must be taught to spot the IP issues even as they recognize that they cannot arrive at the legal answers themselves. This basic skill would allow them to flag a relevant legal concern for further action, and would serve as the starting point for the development of other essential strategic skills, such as, knowing how the different forms of IP interact and understanding how to layer them for competitive advantage. The ultimate goal would be to enable these groups to recognize various strategic choices regarding the kinds of IP to pursue domestically and internationally. This more sophisticated knowledge would, in turn, allow them to engage in more informed discussions with their legal advisers and to become better policy advocates for their own interests. 

For their part, lawyers must be encouraged to develop the skills of the IP legal strategist. At minimum, they should have in-depth expertise about the different forms of IP, both in substance and in the process for obtaining protection domestically and internationally. They should also have sophistication in how the various forms of IP can be used concurrently and how they are mutually exclusive. Lawyers must be able to assist the client in assessing the legal risks involved in making one strategic IP choice over another in each of the markets into which the client seeks to enter. Legal professionals must be active and tactical problem solvers for their clients. This is not to suggest that lawyers begin to offer business advice, but strategic IP legal advice can be advanced in ways that can assist innovators in arriving at their own informed business decisions. In the IP 2.0 world, there is an area in which IP legal advice and business outcomes overlap. What must be determined is how lawyers and business advisers can operate within that intersecting space without compromising the integrity and ethical responsibilities of each group of professionals. 

Pulling the Pieces Together: The EPIC Odette Nimble Innovation Project

An experiment is currently under way at the University of Windsor to train a cohort of more nimble innovators, non-lawyer intermediaries and lawyers. The EPI (Entrepreneurship Practice Innovation) Centre Odette Nimble Innovation Project has assembled a team of engineering, business and law students to work together to determine the technical, business and legal viability of an idea for an improvement on an existing product for market entry in Canada, the United States and the United Kingdom. The project was designed to pool the talents of the students from the diverse disciplines to develop collective knowledge through peer learning. It recognizes the asymmetrical nature of the necessary IP knowledge that students from each discipline should attain. Finally, it encourages these future professionals to think about the ways in which new ideas and innovations can be developed in an incremental and strategic way.

These future leaders in engineering, business and law have acquired a new appreciation for what the others bring to the table. By working with the business students, the engineering students gained a better understanding of how to develop products that appeal to consumers. Working closely with the law students, the engineers learned to design products in tandem with determinations of patentability, in real time, as the technical ideas were evolving. In a similar vein, the business students collaborated with the law students from the outset in order to ensure that their branding and marketing strategies fully complied with the legal requirements of trademark law in multiple jurisdictions. These innovators and expert intermediaries are now better able to spot the IP issues and are more cognizant of the need to seek expert legal advice before they fully commit to a particular course of action.

This kind of integrated learning has deepened these students’ understanding of the legal landscape around which they must operate in order to successfully commercialize their ideas, including the geopolitics of operating in a transnational context. For their part, the law students learned to relate their findings to the overall strategic goals of the business. They recognized the dividing line between strategic IP legal advice and business advice, and worked collaboratively to integrate their legal expertise with the disciplinary expertise of their business and engineering counterparts. They are now better able to tailor their IP legal knowledge to advance the strategic objectives of the venture and to offer legal solutions that meet appropriate technical, business and legal parameters. This is the kind of integrated, multidisciplinary and asymmetric expertise that is required throughout the innovation system in Canada. 

Conclusion

As policy makers assist Canadian innovators in scaling their companies, they must simultaneously recognize the need to scale the collective expertise in IP strategy. The inherently integrated and multidisciplinary nature of that essential knowledge requires educational and skills-training strategies that challenge the current highly compartmentalized structures of our educational institutions and our disciplinary specializations. The ideal IP curriculum for an innovation economy must be agile and polymathic. Its goal must be to encourage the development of sophisticated approaches to solving complex IP challenges. It should foster nimbleness across the system to enable innovators to successfully exploit the new strategic opportunities that arise from the commodification and assetization of IP. Developing the expertise and the optimal dissemination tools to train Canada’s IP-savvy innovators and their cadre of IP strategists must become a top priority for policy makers and educators alike.