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Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue No. 12 - Evidence - February 1, 2017


OTTAWA, Wednesday, February 1, 2017

The Standing Senate Committee on Banking, Trade and Commerce met this day at 4:17 p.m., in public, for the consideration of Canadian Intellectual Property Office's User Fee Proposal, dated September 2016, for changes to patent fees, pursuant to the User Fees Act, S.C. 2004, c. 6, sbs. 4(2); and Canadian Intellectual Property Office's User Fee Proposal, dated September 2016, for changes to trademark fees, pursuant to the User Fees Act, S.C. 2004, c. 6, sbs. 4(2); and, in camera, for the consideration of a draft agenda (future business).

Senator David Tkachuk (Chair) in the chair.

[English]

The Chair: I will call the meeting to order. We have two brand new senators that have been appointed to the Banking Committee: Senator Plett, from Manitoba, and Senator Moncion, from Ontario. Welcome to the committee.

We have Senator Marshall replacing Senator Smith. Senator Patterson from Nunavut is replacing Senator Tannas.

My name is David Tkachuk, and I am the chair of the committee. Further to the adoption by the Senate of the fifth report of the Selection Committee, I am pleased to welcome Senator Wallin from Saskatchewan as well.

We are meeting to examine two user fee proposals put forward by the Canadian Intellectual Property Office, one that deals with changes to patent fees and the other dealing with changes to trademark fees.

I will review why we are doing this because this is a bit unusual. If you will indulge me, user fees are imposed by a regulatory authority to provide a variety of government services to Canadians, from entry fees to national parks to passport application fees to fishing licence fees and pardon application fees, among a number of others.

When I was in opposition previous to us being in government in 2006, I used to rail against user fees as another tax. Now I will do it again after a nine-year absence.

In March 2004, the User Fees Act was enacted by Parliament. The act requires that all proposals by a regulating authority to fix or change the rate of a user fee be tabled by both the Senate and the House of Commons and be referred to the chambers' appropriate committees, which is where we are today.

Once referred, a committee has 20 sitting days to report on the proposal, and if no report is tabled, the user fee proposal is deemed recommended. Although the act does not oblige Senate committees to report on user fee proposals, Senate committees have in the past often held hearings and invited witnesses to comment.

The last time this committee reviewed a user fee proposal was November 2010 when it reported to the Senate that it examined the proposal and recommended it be approved.

Honourable senators, I think we should do it again once the witnesses have finished their testimony.

During the first part of our meeting, to brief the committee on these user fee proposals, I am pleased to welcome from the Canadian Intellectual Property Office of Innovation, Science and Economic Development Canada, Agnes L. Lajoie, Director General and Assistant Commissioner of Patents, Patent Branch; Konstantinos Georgaras, Director General, Corporate Strategies and Services Branch; and Mesmin Pierre, Director General, Trade-marks Branch.

Thank you for joining us today. Please proceed with your opening remarks, after which we will go to the question and answer session.

Konstantinos Georgaras, Director General, Corporate Strategies and Services Branch, Canadian Intellectual Property Office, Innovation, Science and Economic Development Canada: We did have a presentation that was circulated to the committee and I see that people have it. I assume you have had some time to flip through it. We will focus on just a few slides.

I would like to focus on four areas, in particular. I would like to give you a bit of context of who we are at the Canadian Intellectual Property Office, or CIPO, and our customer base. I will then focus on the importance of us joining five international IP treaties and, from that, the requirement to harmonize our regulations, including changes to our fees. I will then give you a brief snapshot of where we are in the process of these legislative and regulatory changes. I will then turn to my colleagues to provide more detail on the specific fee adjustments before you today.

On slide 2, CIPO is a special operating agency of Innovation, Science and Economic Development. We have about 950 employees. We operate under a revolving fund authority and we are fully financed by user fees. Our revenues are approximately $150 million per year. Our accountabilities are through reports to Parliament annually, as well as financial statements that are reviewed by external auditors. We also meet service standards.

I will skip to slide 4. To give you a sense of our customers, we have about 100,000 IP applications per year. That is spread across patents, trademarks, industrial designs as well as copyright.

Slide 5 will give you a better picture of where our customers come from. What is interesting is that most of the people who apply at CIPO come from outside of Canada. In fact, an example is that 88 per cent of our patent applications come from outside of Canada. Likewise, most Canadians will file outside of Canada in other jurisdictions.

So business is very much global. R&D and innovation are global, as is intellectual property. Our business strategy is to catch up how businesses are operating. To do that, we are planning to join five international intellectual property treaties that will help us catch up to these businesses and where they are operating.

On slide 6, there is a bit of detail on the treaties themselves. Five are administered by the World Intellectual Property Organization, which is a United Nations body dealing with IP. We are planning to join the five treaties as follows: Singapore Treaty, Madrid Protocol and the Nice Agreement related to trademarks, the Patent Law Treaty related to patents, and The Hague Agreement related to industrial designs.

Senator Day: I think we are out of sync in numbers. You said slide 6, but it is slide 7 in the deck you have given us. I wanted to make sure there wasn't some confusion here. You are now talking about the treaties, which is slide 7.

Mr. Georgaras: Yes. In fact, both slide 6 and 7 touch on the treaties.

The Chair: I am following him, Senator Day.

Senator Day: If you are, that is all that matters.

Mr. Georgaras: Let's move to slide 7, which has four pictures of the globe on it.

Senator Day: That is fine; I am just one page out of sync with you.

The Chair: Go ahead.

Mr. Georgaras: I am on the slide that has four pictures of globes on it. These represent countries that have joined these international treaties. I will give you an example.

On the top left corner, there is a picture of countries that have joined the Madrid Protocol that is related to trademarks. You will see that 98 countries have already joined Madrid. We are planning to join as well. The impact will be direct and very significant for businesses once we do join. I will give you an example.

If a company wishes to seek a trademark in the U.S., China and France, they would have to apply three different times, with three different forms, three different currencies and different languages. That is the present system. Once we join the Madrid Protocol they would just need to file once, one form. It will be a direct reduction of paper burden.

So that is Canadians filing outside of Canada. The inverse is also true. For companies in countries that are part of the Madrid Protocol, they can file in multiple countries, and if they want to file in Canada, it would need to be a completely separate process. Once we join the Madrid Protocol, we would be part of a list where they would tick off that they want to go into Canada as well. It will actually facilitate companies wishing to come here.

That is on the trademark side. It is similar on the industrial design side. That is why we are here today. For us to join these treaties, we have to change our laws and regulations, synchronize and harmonize to these treaties. An important part of that is making some fee adjustments so that we can be consistent with other jurisdictions. These are the fee proposals we are bringing forward today.

