There’s a brand new nationwide consensus forming in Canadian coverage circles, and it goes one thing like this: Canada is world-class at producing analysis, horrible at commercializing it, and the answer is to “personal our
IP
.” File extra
patents
. Maintain the rights at dwelling. Construct a moat.
I’m a patent skilled. I make my dwelling analyzing, brokering and monetizing patents. And I’m telling you: a patent is just not a moat. A patent is a authorized declare — a bit of paper that provides you the precise to sue somebody, someplace, if you happen to can afford it, if the claims are drafted nicely sufficient to outlive scrutiny, and if the expertise you patented truly covers what your rivals are doing.
Strip away these caveats and the submitting cupboard filled with patents Canada is studying to build up won’t save us if we don’t perceive the brutal arithmetic of patent actuality. The “personal our IP” rallying cry is correct in spirit. However as a technique, it’s dangerously incomplete — and Canada can’t afford incomplete methods proper now.
Begin with the fundamentals. The highest 10 to twenty per cent of patents generate 80 to 90 per cent of all financial worth within the patent system. Research of German and U.S. patent portfolios constantly present this excessive log-normal distribution. The overwhelming majority of issued patents are, commercially talking, practically nugatory — they embellish partitions, inflate R&D reporting metrics and reassure traders who don’t know any higher.
Then think about what occurs when an issued patent truly issues sufficient to get challenged. On the U.S. Patent Trial and Enchantment Board (PTAB), the all-claims invalidation fee exceeded 75 per cent till not too long ago. The PTAB has been known as a “loss of life squad” for patents by its critics, and the numbers justify the hyperbole. For Canada, which information at a fraction of U.S. scale and with shallower prosecution sources, the anticipated high quality distribution of our patent portfolios is probably going much more skewed towards the nugatory finish.
Analysis on European and U.S. corporations constantly exhibits that secrecy and lead-time benefits are way more necessary than patents as a method of defending aggressive benefit — significantly for SMEs. Solely in science-based industries with lengthy commercialization cycles, like prescription drugs, clear tech and specialty chemical substances, do patents reliably create the blocking energy we think about they supply.
Solely about two per cent of issued patents ever find yourself in litigation. Of people who do, roughly 95–97 per cent settle earlier than trial. The costly, dramatic patent wars you examine are statistical outliers. For many Canadian corporations, the patent on the shelf won’t ever be examined in court docket — which suggests it’s going to by no means operate as a barrier to entry. It could create some deterrence at finest, however you’ll by no means know for positive.
Patents are costly — a well-prosecuted portfolio in a number of jurisdictions simply runs $200,000 to $500,000 for a
startup
. Cash diverted from product improvement, expertise acquisition, or market entry could be deadly at early phases. And it might purchase little or no safety.
Worse, patents are disclosure paperwork. Whenever you patent one thing, you train your rivals precisely what you constructed and the way it works. In fast-moving expertise sectors —
AI
,
semiconductors
, software program platforms — by the point a patent points (sometimes 2–3 years after submitting), the expertise has usually moved on. Your rivals didn’t copy your patent; they learn it and constructed the subsequent model.
The 2024 World Innovation Index ranked Canada eighth on innovation inputs however twentieth on innovation outputs. The Council of Canadian Academies’ 2025 State of Science, Expertise and Innovation report put it bluntly: Canada “excels in analysis however falls brief on the subject of retaining the worth of its improvements.” The structural failures recognized — lack of enormous progressive corporations, persistent boundaries to scaling, low personal sector R&D spending — aren’t fastened by submitting extra patents. A patent filed by an organization that may’t scale, can’t implement it and may’t iterate previous it’s a tax, not an asset.
An actual IP technique is a multi-layered system of boundaries to entry. Patents are one layer — and for particular sectors and particular applied sciences, a critically necessary one. However Canadian entrepreneurs and policymakers have to internalize the total toolkit.
