‘It’s embarrassing’: China’s tightening grip on the intellectual property landscape in Canada

The top 10 patent applicants in Canada last year were foreign companies doubling down on science and technology

Author of the article:

Jesse Snyder

Publishing date:

Jul 07, 2021  •  July 8, 2021  •  4 minute read  •  318 Comments

The headquarters of ride-hailing app Didi Global in Beijing. China is not only expanding patent ownership in other countries, it is, unlike Canada, tightening its grip on local companies involved with sensitive online data. Photo by Yan Cong / Bloomberg

A Chinese tech giant filed more patents in Canada last year than any other company, evidence of what some observers say is a failure by Canada to secure the critical intellectual property rights needed to build next-generation technologies.

Advertisement

Guangdong Oppo Mobile Telecommunications, a Chinese consumer electronics and smartphone maker, filed 281 individual patents in Canada’s intellectual property office in 2019-20. U.S. semiconductor company Qualcomm was second on the Top 10 list, followed by several other American firms and two Chinese multinationals, Huawei Technologies (sixth) and Alibaba Group (10th). State-owned oil giant Saudi Aramco was seventh.

All companies on the Top 10 list were foreign (nine of them American or Chinese) as firms continue to funnel huge resources into ensuring that they have priority ownership on the technologies of the future, including anything from smartphone software to chemical ingredients for car batteries.

Advertisement

For years, experts have warned policymakers in Ottawa that the comparable absence of IP rights among Canadian companies threatens to put Canada at a severe disadvantage, one that will be increasingly amplified as the economy continues to shift toward more digital, intangible assets. That will in turn make Canada increasingly dependent on foreign multinationals for products and services, and crimp the productivity of the Canadian economy.

“It’s embarrassing,” said Jim Hinton, founder of Own Innovation, a legal consultancy specializing in IP. “We can’t even have meaningful ownership of our own market when it comes to intangible assets.”

More On This Topic

  1. China ‘exporting their authoritarianism overseas’ through Canadian institutions, Hong Kong advocate warns

  2. Agency head on hot seat over lab scientists’ firing has history with China ties and controversies

Article content

Observers blame Canada’s shortcomings on a range of factors, primarily that Ottawa has failed to translate its world-class research sector into products or services that can be commercialized. Canadian leaders have meanwhile signed numerous free trade agreements, including the United States-Mexico-Canada Agreement, that allow foreign companies to secure crucial IP in Canada, even as Canadian companies fail to do the same abroad.

“We’ve had no growth in resident patent filings in the last 10 years compared to everybody else, the Americans and the Chinese particularly,” Hinton said. Without a major course correction, “we’re going to become a middle-income country,” he said.

We’re going to become a middle-income country

Jim Hinton, Innovation Asset Collective

While U.S. firms continue to dominate the patent landscape in Canada, the recent emergence of China adds new urgency to the situation, with American and Chinese firms vying for technological supremacy.

Article content

“It speaks to the ambitions of China, and the means by which they go about really doubling down on science and technology,” said Robert Asselin, senior vice-president of policy at the Business Council of Canada. “They have a clear agenda.”

As part of his China 2050 strategy, president Xi Jinping in 2017 laid out detailed innovation plans, including efforts to rapidly expand China’s clout through massive research and development spending, a modernized military, and the US$2-trillion Belt and Road initiative aimed at widening trade ties with Asia and Europe.

In a speech last year on science and technology, Xi encouraged Chinese scientists to “establish lofty aspirations and high ideals of daring to create,” and provided a lengthy three-point plan to enrich Chinese research and address long-term scientific problems.

Article content

We’re spending here and there, hoping that it will all result in something, but it’s not focused

Robert Asselin, Business Council of Canada

“For technologies in which we can rapidly break through and solve problems in a timely manner, we must step up quickly,” he said. “For technologies that are strategic and require long timeframes for success, we must deploy them in advance. We must assemble first-rate talent with a view to the world, attract foreign high-end talent, and provide internationally competitive and attractive environmental conditions for foreign scientists to work in China.”

By comparison, Ottawa’s approach to innovation has remained piecemeal for decades, spread thinly across hundreds of incongruous spending programs. Finance Minister Chrystia Freeland’s latest budget, Asselin said, was a prime example of Canada’s scattershot approach to the issue, where singular industries or areas of research are never prioritized.

Article content

“We’re spending here and there, hoping that it will all result in something, but it’s not focused. It’s not intentional.”

Canadian lobby groups have in turn been urging Ottawa to take a longer-term view on industrial innovation, calling for strategies that would allow Canada to retain more value from its digital assets.

Our competitors are much more aggressive in the global race to accumulate IP and we need to take a page out of their playbook

Dana O’Born, Council of Canadian Innovators

“The fact that foreign firms are the top filers for IP in Canada suggests that our competitors are much more aggressive in the global race to accumulate IP and we need to take a page out of their playbook,” Dana O’Born, director of strategic initiatives at the Council of Canadian Innovators, said in a statement.

“Canada needs to prioritize the generation and protection of IP, and our governments need to do more to educate businesses and incentivize them to develop sophisticated, modern IP strategies to keep pace with the global economy.”

Article content

Meanwhile, observers say Ottawa has readily signed onto free trade agreements and other IP-specific treaties that allow foreign companies to collect vast amounts of intellectual property rights in Canada, while not providing companies the tools they need to develop their own patents.

That has in turn created a “growing IP trade deficit in Canada,” where foreign companies holding valuable intellectual property rights exert rents on domestic firms, said Natalie Raffoul, lawyer at intellectual property firm Brion Raffoul LLP.

In 2019, the Canadian Intellectual Property Office said it implemented four new IP treaties, including the Madrid Protocol, the Singapore Treaty, the Nice Agreement and the Patent Law Treaty, which it said would “make it easier for Canadian innovators and businesses to acquire high-quality IP rights in multiple countries and markets.”

NP Posted

Sign up to receive the daily top stories from the National Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Jesse Snyder