IP Osgoode

Getting Profits From Patents: An Interview with Ed Fan and Loreto Grimaldi

The course Legal Values: Commercializing Intellectual Property is being offered for the first time at Osgoode Hall Law School this winter term.  The IPilogue sat down with Adjunct Professors, Ed Fan (Torys LLP, Partner) and Loreto Grimaldi (MedAvail Technologies Inc., COO & General Counsel) to talk about this unique course.

As the business world increasingly relies on an information-based economy, intellectual property (IP) will be more important than ever for entrepreneurs and lawyers alike. The Commercializing IP seminar course attempts to provide students with some insights into the ramifications of IP in the business world by exploring the many ways in which a business can use their IP strategically to ensure successes and profitability.

 

Can you briefly give us some background on your current practices and how they relate to the commercialization of intellectual property?

EF: At my law firm Torys LLP, the intellectual property group is involved in practically all aspects of the IP field. My practice focuses on helping my clients accumulate, secure, and exploit their intellectual property rights. I also help my clients with other IP-related services, which can include technology transfer, patent maintenance, and portfolio management. I frequently work with clients to develop a strategy for commercializing their IP. These strategies involve different methods for leveraging IP in the marketplace, and can include licensing, selling IP or giving advice towards the acquisition of other IP portfolios. As an IP legal services provider, one of our fundamental tasks is to determine if the client has accumulated IP rights, and then make sure that they hold and maintain them in a way that they can have an advantageous use of it later on.

LG: At MedAvail, we are commercializing a disruptive and game-changing remote pharmaceutical dispensing technology, initially in Europe and North America. As the General Counsel of a start-up company, I am heavily involved in the day-to-day business beyond the basic legal role. As a Business Lawyer in a “new economy” venture, IP issues abound, and are an important component of my practice. From the IP tasks associated with commercialization of our own technology, to the more strategic questions on offensive and defensive patenting strategies, IP issues figure heavily in our daily decision-making. IP issues become even more complex for a start-up business when multiple markets are considered – these include ensuring the business has freedom to operate in these new markets from a patent perspective, and deciding on what patent strategy works best in those markets (many of the issues are very different from one market to another).  In the modern, digital world, IP commercialization is a critical component to many new ventures in the marketplace, and MedAvail is no exception.

 

How do you view the role of commercializing IP in both the business and legal world?

EF: My view is that, even in the sense of a legal practice, intellectual property really is a business asset. From a legal perspective, the work I do is to accumulate rights, whether that is patents, trade secrets etc., and then think; when the client gets to the marketplace with his product or service, how will they make money from it? Do you build the service yourself, or do you find partners though investments?

Whether it is better to secure good IP rights and then launch a product, or develop a good product and then build good IP around it, the legal rights are fundamentally intertwined with business affairs. If you think of commercializing IP in the business world, you might want to think about the fact that IP is a prime asset for some of the most valuable companies in the world.  IP is important in these companies from both a balance sheet point of view and in being able to offer the best services and products to their customers.

LG: From a business perspective, most new ventures will involve some form of intellectual property.  In the US marketplace in particular, patent issues associated with commercializing an IP-centric business are very complex – it is a very litigious environment and patent trolls abound.  A business needs to be mindful of the many IP landmines that, if not careful, may derail a business on the eve of an important event such a financing, trade show or IPO. IP issues invariably involve a mix of business and legal decision-making, as IP strategies typically involve both a risk assessment, and a cost benefit analysis which, in a pre-revenue start-up with limited capital, are extremely important.  As such, it is not uncommon to have a dedicated senior resource working inside these ventures, closely with management and the Board, to get in front of these issues and map out a plan that allows the business a chance to be successful commercially while avoiding a variety of IP traps.

 

How do you see Canada as a player in the commercializing IP space, and what do you think will be the effect of emerging multinational free-trade agreements like CETA on this area?

EF: Canada is an interesting example of the marketplace. When you think of the commercializing IP space you fundamentally think about market size, and Canada certainly couldn’t be considered a large market globally. Yet, despite this, there are some very interesting and unique Canadian programs in the commercializing IP space. For example, there is the very important SRED tax credit program to IP-based businesses that choose to do business in Canada. So there is certainly a lot of Canadian policy that is friendly to the development of IP, which supports businesses that otherwise have a hard time being successful in Canada due to our size in the marketplace.

Regarding multinational free-trade agreements like CETA, IP is not necessarily a large part of these very complex and intricate agreements. But if you think of Canada as a net-exporter of goods rather than a consumer, anytime you add the opportunity for free trade, this is good for the economy. Certainly the CETA agreement is probably going to be beneficial from this view point, and is probably the most important treaty in this area since NAFTA. Being beneficial on the export market, these agreements can help in the commercialization of products that are often based around IP rights.

