Is the 35-year-old Patent Act getting the job done?
The 150th anniversary of Canada’s intellectual property (IP) protection passed unnoticed in 2019. Over its history, the Patent Act has been revised and amended as required, recently amendments were made in March of 2020. A significant amendment was made to the Act in 1989 when patentability changed from 17 years of protection from the date the patent was issued to 20 years from the date of patent filing. This simple change offered a great advantage, as patents take time to process, by offering protection at the point of filing, removed the risk of the delayed patent approval process. This was particularly important for life science patents as some of these patents were under review for a decade or more, before being issued. This provided some patent owners with over 30 years of patent protection.
Over 30,000 patents are granted each year in Canada and cumulatively, over 1.7 million patents have been granted in the past 150 years. A few of Canada’s most notable patents include: electric lightbulb (patented in 1874); snowmobile (patented in 1937); and the electron microscope (patented in 1947). Perhaps Canada’s most significant global contribution was in Banting’s discovery of insulin. Banting wanted insulin to be as widely available as was possible and sold the patents he and his colleagues had received, to the University of Toronto for $1 in 1923.
Need for a higher level of patents after 150 years
While the Patent Act has been of great benefit for many Canadian’s and firms, going forward there needs to be further amendments to keep up with the times and innovations. One deficiency of Canada’s IP laws is that they prohibit patents on higher life forms such as plants, seeds and animals. This was most noticeably highlighted in the 2002 report by the Canadian Biotechnology Advisory Committee, which recommended that “higher life forms (i.e., plants, seeds and non-human animals) that meet the criteria of novelty, non-obviousness and utility be recognized as patentable.” Despite nearly 20 years passing and governments of both stripes holding power, the Patent Act has failed to be amended to allow for patenting of higher life forms. The table below provides a comparison of higher life form patenting varies between Europe and North America.
Plant material subject to patent and other rights
Lower life forms such as bacteria and yeast (microbial organisms) have been patentable in Canada since 1985. This means that a public or private researcher could modify a microorganism, apply for and receive a patent on the final microorganism. Concerning high life form patents, only the process to create a modified product can be patented. The final modified seed, plant or non-human animal cannot be patented in Canada. However, they can be patented in the United States. This is important as multinational firms may invest in new research in the US, given better IP protection.
Genomic innovations are on the cusp of a tremendous revolution in the ability to use new gene editing technologies to improve all aspects of agriculture. As climactic variability continues with climate change, improvements in heat and drought tolerance are going to be crucial for Canadian agriculture. Pest pressures are expected to change as well, creating a need for more insect-resistant crops. Gene editing also holds significant potential to increase the nutritional composition of crops, fruits and vegetables. Research of this nature is beginning to be conducted by both public and private crop developers.
With the ability of companies and institutions to receive higher life form IP protection for their investments in the US, could Canada’s lack of patentability impact innovation investments? I think it certainly could, as no resource is more liquid than capital, which will be invested in countries that have efficient regulatory systems and strong IP laws. Without this combination, investment in future innovation research will be attracted to jurisdictions where they exist.
In 2015, Canada updated the agreement on plant breeders’ rights (PBRs). All new crop, fruit and vegetable varieties have PBRs, which allow for the developer to recoup royalties on the sale of seed. Universities and government research departments commonly rely on PBRs to protect the IP in their new varieties. Royalties received from the sale of new seeds helps to offset the cost of funding future variety developments. Private technology developers who use patents to protect their IP involved in the development of new varieties will also receive PBRs on new varieties. Without the ability to protect IP, private sector investors will have no incentive to invest in the research. Before 1985, there was no private sector investment in the development of new canola varieties. Canola research was entirely publicly funded, with 1-2 new varieties released per year. Between 1985-1990, with patents possible on the development of new canola varieties, the private sector began to invest in the development of new canola varieties. Private sector investment has been so successful that in 2020, 24 new canola varieties are available to farmers.
Canada needs to revise its Patent Act to include the ability to patent higher life forms, such as plants, seeds and non-human animals. Without this amendment, Canada risks a reduction in the funding of genomic innovation and research.