Canada: The New Innovator’s Commercialization Dilemma


This report outlines the impetus behind the Centre for International Governance Innovation (CIGI) International Intellectual Property Law Clinic, which operated for three months in 2014. It consisted of a partnership among the CIGI International Law Research Program (ILRP), Communitech (the Region of Waterloo's hub for commercialization of innovative technologies) and leading intellectual property (IP) law firms.

The report describes the new innovator's commercialization dilemma — a multifaceted dilemma arising from lack of IP legal knowledge, lack of financial resources and the high costs associated with IP protection, all of which combine to place the new innovator in a vulnerable position at the early stages of their commercialization timeline. After briefly surveying the current environment for entrepreneurship-based clinics, the report describes the elements and structure of the CIGI clinic. The advantages for participating students as well as first-hand accounts of the benefits of the CIGI clinic are also detailed.

Taking lessons learned from the CIGI clinic, the report illustrates how an IP-focused law clinic can help to address the commercialization dilemma. The report describes the manner in which IP clinics might be structured, while reviewing the associated benefits and challenges for each structure. The report also makes brief recommendations for governments, law societies, law schools and IP offices to support the provision of IP legal services through the law clinic model.


The commercialization of ideas is central to global competitiveness in an innovation economy. Being inherently intangible, ideas may be protected to some degree by rights conferred through the application of IP legal mechanisms, which include patents, trademarks, copyright and trade secrets, among others. Access to IP legal knowledge and guidance relating to these mechanisms are critical when navigating the complex international IP legal regime, yet early-stage innovators (many of whom are young and inexperienced in business) often lack both IP knowledge and the financial resources to obtain timely legal guidance, leaving them vulnerable at a critical phase of the commercialization process. We call this the new innovator's IP commercialization dilemma. We also point to limited access to affordable early-stage IP legal advice as a contemporary access to justice issue. With access to IP legal knowledge and mentorship, however, new innovators can form an appropriate IP strategy and improve their chances of entrepreneurial success.

The CIGI ILRP examined the effectiveness of addressing the IP legal needs of new innovators through creating, operating and studying an experimental law clinic model, the CIGI International Intellectual Property Law Clinic. The clinic ran as a pilot program over a period of three months, with an IP legal practitioner supervising law students in the provision of early-stage IP legal services to new innovators in the Region of Waterloo, with the aim of helping those innovators protect their IP internationally. The clinic was able to provide value to innovators through a range of IP legal services, including patent work, trademark work and general IP strategy advice.

The resulting success of the clinic suggests the law clinic model for the provision of IP services may be effective in helping new innovators access the IP knowledge they need to position themselves competitively in the marketplace. At the same time, CIGI's experience operating the clinic identified a number of challenges to be considered when developing a sustainable IP clinic model for the Canadian context.

This report will explain the potential value of an IP law clinic, address the challenges identified in setting up such a clinic and make recommendations for achieving an effective and sustainable model of delivering IP legal services to new innovators.


A decisive factor influencing the development of a business's IP strategy — and correspondingly contributing to the existence of the new innovator's commercialization dilemma — is timing. To understand the critical importance of timing in the IP cycle it is necessary to consider how the patent and trademark protection timeline links up and interacts with the company investment cycle. Figure 1 shows the interaction between IP protection and investment funding for a new innovator. New innovators are unlike established players because they do not have the resources to commercialize and protect their innovations, and they lack experience in dealing in IP issues. The funding gap that the new innovator must successfully span in order to survive represents the crux of the new innovator's IP commercialization dilemma. An IP law clinic can potentially provide value in bridging this early-stage gap.

