Last week, Statistics Canada released its latest report on the commercialization of intellectual property in Canadian universities.  Canada spends billions of public dollars on research funding each year and the government has been increasingly focused on how best to commercialize the results.  While there are several possible approaches to doing this, the government and some universities have been focused on building patent and IP portfolios as part of a conventional commercialization strategy.  The alternative could be an open access approach - encourage (or require) much of the intellectual property to be made broadly available under open licences so that multiple organizations could add value and find ways to commercialize.  The universities might generate less income but would better justify the public investment in research by providing the engine for larger economic benefits.

Which approach is better?  The full commercialization approach has been tried in the U.S. with legislation known as Bayh-Dole and studies (here and here) have found that patents to universities have increased, but the increase has been accompanied by harm to the public domain of science and relatively small gains in income.

The Canadian Science and Technology Strategy similarly places its faith in commercialization through IP portfolios and licencing, yet the Statscan data suggests that this has also been ineffective. 

The latest report is based on survey data from 2008 which finds that the total IP income (primarily from licencing) at reporting Canadian universities was $53.2 million. The cost of generating this income?  The reporting institutions employed 321 full-time employees in IP management for a cost of $51.1 million.  In other words, after these direct costs, the total surplus for all Canadian universities was $2.1 million.  The average income per university from IP was only $425,000.  Patent applications and patents issued were actually down in the reporting institutions and there were less than two-dozen spin-off companies reported by the universities.

While few would suggest that there is no value in the IP commercialization strategy for universities - there is surely a role for it - the emphasis on this approach as the optimal method of benefiting from billions in public funding for research has consistently failed.  Rather, an effective commercialization strategy might recognize that the commercialization is better suited outside the university with funded research the engine for new innovation that is openly available to entrepreneurs without licencing barriers.  The public pays for the basic research and might ultimately enjoy far more benefits than the current break-even approach by having more open access to research results.

A new report funded by the European Union has concluded that counterfeits have pro-consumer effects while rejecting claims of losses by established companies.  The report concludes that most counterfeit purchases are not substitute for the genuine article and actually help promote the brand.  The report finds that the real cost could be one-fifth of previously calculated figures.

The CRTC yesterday affirmed an earlier decision requiring incumbents to grant wholesale access to faster speeds to independent ISPs.  The government could still overrule the decision within the next 90 days.

Conrad Black's ongoing legal fight in the United States has attracted considerable attention in Canada, yet my weekly technology law column (Toronto Star version, homepage version) there is a side courtroom battle at home over alleged defamatory content on the Internet that merits closer attention.  The case, named Black v. Breeden, involves postings such as press releases and reports on the Hollinger International, Inc. website that Black claims were defamatory.  Several Ontario media organizations published the allegations contained in those releases.

When Black sued the company's directors, advisers, and one company employee for defamation, the defendants in the case brought a motion to dismiss on jurisdictional grounds, arguing that Ontario was not the appropriate venue for the case since both Hollinger and Black are located in the U.S.  After a judge dismissed the motion, the defendants appealed to the Ontario Court of Appeal.

In a unanimous decision this month, the appellate court upheld the ruling by the motions judge, concluding that Ontario was a suitable venue and that the defamation case could proceed.


Linkages between defamation and jurisdictional questions are not unusual, however, a novel issue before the court was how to treat content posted on the Internet that is accessible to a global audience.  The starting point for jurisdictional analysis in Canada is the real and substantial connection test in which courts consider whether the connection is sufficient to merit asserting jurisdiction over the dispute.

In this case, the court was urged to base its analysis on a "targeting test" (the defendants relied in part on a law review article I wrote in 2001 advocating the adoption of a targeting-based analysis) that would involve considering whether the postings targeted the forum rather than looking at where they were downloaded and read.

The targeting test posits that courts should not assert jurisdiction over online content merely because it is accessible. Rather, there should be evidence that the site actively targeted an audience within the jurisdiction. The criteria for determining targeting remains elusive, but courts have referred to the language and content of the site, terms and conditions posted on the site, as well as awareness that the site's content may have an effect within the jurisdiction. 

While the court concluded that it did not need to formally decide whether to adopt the targeting test, it was satisfied that the statements were in fact targeted at Ontario.  It noted that the press releases posted on the Internet specifically provided contact information for Canadian media and that the company "clearly anticipated that the statements would be read by a Canadian audience and invited Canadian media to respond."

Interestingly, the defendants also raised an alternate argument, asking the court to establish a new exception to the real and substantial connection test for the Internet.  They argued that downloading the offending content was effectively the ‘completion' of the defamation.  Given the possibility of downloads in multiple jurisdictions, the defendants argued that many places could theoretically assert jurisdiction, leading to widespread legal uncertainty.

The court rejected the argument, concluding that judges were perfectly capable of sorting through the issues and ensuring fairness for both sides.  In doing so, it allowed the Black defamation suit to proceed while also providing Internet users and the legal community with greater insight into when Canadian courts will assert jurisdiction over defamation that occurs online.

"As technology changes, the levy is not an effective mechanism to compensate copyright creators for possible theft of their work. For that reason, our Government has not included an expansion of the private copying regime to iPods and other devices in our recently proposed amendments to copyright. Instead, we have included strong measures to deter and prevent all forms of piracy in order that creators can be rightly compensated for their work through market mechanisms."  Full letter here.