Report following November and December 2012 (wave two)

CIPO Roundtables – Second Wave (November-December 2012)

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Customer experiences and insights into the pre-application phase: When innovation and intellectual property first meet

March 2013

Executive summary

Background

CIPO is engaged in a series of roundtables aimed at providing insight into the needs and behaviours of Canadian small to medium-sized enterprises (SMEs) so that it can continue to support innovation in Canada. Roundtable sessions began in the summer of 2012 with each wave dedicated to a specific topic.

During its second wave of roundtables held in November and December 2012, CIPO consulted both current and potential customers on the pre-application phase of the intellectual property (IP) application process. The pre-application phase was defined for the consultations as activities that take place between the time a potential applicant realizes that they should look into IP and the time that they decide to apply. This phase was broken down into four stages: Initial Interest in IP, Initial Information Gathering, Initiating an Application and Selecting an IP Agent. Participants were asked to recollect and share their experiences with using the IP system during this phase and to provide feedback structured around questions that were posed within each stage.

Roundtable sessions were held in seven cities across Canada. Eighty-eight SMEs were consulted during 15 sessions divided between patent owners, trademark owners and potential IP users.

Findings

Participants consistently focused on the need for simple, clear information on how to navigate the IP system. They identified the cause of many of the challenges they faced as the absence of impartial, authoritative and easily accessible information on the IP system tailored to their needs.

Frequently-raised recommendations included:

  1. Offer a one-on-one consultation service with impartial, unbiased advice on the IP system. Such a service would help SMEs devise their business strategies and inform themselves.
  2. Enhance CIPO website content to provide information about the IP system and processes. Information available through the website should support innovators who want to make business strategy decisions related to IP.
  3. Provide an easily accessible list of registered agents and their area of technical specialty.

Introduction

Roundtable Sessions

Dates and Locations

  • Gatineau (November 14, 2012)
  • Halifax (November 21-22, 2012)
  • Montreal (November 28-29, 2012)
  • Edmonton (December 5-6, 2012)
  • Ottawa (December 10, 2012)
  • Toronto (December 11, 2012)
  • Waterloo (December 12, 2012)

The Prime Minister recently noted that Canada's long-term economic competitiveness in the emerging knowledge economy needs to be driven by globally competitive, high-growth businesses that innovate and create high-quality jobs. The Government of Canada has provided significant resources over the past few years to support knowledge-based company growth and job creation.

As intellectual property (IP) encourages new knowledge and innovation, the Canadian Intellectual Property Office (CIPO) has a key role to play in supporting the government's agenda in this regard. As Canada's IP administrator, CIPO is working towards a better understanding of the requirements of innovators and the innovation cycle in which businesses operate, facilitating access to IP information so it can be better leveraged, and developing an IP framework that supports innovation, increases market certainty and reduces red tape.

Currently CIPO is in the process of actively consulting with the Canadian business community as a means to become more familiar with the complex evolving nature of business strategy and the decision-making processes that underlie IP use. This will allow CIPO to better support innovative undertakings and business success while improving the quality of CIPO services. By conducting roundtable meetings across Canada with innovative small and medium-sized enterprises (SMEs), CIPO aims to gather the necessary information to create a more robust IP system that encourages and supports innovation.

During its second wave of roundtables held in November and December 2012, CIPO consulted 88 innovative SME owners and employees in seven cities on the pre-application phase of the IP process. This phase was defined for the consultations as activities that take place between when potential applicants realize they should look into IP rights and when they decide to apply. It is when innovation and IP first meet. This time is crucial for innovators because they are often trying to establish their business while simultaneously protecting their invention. A positive outcome can make a significant difference in the success of the innovator's business venture. The pre-application phase was defined for the consultations as comprising the following four stages:

  1. Initial Interest in IP
  2. Initial Information Gathering
  3. Initiating an Application
  4. Selecting an IP Agent

Participants were asked to reflect on their experiences during this phase and provide feedback structured around questions that were posed within each stage. This included providing participants with the opportunity to identify gaps between what is currently available to them and what might be necessary to make the IP system more accessible.