The Innovation-Investment Gap

The gap in the innovation-investment chain faced by new innovators is best understood by first highlighting some of the patent system's basic principles and embedded timing requirements. While similarly important issues surround the trademark system,1 for simplicity this discussion will focus on the patent system. Generally, a patent is granted for a period of 20 years from the date the application is filed with a patent office for innovations that are, among other things, new and inventive.2 As such, the general rule is that a patent cannot be granted for something that is not new — that is, for something that has been previously disclosed to the public in any form, by anyone, including a disclosure by the inventor.3 This is consistent with one of the underlying precepts of the patent system as a means of encouraging and promoting innovation: in exchange for powerful exclusive rights over the invention, the innovator is required to disclose his innovation, thereby providing the public with the benefit of new knowledge that might otherwise be kept secret in a manner that precludes public use and benefit. Where the details of the invention have already been made publicly available, there is no need to entice the innovator to contribute their knowledge with the allure of patent protection — it is already "out."

Understandably, public disclosure — and its potentially harmful effects — becomes a critical factor when new innovators look to patents as a means of protecting their IP. Often, unaware of the requirement not to disclose, new innovators will share the idea for their invention at a conference, a school presentation, a pitch competition or on their website. A company may also test the market by direct selling (for example, through online retailers such as eBayTM) and in the process unknowingly disclose vital information about its product. The motivations for taking such steps are reasonable: the new innovator wants to share this information with the public in order to test the idea and gauge whether it is marketable. This situation is further complicated by the requirement that the entrepreneur move fast to start the business in order to have first-mover advantages and, at the same time, address IP concerns by ensuring they file for protection before any competitors.

There is some good news, however, for a new innovator who has publicly disclosed before seeking patent protection: in some jurisdictions, including Canada and the United States, there is a one-year grace period.4 The bad news for these innovators is that they may have lost proprietary rights in many jurisdictions, including Europe,5 that do not have a similar grace period. This difference in treatment of inventor-derived public disclosure reveals one element contributing to the complexity and unevenness of the international system of patent protection in the global economy.

At this stage new innovators may find themselves ready to disclose (and perhaps aware that they need to pursue IP protection) but financially limited to personal savings or funding that can be obtained from friends and family. Legal costs to protect an innovation through patenting include the preparation of a patent application, which can range from $5,000 to $20,000,6 depending on the subject matter and the amount of time involved in preparation.7 While some of these costs can be deferred by filing a provisional type application,8 a formal patent application must ultimately be completed to secure protection. In many cases, particularly for new innovators, such as undergraduate students, there are almost no resources to devote to these legal costs.

These funding gaps, particularly germane to early-stage innovators, have been recognized and addressed, at least in part, by newly developed funding tools such as crowdsourcing (for example, online via KickstarterTM). Resorting to such tools can, however, present potentially serious consequences related to IP infringement. For example, it is advisable to seek IP protection before promoting the brand or invention on a crowdfunding website because once the promotion goes live, counterfeiters may be waiting to replicate the innovation. This breed of counterfeiters often has the means to get the new product to market much faster than the innovator, which can have a dire effect on the ultimate success of the innovator's business. Since counterfeiters may not be concerned with quality or reputation, knock-off goods and services are likely to be of much lower quality, which has a twofold damaging effect on the innovator: if the counterfeiter uses the innovator's brand name, it will tarnish the brand's reputation; and, if the counterfeit product is sold at a price point that is too low, it will be difficult for the original innovator to sell their own higher-priced, higher-quality product when it enters the marketplace behind the cheap knock-off.

Another way that some innovators may acquire financial resources to bridge early-stage funding gaps is through pitch competitions hosted by organizations such as universities, connector hubs and accelerators, where prize money is awarded to the most promising business.9 While this may provide a small amount of funding that can be directed to legal costs, it may be too late if the pitch competition results in public disclosure of the invention; in other words, the resources for protecting the patent arrive, ironically, after the need for protection has arisen and by means that may render the product ineligible for protection. In any case, pitch competitions are not guaranteed streams of revenue for early-stage innovators, and thus do not represent a reliable manner of securing funds that can be dedicated to IP protection costs.