I will move to slide 8, which gives us a snapshot of where we are in the process. We have done a lot of work to get to today.

In terms of work we have completed, in 2014 we tabled in Parliament explanatory memoranda on the various treaties. We have changed our laws two times, in 2014 through Bill C-31 and Bill C-43, to allow us to accede to these treaties. We also made important changes in 2015 under Bill C-59 that introduced important safeguards on the patent side. My colleague can elaborate on that momentarily.

We then launched into significant consultations to get expert views on how to best join these treaties. In fact, one of the treaties, the Nice Agreement, which is a classification treaty, we have already put into action. That was in 2015.

At the same time, we have done a number of regulatory drafting packages. A lot of work has been done there.

In terms of harmonizing our regulations, we came across come fees that needed to be changed, which triggered the User Fees Act. That launched a process, as the chair described, where we consulted with Canadians and we concluded our consultations in July of last year. We received quite a bit of feedback and would be happy to share that during the subsequent question period.

We tabled the fee changes in Parliament in November of last year. As the chair mentioned, this is during the 20-day period where the fees can be reviewed by committee. That's where we are today. It is an important juncture for us because once we receive your recommendations and advice, we will then be able to proceed to build any fee changes into our regulatory packages. The regulatory packages will go through the regular gazetting process, and that will allow us to eventually join the treaties. Our target date is to join all five treaties by early 2019.

Before I turn the floor over to my colleagues to give us more detail on the specific fee changes, I want to give you a bit of background on how we developed them. As I mentioned, CIPO operates under a revolving fund authority. We do follow Treasury Board of Canada Secretariat policies on special revenue-spending authorities, and those have clear rules that our user fees need to be directly related to our costs.

With that, we have developed a robust methodology over the last decade or so. It's called activity-based costing, where we identify all of our costs in the organization and assign them directly to the IP rights that we grant. With this, we have a very clear sense of what it costs us to deliver the rights. From that, our fees are determined.

What is important in terms of the fee changes that we have made here and have before you is that they were designed to be financially neutral, or revenue neutral. We assessed what it would cost to deliver these IP rights under the proposed regime, and that became the upper limit of what we would charge. We then went through a number of scenarios. From that, we selected the fees that would bring us to a revenue-neutral position.

Also, considerations were brought to mind in terms of our fees. We needed to ensure that we would maintain our service standards in terms of the quality of work we do. That is very important. Customers need to know they are entering the marketplace with quality IP rights. It is also about maintaining our service standards around timeliness so that we can meet our clients' needs.

Other important considerations are that we had to adhere to the treaties themselves and the structures. We also based our fees and approaches based on how other countries have structured their services and fees. As I mentioned, most of our business comes from abroad, and we do want to ensure consistency with other jurisdictions.

Those are the guiding principles we followed to develop the fee proposals before you today.

At this point I would like to turn to my colleagues, who will give you more information on what the fee adjustments are and what the impact will be.

Mesmin Pierre, Director General, Trade-marks Branch, Innovation, Science and Economic Development Canada: For trademarks, there are two key proposed changes. First, the registration regime is currently a two-step process that consists of filing and registration, each with their own fee. To reduce administrative burdens, to help innovators and businesses obtain registration faster and to ensure greater market certainty, CIPO proposes to merge the application fee and the registration fee so that innovators and businesses will only have to pay one application fee.

Second, in order to comply with the Singapore Treaty, Canada must use Nice classification, which is an international system used to group and class goods and services. For example, different classes include those for machines, clothing, furniture, real estate or financial services. To encourage applicants to only focus on goods and services that they truly use and to avoid cluttering the trademark register, CIPO proposes to introduce a fee per Nice class.

I will turn to the slide entitled "Effect on Trademark Applicants.'' Let's take a look at the proposed fee structure.

The proposed fees will have innovators and businesses pay the base application fee of $330. This fee includes the first class of goods and services that they wish. Any additional class will cost $100. These changes are in line with our international best practices and are expected to decrease Canadian filing fees for an important portion of trademark applicants.

We have done our analysis and it shows that 67 per cent of innovators and businesses file an application for one or two classes. As a direct result of these proposed changes, the applicant will pay either $20 less or $120 than they currently do to register a trademark in Canada.

With respect to renewing a trademark, the fee will increase, and it will also be based on the number of classes. The purpose of this increase is to ensure that trademark owners only renew valuable trademarks that are actually in use in the Canadian marketplace.

The international comparison that we did reveals that the proposed new fees are not out of line with other countries, and any substantial differences that we may see are to the advantage of innovators and businesses. To ensure that the comparison that we did was relevant, the proposed fees were compared with those of countries that use the similar system that we do here in Canada. For example, some countries do not perform examination with respect to trademark application as we do in Canada.

In closing, the majority of innovators and business that use the Canadian trademark system will see a decrease in their user filing fees when they wish to obtain this type of protection here in Canada.

Agnes L. Lajoie, Director General and Assistant Commissioner of Patents, Patent Branch, Canadian Intellectual Property Office, Innovation, Science and Economic Development Canada: I will talk a bit more about the changes to the patent fee structure. It is important to start by mentioning that the Patent Law Treaty — and I will use the acronym PLT — does not introduce a new international filing system like the Madrid Protocol. Instead, it aligns the administrative procedures of patent offices and helps reduce the administrative burden borne by an applicant.

There are three key changes. The first one is related to the introduction of a late fee at various points in the life of a patent. This is there to create an incentive for applicants to address missed deadlines quickly in order to balance a safety net for applicants with the need for market certainty. Under the PLT, we are adding a six-month grace period, and we want to encourage positive behaviour by encouraging people to act as soon as possible.

These late fees will only affect applicants who missed the deadline to pay their maintenance or application fees, or request examination of their application.

There will also be changes to the scope of two existing fee-based services for correcting errors in a patent and for making amendments to an application prior to it being issued. We propose to maintain the existing fee level for these services. It is only the scope of the service that is changing.

In the first case, applicants will be able to fix obvious errors where currently only clerical errors can be corrected. Applicants will benefit from a less restrictive process for making amendments after the allowance of the application. These changes actually stem not from the PLT but from the additional amendments that my colleague mentioned that were made in 2015 to modernize the IP administration under Bill C-59.

I want to talk a bit more about the effect on the patent applicants and others, because these changes do not affect a lot; only a small volume of our clients are affected by these changes, because the vast majority of applicants will not have to pay those fees. It is only when there are missed deadlines or mistakes that those application fees occur.

