Mon, Mar 22, 2021
by Daniela Bassan
Daniela Bassan, Q.C. is a Partner and Practice Group Chair at the law firm of Stewart McKelvey (Canada) where she focuses on intellectual property and complex, multi-jurisdictional dispute resolution.
As vaccine rollouts ramp up in many countries, and calls are made to assist vaccine-deprived nations, the Bretton Woods institutions are increasingly focused on post-pandemic strategies. A number of core concepts are broadly associated with these strategies including “resilience”, “building better”, and “innovation”. Regarding the latter, a multi-faceted approach is proposed (using Canada as a case study) whereby legal, financial, political, and structural systems are leveraged to maximize opportunities for innovation and their impact on recovering economies.
This systems-based approach to innovation can be illustrated as follows:
On the legal front, innovation is closely tied to the protection and enforcement of intellectual property (IP) rights. Multi-lateral or bilateral agreements on IP rights (e.g. copyrights, trademarks, and patents) may need to be updated or amended to address new priorities (whether national or international) in the wake of COVID-19. Canada, which has one of the largest number of trade and investment agreements with other nations, could invoke review or sunset provisions to negotiate new trade-offs under the IP chapters of those agreements.i Changes to legal agreements or systems supporting IP rights could increase growth in, and exportability of, designated good and services as between trading partners. For example, IP tied to health care technologies, low carbon technologies, and transformative digital technologies could be designated for fast-track prosecution so as to secure and exploit the IP rights on a priority basis. State laws, regulations, and procedures – including those related to the application and registration of IP rights – could similarly be updated to prioritize those technologies and sectors which will have the greatest impact on economic recovery.ii Whether those priorities are short-term or long-term will likely depend on the mandates and jurisdiction of the legislator(s) or negotiator(s) who oversee the trade portfolios.
On the financial front, coordination is needed to target firms and industries whose operations will best support the digital and technological aspects of an innovation-focused economy. For example, by leveraging FinTech firms and technologies, lenders can improve efficiencies and product offerings while strategically supporting innovative businesses and entrepreneurs. Teaming lenders with incubators and accelerators in strategic areas (both geographically and categorically) can also lead to exponential growth and development in target industries (both domestically and by way of exports).iii Where public funds are invested alongside private equity in innovative companies – especially those running small and medium sized businesses (SMEs) – a menu of options may be utilized. These include repayable (with no-risk terms), non-repayable (in whole or in part), and cross-guaranteed facilities (in combination with private lenders), similar to measures announced by many countries at the height of the COVID-19 pandemic. However, accountability for the proper use of those facilities — to drive innovative projects and outcomes — should be part and parcel of their delivery.
On a political level, there is an opportunity to create strategic program offerings based on industry clusters and collectives in innovative fields. For example, in Canada even before the pandemic, the federal government had identified a number of innovation super clusters — ranging in subject matter from ocean business to artificial intelligence — to receive $1 billion in co-investment with industry. During the pandemic, the digital technology super cluster saw a rapid rise of projects pertaining to COVID-19 related topics such as genetic testing, biomedical data discovery, and predictive modelling platforms.iv In another pre-pandemic move, Canada had announced the need for a patent collective whereby SMEs could pool (and scale) their resources in order to leverage the use and development of strategic patents in targeted areas (such as Clean Tech). At the end of 2020, the Innovation Asset Collective was formed with seed funding of $30 million by Canada for exactly this purpose.v While each country or region will identify its own strategic focus area(s), the concept of leveraging collective groups and clustered firms is universally applicable. This is particularly true where shared platforms and technologies can deliver exponentially higher (and faster) results as compared to fractured use of the same tools and systems.
On a structural level, strategic sector-diversification may lead to new synergies between private and public partners. For example, the trend continues toward organized and large-scale commercialization of innovative goods and services developed in partnership with educational institutions (e.g. universities and campus innovation labs). Indeed, the pandemic produced one of the most well-known and successful partnerships in this area with the development of the Oxford/AstraZeneca vaccine.vi On the other hand, there may be underrepresented or undervalued areas where new opportunities for innovation present themselves. For example, indigenous IP protection — which does not necessarily fall within a traditional paradigm of individual rights protection — could be another collective area of focus for communities and their partners. In this context, the concept of innovation may need to be adjusted to refer to innovative platforms for showcasing long-standing indigenous IP, which was previously overlooked or unrecognized. Given today’s hyper-focus on Environmental Social and Governance goals (and justifiably so), these structural opportunities may be ripe for new research and development toward innovative projects.
In conclusion, opportunities for innovation arise where multiple systems and sectors (macro level) are changed in incremental yet strategic ways (micro level). Ensuring the optimum interplay of those changes between relevant stakeholders and participants — legally, financially, politically, and structurally — will likely determine the success of the chosen innovation pathway.
i For a listing of Canada’s trade and investment agreements in bilateral and multi-lateral settings, see https://www.international.gc.ca/trade-commerce/trade-agreements.
ii In 2020, the Canadian Intellectual Property Office launched a pilot program where small entities can request that their patent applications for COVID-19 related products be accelerated in examination. See details at https://www.ic.gc.ca/eic/patentaccelerate.
iii See, for example, the Global Risk Institute report by C. Watson & A. LaPlante entitled “An Overview of FinTech in Canada” (March 2018) at https://globalriskinstitute.org/publications/an-overview-of-fintech-in-canada.
iv For a listing of innovation projects tied to the use of digital technologies, see “Canada’s Supercluster projects: COVID-19 response” at https://www.ic.gc.ca/superclusterprojects.
v Read about the mandate of the Canadian non-profit organization Innovation Asset Collective at https://www.ipcollective.ca/why-now/.
vi For an interesting panel discussion about innovation and the road to vaccine development see: “A Conversation with Stéphane Bancel, CEO of Moderna” (Jan 20, 2021) hosted by Harvard Business School Alumni at http://www.hbsgcc.org/recording. The author of this essay participated in the discussion.