Sessions were divided between patent owners, trademark owners and potential IP users. In some cases groups were combined. Each session typically lasted up to 2.5 hours with the exception of the sessions held in Ottawa, which lasted up to 1.5 hours each. Discussions were led by a CIPO employee. CIPO experts in patents, trademarks and industrial designs were also present to answer questions at the conclusion of each session. Questions were of a general nature about the IP system; participants were asked not to discuss specific cases or to share any confidential information.

Roundtable Findings

There was relative homogeneity in participant feedback received across locations and sessions. There was also input received that was not representative of all participants but offered insight into the pre-application phase and participant experiences. These have been identified as individual insights.

Stage I: Initial Interest in Intellectual Property

Roundtable participants were asked to reflect upon their initial interest in IP, beginning with initial IP awareness. They were also asked to share about perceived barriers to obtaining required information and what would have made it easier to gain an initial understanding of IP.

Findings

Becoming aware of IP

Participant responses as to how they first became aware of IP varied widely, with the following sources identified:

  • When working for previous employers, mainly larger companies. Some of these companies had in-house legal counsel who looked after the patenting process. They were therefore exposed to the idea of patenting an invention but did not know the specific steps involved.
  • Through their innovator-entrepreneur activities such as securing rights to protect their IP when working with a partner or another company. Some participants also indicated that they work in industries where inventions without IP protection are more likely to be stolen.
  • When learning about how to approach investors. This initial awareness came through online research and watching TV shows such as Dragon's Den and Shark Tank.
  • Through federal organizations such as the Canada Business Centre and the National Research Council.
  • Through family or friends.
  • While at university.
  • Through networking with peers within their industry.
Driving Initial Interest

When asked to identify the driving force behind interest in IP, the majority of respondents said their primary motivation was to develop inventions into commercial products. IP protection—patents in particular—was identified as a means to commercialize an invention or protect its market space. A number of patent owners indicated that many investors will not even talk to inventors who don't have a patent on their invention. One innovator said his experience is that manufacturers are more willing to work with innovators who have a patent or industrial design for their product.

Initial Questions about IP

"There should be different levels of IP information sessions, especially for those starting out. What better source for this information than from an impartial group (i.e., CIPO)?"

Roundtable Participant

Participants indicated that their initial questions primarily focused on the IP application process and IP strategy. Process queries revolved around the following questions:

  • Can I process a patent application on my own?
  • Am I obliged to hire a lawyer?
  • What is the timeline to obtain a patent?
  • What kind of protection is afforded by specific IP?

When asked to identify the most difficult questions to answer, participant responses coalesced around the following general themes:

  • IP Strategy
    • Do I need IP to innovate?
    • How do I market a trademark?
  • IP Ownership
    • Who actually owns my invention?
  • Neutral Sources of Information
    • Who can I talk to in order to obtain unbiased advice?

Participant questions about IP strategy showed uncertainty around exactly what protection IP offers and what factors should be considered when deciding whether or not to employ trade secrets. Given the need to engage legal expertise early in their innovation phase and uncertainty around the marketability of their inventions (and even getting to market), participants were unsure if they needed formal IP protection versus employing trade secrets. They also wondered in which country they should seek IP protection.

Questions around ownership of their invention came from participants who worked for employers while working on their own inventions. This theme was also raised by participants working in partnerships on their inventions.

Uncertainty around neutral sources of information included discussion of the high cost of legal fees at a point in the innovation phase when entrepreneurs typically don't have funding. Participants stated that they were interested in having a place where they could get general advice and impartial credible information at no cost.

Participant Recommendations

Recommendations from the Initial Interest in Intellectual Property stage focused mostly on the information needed. Participants made several suggestions to reduce barriers during this stage of the pre-application process:

  • Provide robust information in regard to how one should go about protecting IP before investing in filing a patent.
  • Clarify when it is appropriate and effective to file. For example, should companies file as a defensive strategy?
  • Provide a guide that identifies all costs associated with filing for IP protection. This would assist businesses when planning and budgeting for this activity.
  • Publicize and provide a clear understanding of the difference between registering a business name and protecting that name with a trademark.
  • Provide a place to acquire IP training that is geared toward SMEs.

Stage II: Initial Information Gathering

The second stage of the pre-application process discussed focused on initial information gathering when innovators look to inform themselves on IP. This section of the roundtable consultations generated the most discussion as it was an area that participants identified as having large gaps. Discussions during other stages of the session often returned to this stage.