A couple examples to compare with the system: Applications can be abandoned if a fee is not paid, and for 12 months they can reinstate the application for a fee of $200. We have a six-month grace period; for six months, the applicant can correct the mistake of not paying a fee, and the late fee is $150. In fact the late fee for the first six months is lower than the actual fee to reinstate the application. It is only when an applicant of a patent does not take the benefit of this six-month window of time, after that, it may cost more. But, again, this is built in to provide an incentive for the applicant to pay on time and ensure market certainty.

We expect that the late fees will affect less than 1 per cent of our clients. Again, it is based on their behaviour.

For the other changes, the "correction of error'' fee already exists, and it's only more opportunities to correct errors. There again, it's a very low volume transaction; less than 1 per cent of our potential patentees can be affected by that.

Again, it is similar for the amendment after allowance. It's when an application is considered patentable and the examiner allows it. Before it's granted, there's a window of time where it's possible to amend an application. Right now, there's a two-period process that is a bit confusing, so we are streamlining that and just maintaining a more efficient path with the existing fee of $400. Very, very low volume again, less than 2 per cent of applications that are allowed, but it's to provide more flexibility and more certainty with our process.

Mr. Georgaras: Thank you, Agnes.

In summary, the fee proposals before you today will allow us to join five international intellectual property treaties that will be a game-changer for Canadian companies and innovators. They will also allow us to introduce safeguards so that people don't inadvertently lose their rights along the way.

As I mentioned, the fees were designed to be revenue neutral, and they are based on a very sound activity-based costing model and activity-based management model. Ultimately, this is to help innovators to compete globally and to also support foreign companies wishing to come to Canada.

So the two fee proposals are now with you for review and recommendation. With your review and thoughts, we would then proceed to move forward with the regulatory process.

We would be happy to take any questions.

The Chair: Thank you.

Senator Marshall: I want to talk about your statement that it's going to be revenue neutral. Can you tell us, first of all, when will the fees kick in? When will they become effective? What are you proposing?

Mr. Georgaras: The fees will become effective after we join the treaties, so we are targeting early 2019.

Senator Marshall: Are you expecting the revenues to be in the vicinity of $150 million, pretty consistent with what they have been in previous years?

Mr. Georgaras: That is correct. That amount has been stable over a number of years. There have been some fluctuations because of either changing market conditions or things like that, but that is generally the amount that we're working with.

Senator Marshall: So the revenues are going to be neutral. Where do you expect your expenditures to go?

Mr. Georgaras: In the end, it will net out in terms of being neutral.

We have done quite a bit of forecasting to understand the uptake and use of the international systems. We have based that on looking at a number of other countries who have recently joined the treaties, and that's helped us to develop a forecasting model for that.

Just to step back, we do operate under a revolving fund authority. We were established that way so that our operations can grow or shrink depending on the market demands.

Senator Marshall: I'm questioning your numbers because they don't make sense. The information in our briefing notes indicates that in 2018-19 and 2020-21, you're expecting to generate a surplus of 0.7 million, which is $700,000. But when I look at the numbers for 2014-15, you actually had a surplus of $9.6 million, which is quite a bit different from what you're projecting into the future.

Also, if you look at the numbers for 2015-16, you had a deficit of about $6 million. It just seems like the numbers don't jibe.

Mr. Georgaras: I will say that, as to the revolving fund, an important part of it when we were established as part of the Treasury Board's submission, allowed us to run a surplus for the purposes of capital expenditures, specifically on information technology. So for the last few years, we have not made the kinds of investments that we need to have a modern IT system. In fact, part of joining the treaties necessitates us making those investments. So the surpluses that we have carried forward have been specific to building that capital base so that we can make that investment.

Senator Marshall: Do you think that you are going to maintain that surplus to make your capital investment? You're saying it's going to be revenue neutral. Your expenses are definitely going to go up because I would say that a lot of your expenses are in the area of salaries. Do you think that the numbers you are giving us are realistic?

Mr. Georgaras: We do have estimates for the IT investments.

I'm not sure if you want to jump in on the trademark side.

Mr. Pierre: Yes, thank you.

Indeed, as Konstantinos indicated, when we were doing the forecasting, we factored in the investments that are necessary for information technology that will facilitate the joining of a treaty.

The majority of the investments are required for the trademark system to be updated. Once that investment is actualized, the surplus that you mentioned will actually level off. So this is a key investment that is necessary for, specifically, the trademark branch to move forward, given that we need to not necessarily harmonize but ensure that our systems are able to communicate with the World Intellectual Property Organization, as well as entities that are communicating and interacting with the trademark branch and CIPO. When that investment is done, we should see a levelling off or tapering off of the surplus.

Senator Marshall: I won't belabour the point, Mr. Chair. It just seems that the numbers are unrealistic.

Senator Ringuette: I will try to be succinct in following your slide presentation. With regard to trademark and patents and industrial designs, you have a treaty, and you're moving forward to having the same standards or benchmarks. You have provided to us only two examples of where you are proposing to change the fees, and that is for trademarks and patents. That leaves, in your sphere of operation, industrial design and copyright. There's no treaty with regard to copyright, so am I right in assuming that there are no fee changes?

My second question is this: What are the fee changes for industrial design that are not in what you are giving us today as information?

Chair, if I may, I might as well put another question.

The Chair: Go right ahead.

Senator Ringuette: Very importantly, as to the five world treaties, are the countries of the EU members of these treaties? It is very important with regard to the Canada-EU trade agreement and also the volume that may be addressed to your office in the future and the fees that you may or may not be collecting.

Mr. Pierre: Thank you, senator. I'll take the first question and maybe my colleague will take the second.

Indeed, there are no proposed fee changes with respect to copyright out of this exercise.

Regarding industrial design, although we are planning to join The Hague Agreement — the time frame was stated by my colleague — there are no proposed fee changes either. After a sound analysis, the organization decided that the differences were so minute that it did not make sense to pursue that avenue. Therefore, the fees will remain as they are currently set in the act.

Mr. Georgaras: With regard to your question about members from European countries, yes, many European countries are members of these treaties. There is also a European IP office that looks at trademarks, as well as a European Patent Office. They have their own overarching coordination across Europe.

The individual countries are part of these treaties at two levels, as well as the coordinating bodies — the European Patent Office and European IP office.

Senator Ringuette: As a follow-up question to this EU situation, because I think it's very important in the next decade for us to get it right, will you be coordinating registration and application with the European body for our Canadian companies, and vice versa?

