The Innovation Asset Collective (IAC) is on a mission to help cleantech companies understand the value of their IP. Erin Pisko, Vice-President of IP Strategy at the IAC, uses real-world examples to show on which components of an IP strategy cleantech companies should focus. The IAC’s core programming provides a comprehensive suite of supports, including funding and skill-building to help increase patenting activity in the cleantech sector.
The Innovation Asset Collective (IAC) is on a mission to help cleantech companies understand the value of their IP. Erin Pisko, Vice-President of IP Strategy at the IAC, uses real-world examples to show on which components of an IP strategy cleantech companies should focus. The IAC’s core programming provides a comprehensive suite of supports, including funding and skill-building to help increase patenting activity in the cleantech sector.
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Lisa Desjardins (Lisa): Around 3 in 100 Canadian companies own a patent. If you’re one of them, or maybe you think you will be one of them, then you really want to make sure that you have a rock-solid IP strategy. Maybe you’ve taken a tour of CIPO’s resources to understand the steps to getting started on an IP strategy, but if you’re still unsure on some of the bigger pieces around managing risks like doing a landscape search to understand the IP around you, deciding on whether you should buy some patents, and if you should consider an IP liability insurance. Then, this episode is for you. With us today is Erin Pisco from the Innovation Asset Collective, also known as IAC, which is a nonprofit organization funded by the government to assist Canadian small and medium enterprises in the data cleantech sector with their IP needs. Erin, welcome to the podcast. I’m really excited to have you here. And have this conversation today.
Erin Pisco (Erin): Thank you, Lisa. I’m super excited to be here.
Lisa: So we have with us today Erin from IAC and I was wondering before we dive into today’s topic, I was wondering if you could tell us a little bit about yourself and how you ended up working in the field of IP and, of course, explain who is IAC.
Erin: Thanks, Lisa. I’m always happy to talk about IP. So, a little bit about me is I actually really didn’t know anything about intellectual property until I finished my graduate degree, which I think has been a pretty typical path for people. So, I have a couple of degrees in engineering and after finishing those degrees, I really had figured out that while I liked the analytical problem solving part, the idea of actually practicing as an engineer just wasn’t a good fit for me go forward and so, fast forward I heard about IP. A colleague of mine was in the trademark space and started talking to me about patents and I thought this sounds amazing. I had an opportunity presented to me and I’ve never looked back. My career has been really interesting in the fact that I’ve been able to work in the field from a bunch of different perspectives. I’ve worked as a service provider in a large multinational law firm. I’ve worked in house at a variety of startups and full-scale companies, and now I find myself at IAC. So, IAC was launched in 2020, as part of Canada’s federal IP strategy, where we’re really looking to sort of put Canada on the map when it comes to intellectual property. As you mentioned, Lisa, yes, we support data-driven cleantech companies and we really are looking to do 2 things. One of our focuses is around upscaling and building IP literacy for business leaders, and the other is around creating freedom to operate for our members. Currently, as of today, we have over 200 members that utilize our core programs and our team of in-house experts and our team is really interesting in that much like typical law firm, we actually have over 10 IP experts that work in our nonprofit with a variety of different experiences to really aid our membership, so it’s pretty exciting.
Lisa: We’re so happy to have an organization like this in the IP ecosystem. Now, you mentioned that IAC specifically set up for companies in the cleantech sector so, tell us a little bit more about what kinds of programs do you offer and how can people access these programs?
