Canada: McCarthy Tétrault And IP Osgoode Co-Host FinTech IP Symposium

Last Updated: March 18 2016
Article by Keith D. Rose

Most Read Contributor in Canada, September 2018

On March 9, McCarthy Tétrault and IP Osgoode jointly hosted a symposium titled Effective IP Strategy to Drive Innovation in the Financial Services Sector.  This event brought together academics, business people, and lawyers for a discussion of how technological change is transforming the financial service sector and pushing incumbents and disruptors alike to think carefully about their IP strategies.

After introductory remarks from Barry Sookman and Giuseppina D'Agostino, the event set a brisk tempo and covered a lot of ground in two short hours.  The discussion was organized around three panels.

The first panel, moderated by Matt Flynn and featuring Ron Stokes of Ernst & Young, Douglas Cumming of the Schulich School of Business, and Adam Nanjee, from the MaRS Discovery District, looked at trends and developments in Financial Services Technology (or "FinTech").  The panelists noted that although many established financial centres (including Toronto) have emerged (or are emerging) as FinTech "hubs", much recent investment growth is happening away from these established centres.  While FinTech adoption rates have so far lagged in Canada compared to the global average, awareness and interest is high in Canada, suggesting this may change rapidly.

The umbrella term "FinTech" includes a variety of different sub-verticals, including lending and deposit, insurance, investment, payments and Enterprise services.  In some of these arenas, FinTech startups hope to be vendors or service providers to established financial services incumbents; in others, they are competitors.  But, either way, consumer and enterprise demand for faster, more convenient service offerings is mounting, particularly through mobile technologies.  Incumbent Financial Institutions have the opportunity to maintain their current positions by focusing on the consumer experience that they deliver: an opportunity they ignore at their peril.

The second panel, moderated by Judith McKay and featuring Josh Death of TD, Ken Hobday of Fiserv, and McCarthy Tétrault's own David Tait, Lisa Melanson, and Vincent Yip, discussed the "IP Arms Race", and particularly the effect of a changing legal landscape on patentable subject matter.  Ken Hobday noted that, in the wake of the Alice and Mayo decisions in the U.S., it has become much harder to obtain patents in the FinTech sector, with as many as 95% of patent applications in some sub-domains being rejected.  He described this as a "good-news/bad-news" situation.  It is much harder to build a FinTech patent portfolio under these conditions, but it also reduces the risk of an infringement claim from a so-called patent "troll".

Lisa Melanson noted that the legal landscape for FinTech patents is currently more favourable in Canada than in the U.S., but there are still hurdles to overcome, and patent prosecution strategies that can help.  Vincent Yip explained that there are ebbs and flows in the case law, but that a robust IP strategy, considering both offensive and defensive issues, remained important.  Different organizations might place different emphasis on strategic control over platform technologies, but freedom to operate is often at least as, if not more, important.  David Tait explained how litigation strategy was an important part of the total IP strategy.  In particular, he noted that in Canada, it is possible to bring an action to invalidate a patent before any infringement occurs, which could be a valuable strategic option to clear the field.

Josh Death broke the risk analysis down into three categories: "troll risk", "competitor risk" and "vendor risk".  From his perspective, one of the most important operational risks he had to manage was the operational risk that vendor-on-vendor lawsuits might lead to injunctions against critical systems.  This required careful analysis, ideally at the pre-contract stage.

The final panel focused on practical advice.  Barry Sookman kicked off the discussion by noting that many financial services organizations were aware of the issues, but uncertain of how to address them.

Judith McKay described how the same kinds of trends have played out in other areas.  This is not the first time that disruptive technologies have forced established companies to change the way they think about IP and innovation.  She explained that in innovative sectors, the C-Suite normally has a good understanding of IP and is able to promote a culture of innovation within an organization: "Culture eats strategy for breakfast!"

Vincent Yip explained that one practical technique was to work from a gap analysis considering what IP the organization would need to use or have access to, in order to meet its business goals.  After identifying what was missing, an organization can consider options to fill those gaps, including acquisitions, licensing-in, and development.

Josh Death noted the importance, as legal counsel, of communicating to the lines of business in language they understood.  He recommended adopting a project-oriented approach, starting small, and building proper business cases.  He repeated a point Vincent Yip had also stressed, that it was necessary to build an IP team that involved technologists who understood the business and how the technology would be commercialized, not just the legal department.  Moreover, it is critical to ensure that communication flows not just up the chain, but back to the innovators and inventors within the organization, to cultivate their respect and engagement.

Ken Hobday also stressed the important role of non-legal staff in executing an IP strategy.  He advocated taking a broad view, considering not just how to protect critical technology assets, but also the organization's brand.  A successful IP strategy is rarely limited to patents.  It also involves an organization's communications and marketing, as well as its contracting processes!

On that front, the panelists returned to the topic of managing contract risk.  Judith McKay described how, in some industries, vendors simply do not offer indemnities for third party IP claims at all, or cap their liability at amounts far less than potential exposure.  Furthermore, it is important to consider not just whether a vendor would attempt to defend a claim, but whether it could do so effectively in practice.  As a consequence, a thorough IP diligence exercise also involves consideration of the strength of the vendor's portfolio relative to its competition.  Exit rights and obligations to provide non-infringing alternatives are important mitigation tools that should not be overlooked.

Finally, the panelists considered some best practices for protecting freedom to operate.  Ken Hobday stressed the defensive value of prior art.  Judith McKay noted that, while it was important to assess freedom to operate up-front as part of product development, this was not a one-time analysis.  It is important to re-assess changes in the marketplace and the product strategy, on a regular basis.

As this (incomplete) summary indicates, this symposium was lively, intense, and packed with practical information.  McCarthy Tétrault was proud to join with IP Osgoode in hosting it.

McCarthy Tétrault has significant expertise in formulating intellectual property strategies for our clients. You can learn more about our approach by contacting any of the participating lawyers mentioned above.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

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.

By clicking Register you state you have read and agree to our Terms and Conditions