Mr. Georgaras: Yes. We do have very good deep relations with the EU IP office on trademarks, as well as the European Patent Office. More recently on the European Patent Office we signed a mutual recognition agreement, so the cooperation is very deep. With regard to these treaties themselves, of course as members they can access them and we would support Canadian companies accessing the European market.

Senator Ringuette: I guess the ultimate question is will a Canadian company wanting to register a trademark in the EU have to make one application to the EU central body or will they have to have a slate of the 48 European countries, 48 applications with all the fees? If that's the case, it's a great disservice, so it should be negotiated.

Mr. Pierre: When we look at the purpose of Canada joining the treaties, it's to take advantage of the WIPO international filing system, where businesses and innovators wishing to obtain IP protection — in my case a trademark or industrial design, as you referred to it — by accessing Hague or the Madrid system, they would file in one location, using one currency and identify multiple countries. Once we become a member of the treaty, they would be able to access Canada without having to file a separate application with us or, vice versa, a Canadian company wanting to go into a different market having to file multiple applications in different locales.

This is the purpose of us joining those international treaties with respect to filing for protection on trademarks and industrial design.

Ms. Lajoie: I would like to speak about the experience we have had on the patent side of having an international filing system. In 1990, we ratified the Patent Cooperation Treaty. Of course, it was very new for us to process international applications, and it was the same for Canadian applicants. In those days, only a few hundred clients were using this service. Now, after more than 25 years, I can say that more than half of the Canadian patent applicants file through the international route, which has the effect of having one application filed in Canada but it has an effect on all the member countries.

Of all the applications that we process in the patent office, more than 75 per cent come through the PCT route, which is an applicant from the States or from Spain that has used the international route.

So the treaties are working very well on both sides. For Canadians who want to file abroad, of course it takes some years to ramp up, but we have experience and expertise at CIPO in dealing with international applications under WIPO, the World Intellectual Property Office. This is very similar for my colleagues in trademarks, namely that the benefit will be similar to what we have been through since 1990.

Senator Black: I would like to go on the list for round two because I have some general questions about innovation, patents and intellectual property. While we have the witnesses here, we might as well tag them. Does that work for you?

The Chair: That works for me.

Senator Black: I appreciate the witnesses being here. I would observe — and I think this committee may want to observe — that this strikes me as a completely administrative manner. I'm just not sure why the Senate Banking Committee is sitting around — I'm not saying it's not important, but I'm just not sure that this is the best use of folks' time. I would just observe that this is strictly administrative. If we were to involve ourselves with every administrative decision in fees in the Government of Canada, there wouldn't be much time left in any day.

The Chair: I'll take that personally.

Senator Black: Oh, no. None of this is personal.

The Chair: I know, but we do have some obligation to at least look at it.

Senator Black: I appreciate you're following your statutory duties, and thank you very much for being here. I have a number of quick questions.

Why has Canada been so delayed in joining these treaties?

Mr. Georgaras: That's a very good question. We have been looking at them for a number of years. As my colleague Agnes Lajoie mentioned, we first joined the Patent Cooperation Treaty, and that was seen as the priority at the time. We have been working very hard to get on to the agenda to bring these other treaties forward, and we were fortunate enough in 2014 to have that opportunity. We have been working very hard to join, and now we're full force to implement.

Senator Black: Your testimony would be to this committee that Canada needs to belong to these treaties? We need to be signatories to these treaties, albeit delayed?

Mr. Georgaras: I would add that as more and more other countries join these treaties, we are getting left further and further behind.

Senator Black: Do your constituents care about these minor increases in these fees? Do you have any feedback you can share with us?

Mr. Georgaras: We did consult as part of the User Fees Act requirements. Those consultations were held in June and July of last year. We did use a number of ways to advertise the consultations, such as social media and our website. We sent letters to a number of associations.

At the end of the day, we ended up with nine submissions on the fee changes. The submissions came primarily from the professional community. There are two associations that represent intellectual property agents: the Intellectual Property Institute of Canada as well as FICPI, which is a federation of international IP agents. Those organizations represent many hundreds, if not thousands, of IP agents. We received advice from them. We received submissions from law firms and business associations as well.

The scope of the commentary was very technical and very helpful. We did not get any reaction in terms of the level of fees. In fact, compared to other countries we are comparable, if not cheaper, so there was no reaction about the overall cost.

Senator Black: Thank you very much.

Senator Wallin: My question was the same as Senator Black's, but now I want to pursue it a bit because this was for some countries since 2005 and then this received legislative approval in 2014. Your target date is 2019. What takes so long? Where's the clog in the system? I think we all agree it's a good idea to reduce the paper burden, encourage foreign investment, et cetera. It's just that it's a slow process.

Mr. Georgaras: I would agree. Everything we've heard from our customer base is that this is important; we need to join as quickly as possible.

We're also hearing that we need to get it right. We need to make the appropriate regulatory changes so that our systems are synchronized as much as possible. Part of our implementation process going forward from today and the advice of committee, we will enter into a rigorous regulatory drafting and setting process where we will again engage Canadians thoroughly.

Before we even get into the gazetting process, we will do pre-consultations to ensure we have received everyone's advice so that we can move forward quickly. I know two years from now sounds like a long time, but what we've heard from our customers is that we need to do it right. The time will also allow us to raise awareness of the benefits of using the treaties to allow companies to wrap up and start building this into their IP strategies and globally how they will proceed and manage their portfolios. It does sound like a long time.

Senator Wallin: I am wondering if there is something in the process, including having to make a stop here, which you are obliged to do. You said you fought long and hard to get on the agenda and then got there in 2014. Is that government writ large or is it department specific?

Mr. Georgaras: In this regard, certainly changing the laws to allow us to accede was an important step. What we found in the regulatory drafting process is that we are creating an entirely new system in some cases and that needs to be integrated. Essentially, we are designing that.

We've consulted widely with our counterparts internationally to ensure that we're building on best practices and their experience as well. Again, we want to get it right.

Mr. Pierre: If I may, when we look at our key trading partners in other jurisdictions, they have experienced similar timelines from five to over a decade, ten years. We're in that ballpark.

Senator Wallin: I'm glad you're patient people.

The Chair: It's not an uncomplicated matter. It is a very complicated matter.

Senator Enverga: I understand that these IP treaties are very important to us, especially to our industries and our businesses. I also would like to thank you for being here. This is actually very important because it highlights the need for us to have these treaties. It's a big necessity right now.

Right now we are way behind from the way I look at the map here. There's Madrid, The Hague and Nice in patent law treaty and we are not part of it. What happened?

