IP Insights : Clean technologies
♫♫ Welcome to the fourth and final panel of our 4 discussion panels, where experts from various industries share their expertise to inventors and entrepreneurs considering turning an idea into a business. IP is a crucial business tool at all stages of a company's development. To help Canadian businesses better understand how to use IP more effectively, business-facing government departments, Crown corporations and an industry association in Canada have come together to create the IP Village, which includes our partners at the Business Development Bank of Canada, BDC, Global Affairs Canada's Trade Commissioner Service, the Intellectual Property Institute of Canada, the National Research Council of Canada's Industrial Research Assistance Program, Innovation, Science and Economic Development Canada, and of course, the Canadian Intellectual Property Office. I'd also like to give an extended welcome on behalf of the IP Village to the Innovation Asset Collective, IAC as well as Sustainable Development Technology Canada, also known as SDTC. So in today's panel we'll start off by hearing the interesting story of growth and IP of Carbicrete.
We are also fortunate to get important take-home lessons from distinguished professionals helping companies grow in the clean tech industry. Today's panelists are, first we have Chris Stern, who is the CEO of Carbicrete, a carbon removal technology company that enables the production of cement-free carbon negative concrete. Chris is a mechanical engineer with 20 years experience in CapEx sales and business development and pharmaceutical packaging, equipment, automotive machining and the entire solar manufacturing and deployment segment. Next, we also have James Reid, who is a partner at Norton Rose Fulbright Canada, and a patent agent with over 20 years of experience.
Regularly inspired by his innovative clients, he is driven to help them manage patent risk, develop intellectual property strategies and build company value by understanding, capturing, protecting and exploiting through IP assets. He has drafted and successfully prosecuted thousands of patents in Canada, the United States and worldwide, and has counseled innovative companies of all sizes, from start-ups to multinationals. Our next panelist works at the Business Development Bank of Canada. Passionate about sustainability and health, Pascal Lanctot has over 25 years of experience in technology, research and investment. Prior to joining BDC, Pascal was director of IP with renewable energy company Anaergia, and water technology company Fibracast, who together have over 600 patent applications combined. Pascal sent spent 6 years as an investment lead at SDTC, funding Canadian clean tech companies.
Next we have Sharon Ho. Sharon is a legal counsel at Innovative Asset Collective, a federally funded nonprofit organization set up to help SMEs in the clean tech sector with IP strategy. In addition to being a lawyer, Sharon is also a patent agent and a trademark agent. Sharon has almost 20 years of professional experience in all areas of IP and in a wide range of industry from front-end IP protection and strategy development to IP-related corporation transaction and litigation.
And finally, our fifth panelist is David Smith, who is currently a Director of investments with SDTC with a specific responsibility for seed funding stream. Prior to his time as a director, he was an investment lead with a portfolio that includes a number of SDTC's data enabled solution. He brings a background in computing and telecom, along with a good deal of experience related to IP. And lastly, my name is Maya Urbanowicz. I'm the acting director of the IP awareness and education team here at the Canadian Intellectual Property Office. I will be your moderator.
So now that the panelists have been presented, we can jump into today's discussion. Chris, I would like to start with you. Before we dive into some questions, could you talk a little bit about Carbicrete, how it came about, and your IP journey please? Yes, so Carbicrete actually as Maya mentioned is my second start-up. First start-up was in solar power and when we exited that exited that business, I was looking for something else to do and I was introduced to the Office of Technology Transfer at McGill, more precisely, to Mark Weber.
We went through a list of all the interesting things that McGill was working on. So many universities haven't been fantastic in getting technology from the university out to the industry. At Stanford it's a billion dollar business to be quite frank. The original idea was to go to McGill and see if I could help commercialize one of the interesting new technologies, you know in 2015.