Findings

Initial IP Information Consulted

Participants who were able to recall what type of information they initially looked for when seeking to learn about IP identified issues trying to determine if their IP was novel and finding a credible source that explained the basics of IP, e.g., an "IP for dummies" guide. During this initial stage they were looking for information to determine whether their invention was patentable and a source that set out the required steps to protect their invention. Owners of trademarks similarly were looking to learn about this coverage. Participants indicated that it was difficult to find this information. A number of participants stated that they were initially looking for competitive intelligence, namely information on filings by competitors.

Resources Consulted

Among the resources first consulted by participants to obtain initial information on IP were the following:

  • An Internet search engine (e.g., Google)
  • Legal counsel
  • CIPO Business Development Officers (BDO)
  • The National Research Council of Canada (NRC) and their Industrial Research Assistance Program (IRAP) representative
  • CIPO's website
  • Peers within industry
  • University offices

Of the resources consulted, "Internet search engine" was the most widely cited. The other sources were mentioned in varying degrees by other participants. There was no consensus among participants on which source was the best to consult.

Information Gaps

Participants expressed the view that CIPO could effectively remove many barriers to the IP system by providing a one-on-one consultation service for SMEs.

Participants were asked to identify gaps in the process of identifying and collecting information. The gap consistently identified was a lack of information necessary to construct a business strategy around IP. Participants asked "When should I use a trade secret?", "What is patentable?" and "How long does the patent application process take?", all with a view to building a business strategy. While questions spanned numerous areas and focused on how to tactically use IP, answers were sought for one reason: to create an informed strategy on how best to use IP for strategic advantage.

Although the general consensus was that the greatest gap was a lack of business strategy information, individual participants provided this additional in-depth input:

  • There is a lack of transparency around IP metrics that make strategizing difficult. One solution would be to have metrics on the CIPO website home page about how long different process stages take for each IP type and specific information about metrics by discipline.
  • It is difficult to know who to consult outside of the agent community in order to have an informed conversation about IP.
  • There is a real need to know how to protect and patent software.

Participant Recommendations

Participants made a number of recommendations to address the varied gaps identified during the discovery stage of the pre-application process. Recommendations mostly focused on CIPO playing an active role in IP knowledge dissemination, e.g., providing the information necessary to devise a business strategy around IP. Participant recommendations mainly covered two areas:

  1. Provide one-on-one counselling to SMEs. This service would help businesses decide whether they want to use the formal IP system to protect their innovations. The notion of CIPO providing a neutral, information-based one-on-one counselling service was brought up by participants in numerous sessions and it took many different forms. Among the approaches recommended were:
    • A coaching service that would direct businesses on issues to consider and where to find information in order to prepare an IP business strategy.
    • Identify mentors who could provide advice around business strategy. These mentors should be entrepreneurs who already have experience with the IP system.
    • Create a moderated online forum where entrepreneurs can post questions and share experiences related to the IP system.
  2. Improve CIPO's website by providing relevant, interactive content to enable a better understanding of the IP process. Participants provided specific recommendations based on their extensive use of the Internet for business research and their use of online business services, including some Government of Canada services. Commonly received recommendations included the following:
    • Create training videos and other interactive learning tools that explain concepts, strategies and key information about IP. Participants said they would like to have an overview of the IP system and process from a credible, neutral source like CIPO prior to engaging an IP agent.
    • Create wizards to walk the user through the various forms and related steps to obtaining IP information.
    • Provide a checklist or graphic representation that identifies and explains all of the steps in the IP application process including estimated timelines. The objective of this tool would be to help businesses understand the IP process and plan accordingly.