Right now we have a lot of patents and a lot of our trademarks are there. What happens if we join this and there is a conflict? Is there any resolution? Who will resolve the issues when we are in there?

That is a complicated, two-part question.

Mr. Georgaras: Yes.

It is very much an international system. When we do an examination, we consider what is happening in other countries, and that's part of the due diligence that we do when we examine our applications.

Perhaps my colleague Agnes Lajoie can give more detail on how we coordinate internationally on the patent side.

Ms. Lajoie: Actually the systems are international filing systems, so we streamline the filing. But when it's time to grant a right, for example a patent right, the granting of a patent is in each jurisdiction. A patent is granted in Canada by the Canadian patent office and the U.S. PO for a U.S. patent. The granting is individual.

Of course, within each of our countries there are court systems so we have different jurisprudence. When there is infringement or conflicting situations, they are resolved at a national level and not under the treaty. I assume it's the same for trademarks, but this is the experience we've had for the Patent Corporation Treaty.

Mr. Pierre: When we look at how we administer the system here in Canada, and it is similar abroad, as my colleague just mentioned, it is national. But also internally there is the Patent Appeal Board and the Trademarks Opposition Board as well that try to resolve things when there is disagreement between our decisions and what the applicant expects before they have to engage in more expensive avenues, such as going to court.

At the national level we try to provide avenues for when there are conflicts to be resolved to the extent that we can, but there is an entire system as well.

The Chair: Take us through this; that might be helpful. Somebody from Yorkton, Saskatchewan, invents a new mousetrap. So he goes to the office and he or she wants to patent it. Tell me what takes place?

Ms. Lajoie: I assume that the inventor will establish his market. I'm sure he could make money in the United States, in China, in Canada and in a number of countries in Europe. That being done, he has to develop his protection strategy. It is very helpful to do that with a patent agent.

Then there is the drafting of the application, which is very important because you have to describe your invention in order for anyone to reproduce it.

The most important point is to draft claims. The claims are the fences that determine the protection; that is, what is so unique in your invention that you want to protect it and stop others from doing and using.

It is important to also do a prior search to ensure that you are the first. Again, if you do a search in the Canadian patent database or in the European database and you find something similar —

The Chair: Who does that? Do you do that or is the person who is actually filing the application responsible for that?

Ms. Lajoie: I would say both. It's very important to do a preliminary search before investing a lot of money in protecting your rights. It is very important that the applicant, either himself or with his agent, do this search to ensure that, "I haven't found anything, so I think I'm okay.'' But the determination of novelty is done at the patent office. It's both.

Once the application is ready to be filed, the strategy if there are many countries, then they can say, "I will use the Patent Cooperation Treaty and file one application in Canada under the PCT that can have effects on all the member countries.'' Then the application is filed and there is a filing date. It is very important to secure a filing date.

After that, an international search is done. In Canada it is by the Canadian patent office. Up to 30 months, there is a decision to be made whether the inventor wants to enter the national phase in the countries that he has made a determination that he wants a patent. This is what we call entering the national phase. This is when the dialogue starts with each of those offices.

The benefit of using the international system is that you first get one application and the effect of filing in many countries. You also get your filing date and an international search, which gives you an indication whether or not it is new and useful and inventive.

After that it's a business decision, if everything is positive, to continue to get the protection in each of the individual countries.

Senator Enverga: What if a business says it wants only to use the Madrid system because it covers more than they need? Can they opt out of other trademark systems to make sure they will have less cost?

Ms. Lajoie: I can speak for patent.

Mr. Pierre: I will speak for trademark. I want to make sure I understand your question.

When we look at IP, I will take an example — maybe this pen. There is a trademark; I can see it. There is an industrial design and there may be a patent, which is how the entire thing works and the design is just the look. But when they come to CIPO, they actually file for an industrial design separately from the patent and the same thing for a trademark. I think that was one element of your question.

If they are filing for a trademark and they want to use the Madrid system, as it was alluded to, then they select whichever country they would like to obtain protection under. Then if it comes to Canada, we will examine and render a decision.

Ms. Lajoie: If I may complement that information, if the market identified is limited to a few countries — let's say that the market is Canada and the U.S. — an inventor doesn't have to use the international route. It is not mandatory. You can file directly at one or two offices where you want protection. It is still an option.

You have a choice. The international avenue opens a lot of doors, or depending on the scope of your invention, you can limit it and deal directly with the offices that you are interested in getting protection from.

I don't know if that was your question, but I wanted to add this.

Senator Enverga: When I look at the map, the Madrid Protocol incorporates China. If there is any problem that might happen, it could be there or maybe some other place.

Mr. Georgaras: I would add one more thing. This is entirely user driven. It really is up to the individual company to decide which markets they want to go into and then which vehicle they want to use. As was mentioned, they may opt to use the PCT or Madrid system, or not.

It is complex. We have found that it is important to raise awareness of the treaties and help inform businesses so that they can make informed decisions as to which routes they should be using.

As I indicated earlier, a big part of our effort over the coming two years is to build those informational and educational products so that companies can make a decision themselves whether using the treaty route is appropriate for them.

Senator Day: I understand that the policy decision has already been made and that we will proceed into implementation of these various international treaties, and that was two or three years ago. You are in the process now of making changes that will allow Canada to ratify; is that where we are?

Mr. Georgaras: That is correct.

Senator Day: These changes to ratify lead me to follow up on Senator Marshall's question. Revenue will be generated as a result of these changes, more excess revenue, but is that not just a one-time thing to adjust and get ready? "Getting it right'' was your terminology. However, once you have done that, you have excess revenue that you don't need in order to implement because you have already implemented them. Can we expect that you will be back in a couple of years to reduce your fees?

Senator Ringuette: Nice try.

Mr. Georgaras: There are a couple of very important points, Senator Day.

I mentioned earlier that we have done forecasting to anticipate the uptake and use of the treaties. Our forecasts show us that on the trademark side, foreign companies wishing to come to Canada, approximately 48 per cent will be using the treaty route and others will be filing directly into Canada.

On the Canadian side, filing outside of Canada, we anticipate about 25 per cent of Canadians will be using that route. It makes sense. Most Canadians will file in Canada and the U.S. Other countries, soon after the U.S., are China and the European countries.

We are finding that the increase in filings outside of Canada and the U.S. by Canadians is increasing three times faster than the increase of filings outside of Canada. It is becoming a much more diverse application.

With that, we have anticipated there will be a slight, incremental increase overall of our trademark filings at about 5 per cent per year. Yes, that will lead to increased revenues, but that will also lead to increased costs for us to handle the new volume. Again, our fees are based on our costs, and those are variable. So if the economy goes down or up, our costs will follow the fees generated. In that sense, it will be revenue neutral.