Erin: Great question. So, as I mentioned, we’re membership-based, we actually offer 2 tiers of membership. One is a free tier, it’s called our associate membership and one is considered to be full membership. The way people access our program is through this membership. So I’ll talk a little bit about the core programs they have to offer. Right now we have 5 core programs. The first is IP upscaling. This is really focused on learning and building that literacy and business leaders that I mentioned. It really provides resources that are aimed at helping SMEs to build solid and scalable IP strategies, really enabling them to be intentional when it comes to building IP as a strategic asset. The second component to our programming is around funding. We know that SMEs in Canada are always are looking for funding dollars. The way our funding works is it’s specifically focused around IP activities. We have a grant side and a credit side. So, our, there’s a membership fee to become a full member, but that membership fee is credited back against annual IP spend for our members. The second piece of the way we provide funding is through a competitive grant program that strives to help members achieve consistent IP activity, and since 2021, we’ve awarded about $2.3 million in that funding. The third component is really around enabling people to understand those market landscapes that you mentioned in the intro. So, it provides IP intelligence and what that enables member companies to do is understand both the risks and opportunities in the sector they’re operating. You mentioned we’re in the cleantech space and to date we’ve built 10 comprehensive reports around different sectors in, within the cleantech sphere, and members use reports and the accompanying data sets that underlie those reports to inform their business and IP strategies. It helps them identify risks, opportunities on their path to commercialization. And there is a smaller version of these reports that’s available on our website that anybody can view. The fourth part of our program is about accessing IAC’s patent portfolio. So through membership, our full members gain access to a suite of patents and patent rights that would otherwise not be available to them. Our members don’t contribute their own patents, it’s not a pool, but IAC looks to build this portfolio and carefully selects and acquires assets from external sources, and with the goal of providing our members with patents that could create leverage opportunities, and we’ll have a few stories about those: why you need leverage later, especially in the cleantech space. To date, we have over 165 patents across 74 patent families in our portfolio that covers jurisdictions such as the U.S., Europe, China, Japan, South Korea and India. And the last piece of our program is really around providing another component to freedom to operate and that is access to IP liability insurance. We provide access to this insurance to our full members and it’s just another way that companies can look to mitigate risk. Our base coverage provides both infringement defence and an optional enforcement component. So, it really allows companies to have some degree of comfort when they’re operating in a space where they know there are some bigger players as they’re getting started. The associate member tier receives access to a limited suite of these programs and full members gain access to the whole gambit and in addition to that, we’re always looking to understand what are the stumbling blocks our members are struggling with and see if we can provide opportunities. So, to date we also provide access to patent searching software and IP management tools at discounted rates to help our members establish best practices when it comes to intellectual property.
Lisa: That’s a fabulous and very comprehensive portfolio that you’ve got there and I love the different components and for our listeners, I got to say that the summary of those reports that you mentioned are really worth a peek. And I want to turn this into a segue into the next question, which is about factoring in IP. Now, if somebody reads those summaries, they’re probably going to find, “Oh! Here is a lot of things that I actually need to know,” because companies are often laser-focused on running their day-to-day business, and obviously, they’re also focusing on seeking funding. So, let’s talk about IP and why do you think that they need to factor in IP? Why is that so important?
Erin: Yeah, that’s a great question. So, IAC and myself throughout my career recognize like IP isn’t driving businesses, but it is a critical component that companies want to factor into business strategy especially today. Because it’s really important to understand where does your business value come from as a company and where are you competing and IP really has a key role to play in that. So, where does value come from? In today’s economy, I think you’ll see that, if you look at the S&P index, more than 90% of the companies value is held in its intangible assets, of which IP and data are a key component. So when companies are building their business strategy, you can’t leave IP off to the side and place it so far down the list that it’s an afterthought. Really, some of your strategy, if when you’re forward thinking, lots of companies are going and going, if you have an exit strategy, you have to understand how IP can play into increasing the valuation of your business to enable you to achieve that exit. The second piece that’s really important to focus on is because companies don’t operate in a bubble, you have to understand the global value chain. Who else is competing in the market and ensure that you have the ability to commercialize the technology that underpins your business, and the way to create ownership positions is often in the form of intellectual property. When you can own those valuable and strategic differentiators that really enable your business to compete and get people to set up and notice you. That’s a really critical component in growth and success, particularly when you’re looking on a global stage, which is very typical in the cleantech sphere. A cleantech company is not planning, generally speaking, to just operate in Canada. There’s a large playing field across the world while we’re all driving towards a net zero component. So, it’s really critical to think on that global stage. And I want to share a couple of data points on this piece because over the last 20 years, non-Canadian companies have filed more than 3 times the number of patents than Canadian companies. It’s probably actually a lot bigger than 3. And when we look at the data that’s within our smart grid report, our study revealed that of the 38,000 patents that were filed around the world in this markets sector, only 178 were Canadian owned. I’m not going to do the math to show you the percentage there, but it’s really small. And so when we see Canada represents such a small percentage, it’s a really, an indicator that Canadian companies aren’t necessarily recognizing intellectual property as a mechanism to enable them to compete in these global value chains. So, when, when they do all the hard work to come up with the innovation that really sets them apart and fail to take the ownership piece that can allow them to really compete, we really put ourselves at a disadvantage.