Additional recommendations provided by participants include the following:

  • One shared his experience with a technology accelerator initiative that offers selected product-ready and potential high-growth SMEs with access to facilities with resources and contacts to help them grow on a global scale. His company received workspace within the accelerator. Officials from his company were introduced on the first day to venture capitalists, angel investors, legal aid and business development consultants—all of whom were on site—in one-hour meeting blocks. The participant estimated that this "quick start" approach to the program saved his company four months of time and approximately $10K in costs at this crucial point in the start-up process. He recommended that CIPO offer a similar service that puts innovator SMEs in contact with relevant partners and service providers in event-style meetings.
  • A number of participants mentioned that CIPO could form partnerships with appropriate locally-based business support organizations. By partnering with such organizations, CIPO would be able to reach many new SMEs and educate them on the benefits of IP and how best to navigate the IP system. These participants envisioned the partnerships primarily in the form of rotating information sessions.
  • Several participants suggested that CIPO could have a travelling road show that visits different cities across Canada. This event would offer not only CIPO experts to provide advice but access to on-site local legal counsel who could be interviewed to determine if they would be a good fit. The road show could include "Introduction to IP" presentations from CIPO as well as access to IP examiners to answer general questions about IP.
  • A number of participants in the Atlantic region said that the CIPO Business Development Officer's methods to assist them were invaluable and recommended CIPO consider replicating this model.

Participants identified CIPO in multiple sessions as credible and authoritative. Some participants added that CIPO is seen as unbiased, making it the organization of choice to provide IP information.

Stage III: Initiating an Application

The third stage of the pre-application phase involves deciding whether or not to file and, among those who decide to file, whether to use an agent or file on their own. This part of the roundtable discussion was intended to identify how SMEs, armed with information about IP, approached deciding whether and how to proceed with IP protection.

Findings

This roundtable stage had the least variety of participant input. The vast majority said they hired an agent. The reason they gave was the complexity of the IP system, including the filing process, and the desire to have an expert look after something so important. However, several trademark owners said they filed for IP protection themselves since they could work through the application process.

Several participants stated that they decided not to file. Reasons included the expense of protecting IP through litigation and the speed of change in certain industries, making the cost of IP protection not worthwhile.

Self-filing of an Application

Participants who initially attempted to file their own application had the following observations:

  • Several said they used a lawyer for their first patent, learned from this process and are now able to file their own applications.
  • One said he applied on his own for a trademark, which he found very straightforward, but sought legal advice for his patent application owing to the complexity of the process.
  • Another said the trademark application process was confusing in part because of a lack of straightforward feedback.
Sources Consulted (Non-Agent)

Participants identified consulting the following non-agent sources during this stage:

  • Local business development office
  • Inventors groups
  • CIPO Business Development Officers (BDO)
  • CIPO's website
  • USPTO website
  • Other businesses (peers)
  • NRC-IRAP

There was no consensus on credible sources to consult.

Participant Recommendations

"It would be nirvana if we could file in Canada and have the option of filing in other countries simply by checking off boxes that indicate the countries where you would like to file."

Roundtable Participant

Recommendations largely mirrored those from the Initial Information Gathering stage, namely that CIPO should provide IP system information that enables decision making. Specific recommendations included:

  • Provide one-on-one consultation services to ensure that SMEs have relevant information to make decisions during this phase.
  • Create an interactive application dashboard that displays the status of an application and when fees are due.

Participants who decided to file on their own recommended the following:

  • Simplify the application process.
  • Provide the general public with more information regarding IP so that individuals would not necessarily have to hire agents.

Stage IV: Selecting an Agent

The final stage of the pre-application process examined in this wave of roundtables is the selection of an agent. Several themes emerged through insights offered by participants, with consensus arising on both actual and perceived gaps in available information.

Findings

Selecting an Agent

When asked how they went about selecting an agent, participants offered a variety of responses, the most common being searching the Internet, using the Yellow Pages, and referral from trusted contacts. Less frequently identified sources were:

  • CIPO website
  • Venture capitalists
  • A local chamber of commerce
  • An industry association
Considerations when Acquiring an Agent

There was general agreement among participants across sessions that it was important to find an agent who specialized in the field of the invention in question. Some added that this is crucial if an agent is to provide more than process assistance, and due to the ongoing interplay between inventor and agent throughout the application process. To illustrate this, one participant said that she hired an agent who didn't specialize in her area, and in her view she ended up doing 98% of the work to apply for a patent; the agent merely identified which forms to fill out at each step. Conversely, another participant stated that his agent has such a strong understanding of the subject area and adds such value that the agent's name should be included on the patents.

Difficulties Finding an Agent

A number of participants indicated they had to change agents several times. In some cases this was due to market changes; for example, going from protection in Canada to protection in a foreign market. In other cases this was due to service level issues. Participants noted that it is a major setback when they have to change agents due to the time and money invested in this relationship.