In terms of a longer-term fee review, we are looking at a horizon of maybe three to five years.

One of the big drivers is to implement these treaties to see how our customer base will change over time, to introduce the information technology changes as well that may introduce new services, some efficiencies, et cetera, and allowing that to work through a business cycle.

To take one step back, we do operate under a revolving fund authority. We do operate on an accrual basis, and a lot of our business transfers from one year to another. Therefore, we have to plan out our books over a business cycle of three to five years. We are looking at a broader fee review in the coming years, yes.

Senator Day: I have forgotten the terminology you use for funding, but does the Treasury Board provide operating revenue and as you generate fees from filings, that goes to Treasury Board to balance off your account?

Mr. Georgaras: It is on an accrual basis. When fees come in for an application, for example, we cannot draw down on those resources until we do work. In fact, of the amounts we talked about earlier, we do have $66 million of deferred revenue. These are applications waiting for us to do work. So, yes, it is in the fund that we cannot access until we actually do work against the individual files.

Senator Day: I think it will be helpful for my colleagues to understand an international application, either a Patent Cooperation Treaty application or Madrid for trademark, and you just check off the countries you want to cover and you pay an extra fee for that. If it is a Canadian application and you wanted to cover the other areas, you get paid for doing the review and processing here, but you are also collecting funds for other countries. Do you charge a fee for that as well?

Ms. Lajoie: In the example you used, when PCT was first built and implemented, there was a fee per number of designated offices. Right now this fee has disappeared, so when you file it has the effect in each country.

Yes, we transfer fees to WIPO, the World Intellectual Property Organization, as the international bureau; they have the authority and they are doing some administrative work. Yes, we collect fees for WIPO, and the fees are determined based on the Swiss franc, and we transfer this money back to WIPO.

I think it will be the same for Madrid. There is a plan to collect money for WIPO, is there not?

Mr. Pierre: We are not an office of "receiving,'' from my understanding. It is from WIPO to us in one currency and we do not charge.

Senator Day: I have one fairly direct question, fairly specific. I need you to explain to us a trademark application. From the time you file to the time the patent is issued is roughly how long?

Mr. Pierre: Roughly 24 to 27 months currently. There is then a process where it is —

Senator Day: This is for a trademark?

Mr. Pierre: A trademark, yes.

Senator Day: And a patent?

Ms. Lajoie: For a patent the process is driven by the applicant. First of all, an application is filed, and we don't examine the patent application unless a request for examination is filed by the applicant. The applicant has up to five years. For us the clock really starts when we receive a request for examination.

Senator Day: But under these new rules, as I understand it, you are asking for the money that you might have received five or seven years later when the patent issues. You want it up front and it will be all together, application and approval.

Ms. Lajoie: This is a change for trademarks.

Senator Day: Not patents?

Ms. Lajoie: No.

Senator Day: Okay, two years then. You will get all the money up front whether or not the person decides to run the application through that two-year process?

Mr. Pierre: It is a little bit different for a trademark than it is for a patent. Once we receive a trademark application, it's very likely the applicant wants to pursue the trademark. Of course, they need to make a number of business decisions with respect to harmonizing the approval of their rights with other entities or organizations. However, we are following the international practices with respect to application fees with our trading partners, so it is the process that our trading partner offices use. Unless there is a deficiency in the application, we will perform the work and they will obtain the right.

Senator Day: Or opposition filed to it? You may decide not proceed because someone opposes it. Then you have lost all of your money, both the application and the registration fees. You have lost them both. Is it fair to Canadian companies to expect all that money up front and then have two years to find out whether they will get their registration?

Mr. Pierre: Well, I gave you a bit of an average. It can be faster, depending on how the organization wants to pursue their application. On average, this is what it is. Once we join the treaties, the time frame will shrink to about 18 months.

The decision with respect to the granting of a right when it is based on the regulations and requirements of the act is usually a decision to grant the right.

We don't have a high ratio of opposition. I don't have the exact figure right now, but it is not that high.

Senator Campbell: When did these treaties start? When did The Hague and Madrid treaties start? Why are we not in them? I'm looking at this and we are in none of them.

Ms. Lajoie: I can say a few words about the history of the Patent Law Treaty. There was discussion about harmonization of patent law many years ago. In 1990, there were efforts to harmonize the substantive aspect of patents. There was a realization globally that this was not possible, so the focus went to harmonization of administrative procedures. This is not what you are looking for?

Senator Campbell: No. I want to know why we aren't in them. Why are we not in these four treaties already?

Mr. Georgaras: The policy decisions have been made. We are moving as quickly as we can. One of the factors that have made it more urgent now is that so many countries have joined them. The Madrid Protocol was completed in 1989. It's over the last decade that a critical mass of countries has made it more important.

Senator Campbell: Did you say 1989?

Mr. Georgaras: In 1989, the Madrid Protocol was completed.

Senator Campbell: So basically 20 years ago.

Mr. Georgaras: Correct, and it took time for countries to join the treaty. Once a critical mass had joined, that then became important for us to pursue.

Senator Campbell: I'm from Yorkton and I come up with this great invention. It would seem to me that while I fool around with you guys for 24 months, somebody in another country is reverse engineering my product and putting it out there. By the time you finish in 18 to 27 months, all of the value of my patent is gone.

Ms. Lajoie: Actually, we have improved our turnaround time and our service level a lot over the last five years. Right now the first examiner's opinion can be obtained within 10 months after a request for examination is filed, which is six months faster than the United States. I am proud and happy to mention that.

Senator Campbell: Yes, but I don't care about what the United States does. I am just talking about a Canadian person who has an invention. When I look at this, you know what I say? Forget you guys; I am going to the market to produce this product and make it commercially viable so that I do not have to wait on that. I don't understand all the fees. I don't see any service here, quite frankly.

Ms. Lajoie: That is a business decision. But I want to add the fact that there is an accelerated process where a patent application can go really fast.

Senator Campbell: How much do I pay for that?

Ms. Lajoie: There are two routes. If it is related to green tech, it is free. If it is part of PPH, what we call the Patent Prosecution Highway, it is free. If you want to advance it outside of that, it is an additional $500. Again, it can be very fast if your application is in good condition.

The Chair: But if you file a patent on a product, once you file, doesn't that have some legal right at the time?

Ms. Lajoie: Absolutely.

The Chair: That's what I thought.

Ms. Lajoie: You are the first to file; therefore, if someone files an application after that, the second filer cannot obtain a patent.