Lisa: I’ll just have to let those numbers sink in for a little bit, I think. That’s quite concerning actually, and you’re right, representing less than 1% is kind of scary. So from a global versus Canadian perspective then, what does this mean? Are Canadian SMEs at risk here?
Erin: I wish my answer was no, but yes. We’re, we are at risk because we lack competitiveness in the crowded markets that are dominated by foreign patent holders. And it’s a real problem. The good news is that, you know, there’s a ton of focus right now in Canada, our program through ISED, and we’ll talk a little bit later about some of the other programs in Canada. But there’s a real focus on how can we help Canadian companies compete on the global stage. How can we build more Canadian success stories and so, let’s take a quick look at a company. While not Canadian, I think they’re a good example is Nest. So, I think most people have heard of Nest, they’re in the thermostat space and Nest emerged back in 2012 as a bit of a disruptor in the market. But really short time into their operation, they were faced with a patent infringement suit by a large multinational. And at the time, they had a really limited patent portfolio. And so, when you look at that data, and you think about that last 1%, they were potentially really at risk about being forced out of the market if they couldn’t create a position for themselves in order to be able to compete. And so, potentially understanding that market before you just go ahead and hit the market, really understanding what those IP ownership positions of the other players are and having a plan in advance can really be critical when it comes to being able to compete. And we’ll get back to this later because, we know they survived the story, so there’s more to it. But companies without IP protection can really be more vulnerable when it comes to legal action, and building awareness of intellectual property as a business tool is really part of the solution. We need to build IP literacy among Canadian business leaders so they think about IP as a business tool, not that drives business, but a lever they can pull on in negotiations. It can’t be a back-end function that arises as an afterthought. It’s got to be integrated up front so they can proactively address risks and develop strong IP strategies that can include securing rights so that they can compete.
Lisa: So let’s roll up our sleeves here and grab your pens if you’re listening, because I want to break this down into something that people can really use and take home. So it seems like thinking about an IP strategy, it has to be a focal point. But let’s break it down. And can you explain what key considerations an IP strategy should address?