Once the decision is made to pursue patent protection, preparing and filing the patent application only initiates the process. The innovator must subsequently convince the patent office — in every jurisdiction, worldwide, in which they apply — that the application meets the requirements for patentability. This process often occurs a few years after filing and costs may range from $3,000 to $5,000 for each exchange. If the patent is ultimately allowed, a fee is often required upon issuance. Once in possession of a granted patent, the innovator must turn their mind to enforcement against potential infringers. Legal fees for enforcement can range widely, from a cease-and-desist infringement letter ($1,000) to litigation (up to and perhaps more than $500,000). Periodically, maintenance fees also arise ($500 to $2,000) that are required to keep the patent "active" (i.e., enforceable) until it expires (20 years from the filing date). At this stage, there should be money available from investment or business revenue to direct to these costs. If not, the idea underlying the innovation may not be commercially viable, with market forces dictating that the innovation is not a sufficiently valuable contribution.

Where the innovator has ongoing business and growing innovative activity, this patenting process will be considered and likely repeated for subsequent patent applications covering new improvements and innovations, resulting in similar associated costs.

The crux of the new innovator's dilemma thus lies at a point in time before substantial funding is received but after the idea underlying the innovation has been "reduced to practice" (to use patent terminology). It is at this time (or earlier) that the innovator must understand the patent system, consider the options and develop an IP strategy. Where a patent is appropriate — as is often the case for technological innovations — the innovator has three options: take no action; prepare and file an application on their own; or prepare and file a patent application with the help of a patent practitioner.

The first option, taking no action, is the least desirable. In these circumstances, patent protection is a proper course of action, but a patent application is not filed and the innovator foregoes any associated benefits. As a result, the innovator may be left open to unscrupulous copying in spite of their valuable contribution to the state of the art.

The second option, self-filing, is also undesirable, given the complexities of the patent system and the expertise required to describe and prepare a patent application. This situation is exacerbated by an innovator who is unfamiliar with the patenting system. In such cases, innovators might look to online resources for guidance, prepare an application themselves and file on their own, with adverse consequences. For example, innovators may file a provisional patent application they have prepared themselves containing fatal errors (for example, not including sufficient technical detail to meet the disclosure requirements of the jurisdiction) that could ultimately lead to loss of protection. Self-filing would also require diligently tracking the application filing date, since doing otherwise risks a loss of rights if critical future dates are missed. Furthermore, a poorly prepared application can have an impact on the ultimate scope of the protection that an issued patent receives, as well as an impact on business: investors doing due diligence will evaluate the patent and any identified deficiencies can have a detrimental impact on subsequent funding. Accordingly, a self-filed application presents considerable risk, including potential negative short- and long-term impacts on the viability of the business.

Alternatively, innovators may wait until they have sufficient funding to file an application through a patent practitioner and as a result put themselves at a disadvantage. Such a delay can, in a knowledge-based patenting system where the first party to file is entitled to protection, inadvertently allow a competitor who files during that delay to secure protection and prevent the other innovator from doing so. For example, in the fastdeveloping high-tech sector, patents may be invalidated or limited in scope by applications that were filed a matter of days or even hours before (famously, Alexander Graham Bell and Elisha Gray filed telephone patents on the same day in February 1876).10 Thus, responsible innovators should file with the patent office as soon as they are able to do so properly. This is especially important for new innovators whose first patent is often their primary asset and subsequent innovations are merely improvements thereon.

Naturally, the third option is preferred: the innovator files an application prepared with the help of a patent professional. Unfortunately, as already noted, a new innovator with insufficient resources will not be able to take this course of action without some alternative form of legal service provision such as a law clinic. Aside from providing necessary legal guidance and expertise, this option also allows the innovator to dedicate their time to other business issues — frequently an important consideration for small companies.

Moreover, once innovators have navigated the patenting process successfully, they develop a better understanding of when patent protection should be pursued and what is involved in doing so. These benefits survive the company, as the innovators' new knowledge and skills required to acquire IP protection and commercialize an idea will follow them throughout their career.