The Chair: That's what I thought.

Ms. Lajoie: Also, the patent applications are published, laid open 18 months after the first filing. If eventually there is infringement, you can sue somebody and get some damages retroactively to the publication date.

The Chair: I know that if you write a song, you can write out the music and lyrics and mail it to yourself and never open the envelope, and that gives you time to publish it because you have copyright. You have proof that you wrote the song at a particular time. I know doing that has some force in law, so I thought that maybe if you do a design and you file, you have some force in law that it is yours.

Ms. Lajoie: Unfortunately, patent law is a bit more complicated than that.

The Chair: I am sure.

Senator Massicotte: May I clarify one point?

The Chair: Yes.

Senator Massicotte: You said once you file, you have priority rights, but in your country only, right? Can he take Senator Campbell's idea? Sure, he filed in Canada, but he says, "I've got an idea; I'm going to go down to the United States.''

Ms. Lajoie: Again, it is a question of novelty and obviousness. If you have filed the application and it is published and someone else in another country files it, hopefully if a search is well done, they will find your application and the description of your invention.

Senator Massicotte: "Hope.''

Ms. Lajoie: This is what we hope under the search and with all the tools and the electronic database that we have right now.

Senator Wetston: Thank you for coming today. I have a quick question because there are some questions that have keyed in on these issues.

I personally recognize how complex patent and trademark litigation is, having been there and done that a bit. That is not what this is about.

When I think about what you are attempting to do here — I am referring to page 5 of your deck. Do you have that in front of you? I am trying to understand with a general question, how will this enhance the opportunity for patents to be filed in Canada? Will it do that? You more or less talked about that a bit. Do you see that as innovation-enhancing? That is what I think of intellectual property to be.

I think of trademarks as being related to business growth. Do you see this effort as having any relationship with innovation and business growth as a result of this initiative? Or as Senator Black indicated, is this just administrative? If so, I am comforted to know that that is your view as well.

Mr. Georgaras: I will start and then I will ask my colleagues to add.

What drove the policy decision was to support businesses going global. Therefore, it is rooted in supporting globalization and innovation. We have seen in the administrative treaties that it will have a direct and substantial impact on reducing the regulatory burden, paperwork and the cost of businesses wishing to go global.

It will also introduce harmonized approaches, standards and policies so that a company, when they are becoming global and they're reaching that growth, will have more certainty in terms of how they manage their intellectual property portfolio, which could include a bundle of patents, trademarks and industrial designs, depending on their strategy.

Everything we can do to reduce the regulatory burden to improve the ease of doing business will ultimately support innovation and global growth. That was very much the driver behind our policy decisions to join.

Senator Black: A lot of the questions subsequent to my initial question started to touch on the concern that I have.

I have formed over the years the view that Canada, as a destination for filing patents or intellectual property applications, is not seen by innovators and inventors as attractive. I understand that forum shopping goes on, for whatever reason.

Hopefully I'm wrong, but I want to ensure that we're doing everything possible to ensure that Canada is a destination for great minds and great ideas. Can you address that, please?

Mr. Georgaras: These are two sides of the same coin, allowing Canadian businesses to more easily succeed globally and to also support foreign companies wishing to come to Canada.

The trends and the numbers show that on the patent side 88 per cent of our applications come from outside Canada; 57 per cent of trademark applications come from outside Canada; and 86 per cent of industrial design applications come from outside Canada. Very much the world sees Canada as a place to do business, and they see it as a place to protect their rights.

When we look at the evolution of global value chains, where parts of production cross many borders along the way, intellectual property becomes a key asset that businesses can use so that they can more confidently produce their widget and have it move across borders.

All of our work is really to catch up to where businesses are operating presently and to support not only investments in Canada but investments in terms of global value chains.

Senator Black: You observed that 88 per cent of patent applications come from outside of Canada. What are Canadians doing?

Mr. Georgaras: I'll give you the numbers. Within Canada, for the year 2015, we received 36,000 applications, of which 88 per cent were from outside; so the remaining 4,400 were from Canadians. That amount has remained relatively stable over time.

There's a core group of innovators and innovating companies who are getting their patents here in Canada. What we have noticed over the last 20 years, and we have numbers going back to 1995, is that there has been a continual increase of Canadians seeking patents outside of Canada, so very much a business decision. Businesses are going into the U.S. market, increasingly so in China. We have noticed a very steady increase.

In trademarks, for example, Canadians have been applying in China at a growth rate of 15 per cent per year over the last five years. We found there is a core group of Canadians seeking patents here in Canada, but a growing number of Canadians operating abroad.

Senator Black: That's very helpful.

Senator Marshall: You have the numbers for Canadian companies applying in Canada, and you have the numbers for Canadian companies or individuals applying outside Canada, in other countries. What are the numbers telling you? Are we becoming more innovative as a country? You're giving the impression that it's relatively stable. There's a big emphasis by the government on innovation. We have a Minister of Innovation, so do you see an upswing? You see the numbers.

Mr. Georgaras: We have done some very interesting work over the last couple of years in the office to understand the flows and try to find the linkages between intellectual property innovation and economic performance. We found some very interesting linkages between, for example, trademarks and our gross domestic product. Those move very much in sync.

On the patent side, we have found very strong linkages between intellectual property and manufacturing levels. So there's a core amount of manufacturing where intellectual property forms the base around it.

We're trying to understand those flows. What's very interesting here is seeing that increase abroad, and that very much tracks where companies are investing. It very much tracks where innovation is happening. We do a lot of investment in Canada in basic research in universities, and the ultimate goal is a global success for all of those investments.

Senator Marshall: Are you saying we are becoming more innovative, or have we levelled off?

Mr. Georgaras: I would say that looking at intellectual property alone is just one indicator, and that needs to be considered in terms of the overall productivity of companies and other measures of innovation. So looking at just the IP trends may not give the full picture.

Senator Marshall: In 2015-16, your revenues went down compared to the previous year and your expenditures went up. What would have happened then? That would indicate to me that we are being less innovative or the whole world is being less innovative.

Mr. Georgaras: I would need to unbundle our revenue sources a bit to understand this, again based on accrual accounting. As was mentioned earlier, an application can be made at our office and could take several years to get through.

A number of factors can convert, some outside of our ability to control, such as market swings. Some are within our control. As we build capacity, we can draw down our inventory, and that shows up as earned revenue. That could lead to changes in the amount of revenues and IP granted. Therefore, there's a disconnect between our internal productivity and efficiency and where the market might be going.