Participant Recommendations

Participants were eager to share their recommendations on how to reduce the barriers they face so they can identify and engage suitable agents and lawyers. Comments across all sessions coalesced around the following recommendations:

  • Make a list of agents available on the CIPO website that identifies their specialty and contact information. This listing should be searchable by specialty and geography.
  • Provide a scorecard of some kind to indicate which agents provide the highest quality services. This recommendation was not explored further by CIPO staff, as it fell outside the intent and mandate of the CIPO roundtables.

Conclusion

The following are the key messages that CIPO heard from participants:

  • Offer a one-on-one consultation service with impartial, unbiased advice about the IP system. Such a service would help SMEs devise business strategies and inform themselves on the IP system.
  • Enhance website content to provide information about the IP system and processes. Information available through the website should support innovators who want to make business strategy decisions related to IP.
  • Provide authoritative information on registered agents and their area of technical specialty.

Customers were clear in their desire for CIPO to be more involved in helping them to navigate the IP system. CIPO will review the observations and recommendations provided with a view to addressing gaps that are causing barriers for SMEs during the pre-application phase.

Annex 1 – Roundtable Discussion Questions

This roundtable will address four early stages that form part of the IP registration process for innovators, beginning with an initial interest in IP and ending with the decision to file. The stages are identified as follows:

  1. An initial interest in protecting IP
  2. Information gathering
  3. Initiating an application
  4. Selecting an Agent

Please note that there is some overlap in these stages. They are intended to guide the discussion, organize a logical sequencing of questions and provide part of the framework of the final report on these consultations.

1. An initial Interest in Protecting IP

  • How did you first become aware of IP?
  • What drove your initial interest in IP?
  • What were your initial questions about IP?
  • What were the questions that were most difficult to answer all through that initial process?

2. Information Gathering

  • What type of IP-related information were you initially looking for?
  • Where did you first go to obtain this information? And did you find what you were looking for?
  • Who or what did you consult about IP? What type of advice did you receive? In what format was it delivered? (Written? Orally?)
  • Were there gaps (based on your current knowledge)?
  • Did you seek out advice specific to your industry?
  • What would have made the process of initial information gathering easier for you?
  • In general, when you were initially gathering information on IP, who or what did you see as the most credible source of information?

3. Initiating an Application

  • What type of information did you need about the application process when you began looking?
  • Where did you first go to find this information?
  • What were the major challenges in finding this information?
  • What would have made it easier?
  • What would you say was your level of awareness of how to go about filing for a Patent, TM or ID?
  • Did you consult anybody for assistance? If so, who? What type of advice did they give you?
  • Did you attempt to apply for IP yourself?
  • Did you look at a Patent, Trademark or ID Application Form before deciding to consult an agent?
  • Did you attempt to complete an application form?
  • Is there a type of assistance that would have been valuable to you in your efforts to complete the form that was not available?
  • Was the process of attempting to complete an application a factor in deciding to go with an Agent?
  • What were the most difficult barrier(s) confronting you when you decided to initiate the application process?

4. Selecting an Agent

For those of you who have filed with an Agent, please think back to the process of selecting an Agent. How did you go about the selection process?

  • What sources did you first consult?
  • How did you eventually find an agent?
  • What were your primary considerations in selecting an agent?
  • Was finding an Agent with a specialty in your area an important selection consideration?
  • How difficult was it to find an agent with a specialty in your industry area?
  • What would have helped you to find an agent?
  • What would have made it easier to find an agent with a specialty in your area?
  • What were the most significant difficulties you encountered while acquiring an Agent?

Before we wrap up, anything else that you would like to add and/or share with us?

Annex 2 – Participant Demographics

There were a total of 88 individuals who participated in the fall 2012 roundtable discussions. The following table displays the geographic distribution of the participants.

Geographic Distribution of Fall 2012 Roundtable Participants
City Number of Sessions Number of Participants Percentage of Participants (%)
Waterloo 1 9 10
Edmonton 3 17 19
Toronto 2 16 18
Ottawa 2 10 12
Montreal 3 15 17
Halifax 3 13 15
Gatineau 1 8 9
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