LG: Canada has a rich history of innovation and IP commercialization – look at Nortel, Blackberry, Desire to Learn, and many other Canadian success stories.  In recent years, we are seeing a re-emergence of technology businesses and the “knowledge economy” in Canada, with a growing culture of innovation.  This is the result of a combination of factors – the availability of investment and venture funding (both foreign and domestic); a fertile ground of talent coming out of Canadian universities, and various government initiatives.  Look at cities such as Toronto, Vancouver, Waterloo – many “clusters” are emerging in a variety of exciting futuristic technologies…. It is truly an exciting time to be a Canadian technology entrepreneur!  Our company is in contact with investors and funding organizations globally, and many of them have had high praise for many Canadian ventures that have come on line in recent months/years.  This is something Canadians should be very proud of.

On treaties, my view is that anything the government can do to promote Canadian businesses and talent globally should be encouraged.  Canadian ventures have shown the world that we can compete on a global stage, and this is one of the reasons that Canadian venture funds have had to compete with many foreign investment sources in funding Canadian ventures in recent years.  We have a reputation of excellence in technology and innovation, and it is great to see programs in place that facilitate exposure of our innovations on a worldwide stage.

 

What do you feel are the biggest misconceptions about the commercialization of IP?

EF: Although I probably wouldn’t consider this purely a misconception, I often see an undervaluing of what we can call the “sweat equity” IP. When we think of commercializing of IP, this is very far from IP rights in the abstract. The misconception is the sentiment that “I have a great idea, and I will get paid”. I am not sure that this is exactly true. There is a lot of sweat equity that goes into commercializing a product that may have some IP rights built around it. There is a tremendous amount of work that goes into securing and maintaining the IP rights themselves, and making a successful business from all of this is even more difficult. Thinking about the amount of work that is required is often lost in the early stages of brilliant ideas, and since commercializing IP is really about taking the idea into the marketplace, this consideration is something that should be at the forefront of any strategy.

LG: In Canada, while good progress has been made in promoting and cultivating innovation, the broader market place and related structures need to catch up with the rest of the world.  A small yet important example is start-up funding.  In the US, the JOBS Act was groundbreaking legislation that allowed up to a million dollars to be raised by start-ups from non-accredited investors.  This enabled and fuelled the growth of such innovative funding programs like crowdfunding.  By contrast, it took the Ontario regulators several additional years to bring forth something similar.  In summary, the Canadian “business ecosystem” needs to do a better job of adapting to the new business realities, and the fact that much of the value and wealth to be created in the next 50 years will come from new technologies. We need to be more nimble in supporting these ventures and getting them off the ground.

 

What do you think is the most valuable piece of knowledge that students of the commercializing IP seminar can get out of the course? And why do you think this course is important for students?

EF: We view this course as a practical course, not a legal theory course. It is really looking at how the law impacts business enterprises, and more specifically, business enterprises that have significant IP. I think that this type of course is important for law students, as there is no shortage of legal theory courses that go over what the law is. For students, to understand how these laws affect the business world and the marketplace is something that is beneficial. This knowledge and perspective is something that can assist them in being good lawyers, if a legal career is what they are pursuing. Even if they are not pursuing a career in law, understanding business concepts and the business reality that the law impacts can be a very valuable tool.  The value for the student is applicable if they are from Osgoode Law, Schulich Business, or Lassonde Engineering. The value in this course is being able to see and understand business operation from the inception-stage forward, especially for a technology-driven business.

LG: Osgoode does an excellent job teaching students how to be good practitioners, understanding the rules, thinking outside the box, and being good technical lawyers. This IP Commercialization Course builds on those critical skill sets, providing students with a “cradle to grave” point of view on how to use IP legal and business skills in the business world.  The course is cross-listed among Osgoode, the Schulich School of Business, and the Lassonde School of Engineering.  Fortunately, in our inaugural year, we had representation from all 3 disciplines – Legal, Business and Engineering.  I believe our class would agree that this multi-disciplined dynamic was a key element to the success of the course, as our discussions on current IP topics included the points of view from all 3 areas.

The course combined both traditional lecturing on core IP topics, and a thread of discussion and exchange that brought topical and current issues into the classroom.  For example, students were asked to bring in a news article on a topic relevant to the commercialization of IP – throughout the Term, we discussed everything from the Apple/Samsung patent disputes, to Tesla’s patents on solar paneled car roofs, to the Duolingo language learning App, and a whole host of other current IP topics.  During these presentations, the students were given an opportunity to understand how the commercialization of IP affects real world businesses every day.  We had a very bright group of students this year, which was reflected in the caliber of the discussions…

 

Adam Falconi is an IPilogue Editor and a J.D. Candidate at Osgoode Hall Law School.

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Search
Categories
Newsletter
Skip to content