The clinical model of legal education and providing legal services has existed for more than 50 years in a variety of forms (Macfarlane 2009, 35). In fact, in some areas of law, such as poverty law, there is a considerable history of law clinics being employed as a means of training students in legal practice and for delivering basic legal services to those who cannot afford them (ibid., 36). Historically, law clinics' offerings have been driven by the needs of the community in certain insufficiently serviced areas of law (for example, criminal, landlord-tenant or immigration), and have given law students the opportunity for a more experiential legal education.

In Canada, law clinics are becoming increasingly prevalent due to a trend toward adapting current models of legal education from the purely theoretical to a more clientcentric, practical model. The natural extension of this new approach to the area of IP law presents an opportunity to increase the profile and application of IP law clinics, while realizing the goals of education and provision of accessible services in a socially beneficial manner. Law students in an IP clinic setting would have the opportunity to become familiar with IP law and practice while at the same time developing universal skills required for the practice of law. While traditional law clinics focusing on immigration, landlord-tenant and criminal law provide recognized social benefits, it is arguable that IP law clinics also provide social benefits by supporting new innovators in protecting their IP rights, and consequently stabilizing the foundation for developing entrepreneurship.

The application of clinical legal education for the purpose of providing more accessible services to the innovation community is, nevertheless, relatively new to Canada. There has been some recent success with IP clinics such as the Law and Technology Entrepreneurship Clinic of the University of Windsor's Faculty of Law (dating back to the IP Legal Information Network founded in 2004), and York University's IP Osgoode (founded in 2008), but the offerings have been sporadic and are often subject to limited grants that restrict their potential growth and impact.

By contrast, the United States has been quicker to recognize the needs of the innovation community. IP law clinics have been successfully functioning in the United States for at least 20 years,11 with US law schools developing a robust network of IP law clinics. In 2011, the United States Patent and Trademark Office (USPTO) launched a pilot accreditation program granting clinic law students, under the supervision of a registered attorney or agent, the authority to file and register patent and trademark applications on behalf of innovators (USPTO 2015). The USPTO Law School Clinic Certification Program continues to expand, with 45 registered clinics in 2014 and participation increasing every year (ibid.). In recognition of the proliferation of IP clinics, the need to assist inventors and the value these clinics provide, on December 16, 2014, the US Congress passed a law to make the USPTO Law School Clinic Certification Program permanent (HR 5108 2014).

Outside of North America, the IP law clinic model is also garnering attention. Law schools in Europe are venturing into the entrepreneurship legal sphere with the launch of iLINC, a European network of "law incubators" which are, in essence, law clinics. Founded in 2013, iLINC aims to bolster the start-up community and increase the quality of future legal professionals by supporting legal training programs in Europe that offer law student assistance to entrepreneurs who are not able to afford professional legal counsel.

The CIGI International Intellectual Property Law Clinic was conceived as a response to a similar need for IP legal assistance in the Region of Waterloo's innovation community, with the goals of building strength in the local start-up community and giving quality, practical experience to future lawyers.


As part of the CIGI ILRP, the International Intellectual Property Law Clinic operated at the CIGI Campus in Waterloo, Ontario, from June to August 2014. The clinic was a collaborative partnership among CIGI, Communitech and three local IP law firms that answered Communitech's call for participation in establishing the clinic partnership.

The clinic provided pro bono IP legal information and services to more than 50 new innovators, while delivering practical training to law students. The seven law students, working under the supervision of a licensed lawyer, had the opportunity to gain experiential training in IP law by delivering legal services to innovators, and simultaneously supporting entrepreneurship and innovation in the Region of Waterloo. The clinic was not conceived as a replacement for services already available through the local IP bar, but rather to address a gap currently not served by the IP bar because the would-be clients cannot afford to pay for legal services.