Erin: I think critical here is that this is doable. Startups and SMEs in Canada, this is doable. You can, you can build IP strategies. And so, it really starts with understanding your technology, but not just the technology from the technical component, but understanding what allows that technology to stand out. Everybody starts their business for a reason, they have this like moment. They’re solving a problem that’s out there. So really make sure you can clearly delineate how your product’s different, and what is it about all the components of your technology that really allows you to stand apart? Make sure you can sort of document your road map and consider not just where you are today, but where you want to go. You don’t have to have figured out how you want to get there, but you want to be able to explain the direction you’re heading in. So that’s the technology piece. The next real component that you need to understand when it comes to building an IP strategy is, what is your business value? Like what exactly is the value proposition for your company? How is it what you’re producing? What? Be it a service, be it technology, be it a product, whatever it is, how does it address the market need? What are those pain points that your solution is offering? To solve the challenges that face your potential end customers to date. And then, really be able to delineate what are your business objectives, are you selling to the end user yourself? Are you integrated into a larger product, so you’re sort of like an intermediary from that perspective. Do you want to really take full ownership of that market? Are you thinking you’re going to license? Really be able to document these pieces of how you want to think about building your own space there. And based on your objectives, you want to be really clear about who else is playing in that market, who else is out there and that leads into the next piece. So once you understand who your customers, competitors, suppliers are, anyone that’s really on that value chain, you want to think about what is the opportunity that’s available to me. This is really when it comes to you want to understand your market. Usually, we’re talking about patents here because that’s a big player, particularly in the cleantech space, but who else is out there? Who else holds IP positions that can potentially impede or force you to work around them on your path to commercialization? Where are the opportunities where you can create an ownership position about what sets you apart. And all those things combined together really help you build a solid IP strategy. When you’re starting to build that strategy and starting to think about those IP assets, you typically want to start at the central point where all those 3 components intersect. What opportunity is available? That’s really linked to that business value you can provide that is mapped right to one of your key differentiators that set you apart. When you focus your IP and understanding those components, you can really start building a value-added strategy. But there’s a couple of things you need to keep in mind, particularly when you’re thinking about patents in that it’s a real common misconception that if you own a patent that relates to your technology that you automatically have the ability to commercialize. But unfortunately, patents, and I know you’ve talked about this on a previous podcast, they’re negative rights. So, it gives you the ability to exclude but not necessarily the ability to practice. That’s why it’s so important that you need to understand your own landscape and what roadblocks might stand in your way. And when you take all these considerations into account, you can build a strategy that’s really going to drive value. And it’s not static, it’s going to evolve overtime. It’s that plan you need to revisit, your company is going to pivot. You’re going to make changes, maybe a key aspect of your technology isn’t working the way you thought it would. You revisit your strategy, reposition, pivot and continue to move forward.
Lisa: Thanks for sharing those different components and considerations with me and our listeners. Let’s talk about where the rubber really meets the road then. Can you talk about having an IP strategy and how that drives value to the business and use some tangible examples?
Erin: Yeah, absolutely. So, let’s be clear and level set, you don’t need a patent. For, in order for your business to exist. But IP can drive value when you’ve done some thinking up front, because as I mentioned before, nobody operates in a vacuum. You know, just like in life, we’re a product of our environment and we can’t control everything. But knowing your environment can alert us to potential risks and flag potential opportunities. So just like you wouldn’t start a business without a business plan that considers the market, you need to do the same with an IP strategy. So let’s fast forward and let’s look at a true Canadian example. Depending on when you listeners were born, you may have heard of a company called Mitel Networks. They were started back in the 70s, a huge player in the 80s and early 90s. And Mitel had developed a foundational video conferencing technology, and this was before COVID, before we worked online, before we filmed podcasts like this virtually. In that it really enabled powerful communication tool and now if you look to today, companies like Teams, Zoom, these are tools we use every day. But where’s Mitel? They’re not on the map anymore, because while nobody really publishes an IP strategy, it seems that they’ve missed a real valuable opportunity by not recognizing the strategic potential of their video conferencing technology on a global scale. So now