Senator Marshall: Some of the increases aren't minor; they are fairly significant. I think you said you're expecting revenues and expenditures to be about $150 million every year. I just can't see the numbers correlating, but that's fine. Thank you very much for your answer.

Senator Black: That was extremely helpful. I took from what you have said in respect of Senator Marshall's excellent question that you are confirming what I think we all know, that Canada is lagging as an innovative nation.

Mr. Georgaras: I would not be able to conclude that based on the IP numbers.

Senator Black: They are pretty much flat.

Mr. Georgaras: In fact, a lot of academics and others have tried to look at the IP filing numbers to try to draw linkages between that and economic or innovation performance, and it is not a very strong measure of that.

Senator Black: But it would indicate that, strong or weak, wouldn't it?

Mr. Georgaras: It would be one indicator, but you would need to consider a number of other factors.

Senator Black: I understand.

Mr. Georgaras: We have done some research with Statistics Canada where we looked at the use of intellectual property. We looked specifically at small- and medium-sized enterprises. For those companies who do use intellectual property, they are four times more likely to be exporters. They are 64 per cent more likely to be high-growth firms. We are not saying that if you get IP you will be an exporter in high growth. What we're saying is that firms that are growing do use IP as yet another tool to help them succeed internationally.

Senator Moncion: You mentioned earlier that over time you have received about 36,000 applications coming from outside Canada. My question is more about the length of time. If you fast track an application that you receive, you can do it under 10 months, or in 10 months, and then when it's not fast tracked it's between 24 and 27 months. How fast is it when it comes from outside Canada?

Ms. Lajoie: We treat everyone equal. It's first in, first out. All the applications that we receive are treated the same way. Unless an application is accelerated under one of the three mechanisms I discussed previously, we work on the older applications in our inventory.

Senator Moncion: And the delays are caused by information that is not clear within the applications?

Ms. Lajoie: There are a number of reasons when there's a negotiation between the patent examiners and the applicant. Of course, yes, there are a number of issues that may not be in line with the Patent Act and the patent holder, so a negotiation starts, and that may take a number of reports and exchanges. We never know. And sometimes it depends also on the quality of the application submitted to us by the applicant and also the quality of the answer.

It goes both ways. It's a shared responsibility for how fast it can go and the quality of the outcome.

Senator Moncion: If someone files an application and there is one fee, you are saying that the company can choose to only file in Canada. If it's only one fee, why would they not file in every country at once, or wherever we have treaties? Why would they not do that?

Ms. Lajoie: Again, if you file through the international route, there's one fee, but you get through the first stage, which is getting a filing and a first search. Once you really want to obtain the protection, then you have to go into each of the individual countries. This is where additional costs are applied, in translation sometimes. So by using an international filing system, you buy time, you get more information, you know your market better and then you make your business decision.

This first international phase is limited in patents for 30 months and I don't know how long it is for trademarks, but it's a question of time here to make better decisions.

Senator Moncion: Thank you.

The Chair: You operate on an accrual system? The Government of Canada operates on a cash basis. Where is your money? Do you give it all to the Consolidated Revenue Fund and then the accrual is for accounting purposes, or does your money reside in a separate bank account? Who governs you?

Mr. Georgaras: It does reside in the CRF, but it is fenced off specifically for the applicants themselves. Where there are deferred revenues that we have not earned yet because we have not done our examination, that is strictly held for the work we're doing. It cannot be used for any other purposes.

The Chair: The money flows in. If I send a cheque for $850, what do you do with it? Does it go to the Consolidated Revenue Fund? Does it go to your own bank account and then you pay the salaries out of there? How does that operate?

Mr. Georgaras: For the specific mechanics, perhaps I could ask my finance colleague about it.

It is deposited directly into the CRF, but it cannot be accessed by other organizations.

The Chair: Okay.

Senator Ringuette: It's in a trust, kind of.

The Chair: Sort of like in trust.

Are there any other questions?

Senator Marshall: I have one more question.

The Chair: I kind of sparked your interest there, senator.

Senator Marshall: Yes.

Is the request for the fee increase separate from being party to the treaty? Do you just bundle them together or are they intrinsically linked?

Mr. Georgaras: On the trademark side, I'll let Mr. Pierre answer.

Mr. Pierre: With respect to the trademark, because of the obligations under the treaties, like the Nice class, we did not determine that. It is already governed by the World Intellectual Property Organization with respect to how we're charging fees, so it is embedded with that need to accede to the treaties. It is not separate.

Ms. Lajoie: It's the same for patents.

Senator Wetston: I recognize the important work that you do and I think it's a critical area for Canada and its economy. I say this because as we move sideways with the real economy and we focus much more on innovation and the service industry, I watch what's going on across the country. I'm an Ontario senator; I live in Toronto. You would be very familiar with the huge institutional work that's done in innovation at Ryerson, MaRS, U of T and the University of Waterloo in all aspects of innovation research. Much of this, we hope, leads to patent filings and, potentially, businesses with trademark filings.

I think it was Senator Day that whispered in my ear correctly about this and I thought might have asked the question about the foreign filings in the U.S., for example, in Boston and California. That speaks for itself, those huge markets, where there's a lot of innovation, and we can see why there would be applications in China for obvious reasons in that market.

I think you pointed this out already, but it would give me great comfort to understand what you are doing with these various institutions of research in innovation, and I include Montreal in this. There has been fantastic innovation there, and in Vancouver as well. There's a lot going on across the country that needs to be exploited, developed and encouraged. Do you see any relationship with that in the work you're doing?

Senator Marshall, I was going to ask that question, about the relationship with fees and treaties. I didn't see the direct connection, but I understand your point.

I've gone on long enough, thank you, Mr. Chairman.

The Chair: No problem.

Senator Wetston: Can you help me with that?

Mr. Georgaras: Thank you, senator, for the question.

We have done a lot of work with the universities over the last few years looking at their technology transfer offices and finding ways of getting those ideas to the market.

When you look at basic research, such as is done in universities, it is very much far upstream, if you will, and the challenge is to help bring those ideas to market and help coordinate with other companies who can bring the ideas forward. So in our work with technology transfer offices, there are a number of different approaches. Different universities have different levels of success in bringing the ideas through.

We understand that there may be challenges along the way to help bridge and work with companies to coordinate and get the ideas to market. In fact, I understand that there may be a study being launched by the industry committee into looking specifically at technology transfer in intellectual property. So it is very much an area of focus, and we recognize the importance of getting those ideas out to market.

Senator Wetston: Thank you.

The Chair: If there are no further questions, thank you very much, senators, and thank you, witnesses.

(The committee continued in camera.)