The clinic was favourably situated in the Region of Waterloo, which is home to hundreds of new start-up tech companies (Communitech 2013). The Region of Waterloo is unique to the Canadian entrepreneurship landscape and has been recognized internationally by Startup Genome as a top-20 innovation centre worldwide (Hermann et al. 2012). With no law school in the region, the clinic did not operate in association with a law school; it drew its student clinicians from law schools across the province.

The mandate of the CIGI ILRP includes research into IP knowledge mobilization globally to advance international governance. The clinic provided practical IP legal support to innovators on the cusp of commercialization and internationalization of their business. By researching, training and increasing access to knowledge on international IP legal systems, the clinic contributed to the local innovation ecosystem.

The clinic also benefitted greatly from the involvement of Communitech, an organization devoted to helping technology companies start, grow and succeed. With its in-depth understanding of the needs of entrepreneurs and innovators in this region, Communitech's start-up services group was ideally positioned to provide support to the clinic. The Communitech Hub, in Kitchener's Innovation District, also served as the physical meeting space for seminars and clinic meetings.

Likewise, the clinic partnership benefitted from the participation and experience of the partner firms. Firms not only contributed to the design of the clinic, but also provided training and mentoring to the clinic's students.

The Clinic's Structure

In order to operate the clinic, the CIGI ILRP hired an IP lawyer and patent and trademark agent, as an independent contractor, to supervise the legal work done by the students. The students were hired and managed as employees by the CIGI ILRP. They were assigned to international law research projects and received reports on their performance from the clinic supervisor. To avoid any potential sharing of confidential solicitor-client information pertaining to the clinic with CIGI, a "confidentiality wall" was created and maintained, effectively separating CIGI from legal matters handled by the clinic. The clinic supervisor conducted work as a sole practitioner and was responsible for all records relating to clinic clients, with all client-clinic retainers specifying the client's status as a client of the clinic supervisor and non-involvement of CIGI in the file. The ILRP's role in the clinic was restricted to its creation and development with the community partners, engaging the supervisor and providing general direction on administration, staffing the student clinician positions, and reviewing the clinic supervisor's weekly summary reports of the clinic's activities (without reference to clientspecific work).

The challenge of preserving solicitor-client privilege meant that the partner law firms also would not be privy to the clinic's client matters unless the client expressly consented to sharing information with one of the firms. The clinic supervisor was able to consult the law firms on general points of law only, not client-specific issues, and no confidential information was exchanged with them.

The Clinic's Students

The student component of the clinic consisted of seven law students from various law schools across Ontario. Law students were hired by CIGI to work under the supervision of the clinic supervisor. The students brought diverse educational backgrounds, although almost all shared undergraduate education in science and engineering. As well, the students had a demonstrated interest in IP law, having taken courses in patents, trademarks, copyright or IP law at law school.

The work undertaken by the students at the clinic fell into two broad categories: the dissemination of general IP legal information, and client-specific matters. Students disseminated IP legal information to local innovators (many of whom were clinic clients) through group seminars. Student-led seminars allowed students to hone their knowledge of IP legal concepts and practices, as well as develop their ability to communicate these concepts and practices in an accessible and comprehensive way. The topics covered included the international and foreign law dimensions of protecting IP (for example, describing the legal regimes in the United States, Europe and worldwide). Exposing the students to domestic, foreign and international law helped demonstrate the global nature of innovation and entrepreneurship. Tailoring seminar content to the concerns of new innovators also required students to look at the business needs of young companies and how they may influence IP legal decisions.

The nature of the client-specific work varied across the spectrum of IP-related issues and from student to student, depending on the files assigned to them. Though a significant part of the work was comprised of the preparation and drafting of provisional patent applications (due to Communitech's focus on technology-based companies), other matters included patent searching and patentability opinions, trademark searching and application drafting, trade secret consideration, IP ownership analysis, questions about non-disclosure agreements, trade secret analysis, copyright review and guidance on general IP strategy, both domestic and international.

