Research in Motion co-founder Jim Balsillie wrote a lengthy article on Canadian innovation policy last week that focused primarily on intellectual property policy. While the article would have benefited from some editing, Balsillie’s core argument is that Canada needs to do a better job of identifying and protecting domestic interests when it is developing intellectual property policy.
There is much to agree with in the Balsillie piece. For example, he rightly criticizes the 2012 Canadian copyright reform bill as primarily a response to U.S. pressure:
As a major creator and distributor of creative content, the United States has a great deal to gain from lobbying for rules making it illegal to enjoy American creative work without new licences. Canada recently passed the Copyright Modernization Act, which was created in response to U.S. government and corporate interests working in a sophisticated fashion to advance American interests at the expense of other countries, including our own.
Disturbing WikiLeaks cables from the 2005-2009 period show systemic and effective lobbying by U.S. officials, who pressured Canadian politicians to implement stricter copyright laws. Cables from 2006 show Canada’s industry minister promising the U.S. ambassador that final copyright legislation “would be in line” with American priorities. Another cable, from 2009, recounts a senior Industry Canada policy official asking a U.S. counterpart to put public pressure on Canada to create the needed justification to give Washington what it wanted.
Our policy-makers need a reminder that Canada’s interests are not served this way. Without a domestic innovation lobby that can vouch for the interests of Canadian ideas and creative content, Canadian politicians are inadvertently legislating in American interests.
There were many good aspects in the copyright bill, but the most contentious issue – legal protection for digital locks, better known as anti-circumvention rules – perfectly fits Balsillie’s description. Ironically, the recent decision to extend the term of copyright for sound recordings demonstrates that the same dynamic is still at play, since it is the major international record companies that lobbied for the change at the expense of Canadian consumers and small businesses.
A judicial strategy is a critical place to start. Canada’s Federal Court could be given greater powers to combat unacceptable behaviour by domestic and foreign “patent trolls” – companies that do not make or sell a product but sue other companies for patent infringement based on existing patent rights the troll has secured. New legislation could allow for injunctions to prevent a troll from filing a U.S. lawsuit while Canada’s Federal Court rules on whether the Canadian company has infringed on an asserted patent. Trolls could be required to be much more specific about how the target company’s product infringes on the patent troll’s claim – right now they can send out threat letters with general claims of infringement – and they could face sanctions when they are found to be using bad-faith tactics. Canada’s Competition Bureau could be given the power to target anti-competitive activity.
There are some good ideas here. Yet the problem is that Canadian business leaders cautioned against these kinds of reforms when they were consulted on these issues just last year. As I reported last fall, Industry Canada conducted a consultation on patent troll issues with leaders from companies such as Blackberry, IBM, Bombardier, Microsoft, and Cisco. Balsillie was at the February 2014 meeting where Industry Minister James Moore stressed the government’s willingness to address patent troll concerns. In fact, the government provided a detailed discussion document that raised the possibility of implementing some of the toughest anti-patent troll reforms in the world. That sounds much like the Balsillie ask with government taking the lead on potential policy reforms and working with stakeholders to gauge their interest.
Despite the opportunity to give the green light to combat patent trolls, the Canadian business community urged caution. According an internal summary document on the discussions, Balsille indicated that he supported the intent of the patent troll reforms. But others were less supportive: the Canadian Chamber of Commerce expressed concern with the reforms, arguing that the measures could legislate against legitimate assertion of patent rights and that they could create a chilling effect, while Cisco warned that the reforms “could do more harm than good.”
The document included reforms that are virtually identical to the ones Balsillie mentions in his recent piece. For example, the government document identified potential changes that would grant the Federal Court the power to issue injunctions to stop patent trolls from forum shopping or amendments to the Competition Act to give the Competition Bureau the power to target anti-competitive activity by patent trolls. Moreover, Balsillie talks about new specificity requirements for patent troll demand letters, which the government also raised, noting the possibility of a new prohibition against demand letters that are intentionally ambiguous or designed to induce a settlement without considering the merits of the claim.
Balsillie efforts to raise awareness of intellectual property reform are well taken. However, the problem lies with the Canadian business community – many of whom are subsidiaries of larger U.S. multi-nationals – that were less than enthusiastic about much needed patent troll reforms when given the chance to act just last year.