this market is controlled by foreign entities. So, this is really a story of lost opportunity, around the importance of building a suite of assets that can protect the value of your product. And not just about today, but where your product could go like thinking big picture, where could it possibly go and make sure you’re considering that because maybe with a different strategy in place, the story could have been different. Maybe Mitel is still in existence today, so it’s really important to keep that in mind, because risk often comes externally. It comes from the external market, from third parties operating your business space like I said, competitors, suppliers, customers, large corporate asserters. All these entities typically own IP and so, when you’re entering a market and you’re starting a business, you have to understand what that landscape looks like. So, when a company is entering a market that has some larger players, you need to have awareness of the potential impediments. So, let’s go back to the story of Nest, because that has a little bit of a different outcome. So, I mentioned before they were sued a couple of years into existence by a large multinational. However, they were live to this being a potential issue, and as a result, they actually purchased a suite of IP assets that were very relevant to their opponent and they were able to negotiate a settlement. And so while you know, often it takes SMEs 5 to 10 years to actually become noticeable and recognizable enough to disrupt the market. To attract lawsuits, Nest was pretty early in the game. However, they were able to mitigate that risk and you know, they still exist today. So, many IP battles, though, it’s not something you necessarily see on the front pages. Litigation can be front page news, but often things happen behind closed doors and when you start making revenue, that can be a trigger for your risk and so building a strategy that understands what your eventual risk might look like can really set you up for success down the road. In this case, Nest had a clear I.P. strategy that included a solid understanding of their markets and threats they could be facing, and they had a plan to address that when it happened. So, really the end result of this is, a key thing to remember is the importance of setting aside time to build a strategy as you’re building your business strategy. It doesn’t have to be a 20-page comprehensive document when you start. It can start with those few basic bullet points of, “Here are my objectives, here’s what really sets me apart,” and making sure you’re communicating this. To your teams internally, to make sure they maintain confidentiality around those assets, and to your legal people, to make sure they’re protecting those assets and any business negotiations and agreements you’re setting in place, to your leadership team when they’re out there talking and selling your company, making sure they understand what they can disclose, how far they can go. And so, you can really create that path to commercialization for Canadian companies.
Lisa: So we’ve talked about what a strategy includes and how it adds value, and I think there’s plenty of web pages, CIPO, yourselves, that explains the different steps that you can take when you’re starting getting started on an IP strategy. But you obviously have a whole team of IP experts. I want to hear you explain to an entrepreneur, “How can I get started on my IP strategy?”
Erin: Yeah, that’s a great question. I think it can be really overwhelming when you’re getting going, especially remembering that you’re not just building your IP strategy, you’re trying to build a whole business. So, I love to just start with, you just start with bullet points. Maybe you’ve got an Excel spreadsheet and you’re starting to populate it and send it, grow over time. So you want to layout your business objectives. Make sure it’s clear. Make sure you’re clearly communicating what you’re looking to achieve, and then understand what are the markets that are relevant to the space you’re working on. Nobody can protect their IP everywhere, so you really need to understand which markets are most relevant for you and then understand what the players are out there. So, you start with this spreadsheet. You’ve clearly documented what your objectives are, where you want to go, you’ve documented where you want to go and the why beside that, and then you can start by doing a little bit of searching on your own. Yes, comprehensive patent searching. You probably want to engage an expert. But there’s a lot of free searching tools out there, both free and paid options that can help entrepreneurs explore their IP environment that exists in their industry. CIPO is a great example. There is a patent search tool as part of CIPO. You can use WIPO to search through the PCT applications. Google Patents is another option. There’s a lot of tools out there, so a lot of getting started is about doing your homework. Spend a bit of time exploring your space, get a sense of what’s happening out there, use the studies out there. I know, as Lisa mentioned, we have some of our reports that are available for some cleantech sectors, but there’s a lot of data that’s available when you can start looking and understand how to do the searching.
Lisa: Absolutely. And some of these free tools actually have really nice visualizations where you can sort of drill down and you don’t need to be an expert to get started on these. So yeah, very, very good points. Now, let’s talk a little bit more about the IP ecosystems and who the main players are here. How do Canadian companies access the kind of help that you just explained that you might need on your journey to get an IP strategy.