Students benefitted greatly from carrying their own files. Frequent face-to-face client contact presented students with valuable client interaction. Students participated in and conducted client meetings, oversaw the progression of their files and kept client-innovators apprised of their IP matter's status. Among other IP-specific experience, students learned a great deal from participating in the early stages of drafting patent applications. Patent applications are highly technical documents, and exposure to their preparation is very useful in understanding the fundamentals of the rights underlying the patent system.

Perhaps the students' most valuable learning experience from the clinic was the opportunity for closer and more frequent client contact than they could reasonably expect in a traditional IP placement with a firm. This increased contact allowed students to develop an appreciation of their clients' business goals, and how knowledge and use of available IP legal mechanisms can help achieve those ends.

The Clinic's Innovator-Clients

Potential clients were directed to the clinic by Communitech, through a screening process designed to identify new innovators in need of IP legal guidance but lacking financial resources to pay for legal advice. While most of the start-up companies engaging the clinic had a preliminary understanding of IP, they had not yet developed a comprehensive IP strategy. In fact, a good number of the innovators were still in the process of completing their undergraduate studies and, as such, had very limited resources and business experience.

The clinic clients needed substantial assistance and found tremendous value in the process of patent drafting with the clinic staff. Often the innovators would have a draft one- or two-page document describing their invention idea for submission as a provisional patent application. The clinic was able to review these preliminary documents, guide the innovators on what a patent application requires and ultimately provide the innovator with a detailed draft patent application. This hands-on patent drafting fulfilled two of the practical objectives of the clinic: the innovators acquired valuable knowledge and understanding of when an application may be necessary and the basics of how to prepare one; and the students gained the practical experience of patent drafting, a complex skill that requires significant practice. The opportunity for the innovatorclients to engage and work with clinic staff underscores the potential value of the clinical model for providing tailored legal advice as well as IP legal information. Further, the innovator-clients' understanding of the available IP legal mechanisms increases by seeing those legal mechanisms applied to the facts of a particular case.

Without the clinic's intervention, there was a real possibility that clients would have filed their initial one- or two-page description as their application — or not filed at all. Although the clinic did not file any applications on behalf of clients with any patent and trademark office, a number of innovators were able to file on their own or through law firms after receiving help from the clinic in drafting their patent applications.

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1 Trademark protection can be important to new innovators to protect the goodwill in their brand. Trademark registration is often less expensive than patent registration. Trademarks may also be protected in some ways by common law.

2 Patent Act, RSC 1985, c P-4, ss 2, 28.2, 28.3; 35 USC § 102-103.

3 Patent Act, s 28.2; 35 USC § 102(a)(1)-(2).

4 Patent Act, s 28.2(a); 35 USC § 102(b)(1). The "grace period" is an exception to the requirement that the idea must be absolutely new. In these jurisdictions, innovators may publicly disclose their invention before filing for a patent as long as they ultimately file for patent protection within the one-year grace period from the date of public disclosure.

5 Convention on the Grant of European Patents, Part II, Chapter I, Article 54.

6 All dollar figures in this report refer to Canadian dollars.

7 For a more detailed breakdown of the legal costs associated with obtaining a US patent, see of-obtaining-a-patent-in-the-us/id=56485.

8 A provisional application is a patent application that does not need certain formal requirements at filing (such as a full set of claims). See Patent Act, 35 USC 111(b).

9 See, for example, the Velocity Fund at the University of Waterloo, The Velocity Fund is a grant program that provides start-ups and entrepreneurs with the opportunity to win funding through competitions held three times during a given year.

10 Bell filed a patent application entitled "Improvement in Telegraphy" on February 14, 1876. Several hours later, Gray filed a "caveat" for "Transmitting Vocal Sounds Telegraphically," which would have given him a 90-day grace period to file his own patent application, without other patent applications being considered in that period. Bell was awarded the patent. See Evenson (2000).

11 The John Marshall Intellectual Property Patent Clinic filed US Patent 5,567,455 on behalf of an innovator on September 1, 1994. See www.

Previously published by the Centre for International Governance Innovation

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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