Commerce secrets and techniques
Coca-Cola’s components has by no means been patented. It has been a commerce secret for over 125 years, offering indefinite safety {that a} 20-year patent may by no means have matched. In AI and software program, the coaching datasets, mannequin weights and optimization processes that create actual aggressive differentiation usually can’t be patented — however they are often locked down as commerce secrets and techniques, indefinitely, with no public disclosure. Canadian corporations systematically underinvest in commerce secret governance: strong NDAs, exit agreements, need-to-know entry controls and worker coaching. An organization with wonderful commerce secret hygiene and a mediocre patent portfolio will usually outperform an organization with a bigger patent portfolio and poor operational secrecy.
Requirements-setting
Corporations that write the requirements write the foundations. When your expertise turns into a regular — whether or not an IEEE wi-fi protocol, a 3GPP telecom normal, or an industrial security specification — you create lock-in that no patent can replicate. Participation in requirements our bodies confers market credibility, interoperability necessities and community results that construct moats no competitor can simply breach. Canada’s Requirements Council explicitly helps this pathway. Nearly no Canadian startup makes use of it.
Information property: Within the age of AI, proprietary datasets could also be extra helpful than patents. A Canadian firm that has accrued ten years of agricultural sensor information, affected person genomics, or autonomous automobile telemetry has constructed a barrier that can’t be reverse engineered and can’t be replicated on an affordable timescale by even a well-capitalized competitor. Information moats compound over time.
Community results and switching prices
A platform enterprise built-in deeply into buyer workflows — by way of proprietary APIs, licensed integrations, or branded coaching ecosystems — creates lock-in that patents would by no means obtain. The IP technique right here is defensive: guaranteeing that emblems, copyrights, and contractual phrases defend the ecosystem you’ve constructed. Many Canadian B2B SaaS corporations have sturdy community results and weak IP safety for them.
Regulatory information exclusivity
In life sciences and agtech, regulatory approval packages confer information exclusivity durations that operate as IP safety impartial of patents. Canadian corporations that focus completely on patent technique whereas ignoring the regulatory IP layer are leaving important worth on the desk.
The businesses which have constructed sturdy aggressive benefits by way of IP — the Qualcomms, the Intels, the pharmaceutical majors — don’t merely file patents. They construct interlocking methods of safety. They establish what’s value patenting (the blocking claims, not the ornamental ones), what’s value holding secret, what ought to turn out to be a regular, and what needs to be licensed strategically to construct ecosystem dependency. They audit their portfolios commonly and abandon weak patents fairly than paying upkeep charges on lifeless weight.
For Canada to compete on this atmosphere, we have to intervene at a number of ranges concurrently. Accelerators and incubators ought to require IP technique as a part of founding workforce training — the query “what’s your IP technique?” must embody commerce secrets and techniques, information governance, requirements participation and regulatory exclusivity, not simply “have you ever filed a patent?”
Authorities applications supporting IP ought to explicitly fund commerce secret governance infrastructure: authorized templates, cybersecurity frameworks and coaching for the HR, authorized and engineering workers who implement secrecy protocols. And subsidizing Canadian firm participation in ISO, IEEE, ITU, and 3GPP processes for applied sciences the place Canada has analysis management — quantum, AI security, clear vitality protocols — would embed Canadian IP into the foundations of worldwide commerce in a method that no patent portfolio can replicate.
The nationwide dialog Canada wants is just not “file extra patents.” It’s “construct actual moats.” Generally a patent is the precise device. Typically it’s not. All the time, it’s only one device in a strategic system. A patent filed and not using a commercialization plan is a disclosure doc on your rivals. A commerce secret with out governance is a lawsuit ready to occur. Information with out licensing phrases is a free useful resource for whoever aggregates it first. Requirements participation skipped is market construction written by another person.
We’ve realized to need the submitting cupboard. Now let’s be taught to construct the moat.
Louis Carbonneau is the founder and CEO of Tangible IP, a patent advisory and brokerage agency.