Erin: Yeah, I love this question. I think it’s so important to sort of understand that landscape and I’m going to talk a little bit about how all of us players within the landscape can make it even easier for companies, Canadian companies looking to build out their own IP strategies. So, since the launch of Canada’s national IP strategy in 2018, there’s really been an increased focus on building IP resourcing in Canada. So, this is great news for Canadian companies. But the IP ecosystem, I think you can boil it down to really having 2 key groups. You’ve got the funders, the ones that are providing big dollars to help the companies build out their R&D, build out their products, their prototypes, and then you’ve got the capacity builder organizations that are looking to build skill sets. Now there are some organizations that will fall broadly into both categories, but that’s typically related to more small dollar funding as opposed to the big dollar funding that’s tied to like really doing product development and R&D. But for entrepreneurs and SMEs that are navigating this ecosystem, they rely on both types of organizations as they grow to scale, because you need both funding and skilling. So funder organizations, generally speaking, provide large-scale R&D, product development, commercialization funding and you’ve got large federal programs, maybe like IRAP, the Strategic Innovation Fund. You’ll have provincial programs depending on where you’re located: Alberta Innovates, I’m in Alberta. There’s Ontario Centre of Excellence. There’s CICE in BC, but there’s a lot. And then you have venture support that comes from, maybe BDC, maybe a MaRS accelerator fund, Economic Development Canada, EDC, RBC Ventures. There’s lots. So you’ve got all those suite of large vendor organizations, and then you have the capacity builder organizations. These are focused on building IP capacity within the ecosystem. And how they go about capacity building can be quite different. Some of it is initial awareness, introductory education, delivery and maybe all the way through to expert level training and certification. Now, hey, I’m on the call today with CIPO and CIPO is a great example of a federal program that’s really focused on building IP capacity in Canada. But then you also have federal programs like IAC, ElevateIP is a new program that was launched federally. Then you have provincial programs and organizations like IPON, Innovate BC, Axelys, and then of course can't do any of the work without your service providers and those IP experts, and you have organizations in that realm like IPIC, CPATA, which is the governing regulator for patent and trademark agents in Canada. And then you have your innovation hubs, so all those smaller entities. And all this means is that’s a lot of places for SMEs to need to look and understand where they can go for resourcing where they are. So, Canada is really looking to provide broad resources for businesses to be able to increase their understanding IP, including expert advice, and it’s also focused on making IP tools more accessible and available. But the efforts can be fragmented because there’s so many different organizations that can have overlapping mandates. And despite best efforts, this really can lead to making it tough for those SMEs to navigate this vast ecosystem of different actors and figure out which programs are most relevant for their business. As everybody knows, when you’re starting a business, you’re a little time constrained, you’re trying to do a lot of things. And so trying to figure out and spend considerable time to sit through and piece together this information can be tough. I believe the solution to this challenge is collaboration and being able to be on this podcast today and talk about CIPO and talk about IAC is a great first step. We at IAC are actively working to foster collaborative partnerships with complementary players across the ecosystem, really aimed at creating mutual value and streamlining its support. Particularly around IP capacity building. A key example of one of the things that we’re working on is a collaboration with the large-scale ElevateIP program, which was federally funded. We’re using some of our capacity-building components to provide education to the funded proponents within the ElevateIP program. So really allowing us to expand our capacity building efforts into the business accelerators and incubators that are often the first point of contact for entrepreneurs and SMEs. But the challenge continues to exist. We need to build IP capacity. No one entity can do it all. There are a lot of potential Canadian success stories just waiting to flourish, and so I think a key objective for our ecosystem is for us to continue that collaborative effort, continue to build relationships that allow the SMEs to be able to more fluidly navigate this space.
Lisa: 100% and thanks for mentioning collaboration. Obviously, this is one example of the collaborations and I think it’s important for the listeners to know that these organizations know each other. We know each other’s face and so if anyone hears this and they’re not quite sure how to reach out, reach out to any one of them, and we can guide you to the right organization. Because we do collaborate and I’m looking forward to seeing IAC and the other organizations helping Canadian SMEs increase their footprint in the space of IP. So, Erin with that, I would like to thank you so much for sharing your very valuable expertise in this space and I wish you and your colleagues at IAC the best of luck and I hope our paths will cross many times. Thank you so much.
Erin: Thank you so much Lisa for the opportunity to be on the podcast today.