And so I went through this list with Mark Weber and this new technology, first of all, I learned that cement was bad. I didn't know, it was for me, it was just this white powder that you add water to and it makes things hard. And I'm from the clean tech world. There's a technology out there that my business partner, Mehrdad Mahoutian, and then Dr. Yixin Shao had invented to take steel slag and replace them entirely with something called steel slag and steel slag is an industrial waste that is created from the steel making business. There's over 300 of it made worldwide every year that ends up in landfills, but it happens to be calcium rich and so you can take this slag replace cement which is super nasty, there's a lot of CO2 that's released when you make the cement and you mix it together with aggregates and you add in carbon dioxide because it doesn't cure without CO2 and then you know you got a 3 for 1 package, you get rid of cement, you get rid of steel slag and you get rid of CO2 all in one fell swoop and you've got a product that you can sell to anybody at Home Depot or Lowe's or whomever. It's a product that everybody can use, and it's a climate change solver. You know, like it gets rid of carbon dioxide.
It also rebates it the and so mid-2015 at that time they'd already applied for their patent, McGill applied, Mehrdad Mahoutian and Dr. Shao and so we started the process, you know, and for me I was new to IP back then. It's still a bit of a professional amateur, as I like to say when it comes to these things, but it's basically I've learned a lot.
It allows people to defend what they've invented, but also prevents from people taking something from you. And so even from the get go, we'd use Norton Rose, which is a premier law firm, and that's important, you know to, in order to ensure that you got all the right paperwork in place as you go through the path forward so, the starting of the company was really myself and Mehrdad meeting for about a year at McGill talking about how to get this patent out into, the, into the world and finally incorporated in 2016 and started building the team and building the patent portfolio and we came up with the strategy because you know there's secret sauce, but there's also all the legalese behind that builds the moat around your company which allows you to sort of proceed, and give you some freedom to operate within the business world. So throughout that time we've come up with over 10 different patent families. We've got 15 granted patents in many jurisdictions and we're constantly, you know, looking for ways to grow that patent portfolio, in addition to the whole commercialization aspect of the company. Because, you know, patents still have value, they prevent people from taking from you.
Fast forward after that was starting in 2016, we're in 2023 now and it's ingrained in the culture of the company. We've got 50 people and roughly half of the people are in R&D and inventing new things and making improvements. Because there's always more and more improvements to what you've actually invented in the first place. So,
our core patent was granted in I think 2016 in the United States and you know since that time we've grown it further. Then we got into fundraising and you know, that people were looking at us in terms of what is their freedom to operate. And so we've gotten into that. The SDTC came on board and helped us, you know, get to the commercialization sort of status and you know they've been very helpful and you know the genesis of SDTC was to do what I just said, basically make sure that the IP that's created in Canada stays in Canada and it gets developed properly. You know, we've incorporated what we've learned from the SDTC as you see and the funds that they have attributed to us together with private funds like well, BDC is not private, but it's an arm's length government organization that is providing Carbicrete some of the capital to move forward and together with all of our private funders and all of our grant applications, we've managed to build this business 50 plus person company that continually ingrained IP sort of centric focus on the company. You mentioned IP strategy R&D, all these elements. One thing that I was interesting interested in just one more question to dive into was how do you ensure that your IP strategy is implemented from a corporate perspective.
And also especially when it comes also to collaborations and what are your approaches there? Yeah, it's interesting. So we've got an IP strategy committee. Which is myself and a few others, so better sales and business development as well as the sort of the research side and we come up together with what is where to go do next, because there's always, there's always people trying to get in your way and there's always places you want to go. And so that's the nexus of where IP strategy comes together. As you move forward. So there's the internal collaborations, but we also work together closely with other universities sometimes. So there's McGill, but there's other universities across Europe that have asked us how can we take our technology and add it to some of the things that they're working on? So, from this we can also benefit from that IP generation. So we're working with the European from the 3D concrete printing and they want to use our tech using slag and CO2 to do something in 3D printing, so these are some of the types of other collaborations that can happen.
So you could be university-based. It could be also company-based. Sometimes we collaborate with, you know, other some of our other suppliers and how can we develop some IP together for our benefit and perhaps for their benefit as well. Thank you very much for the answers. Now I'll turn to James. James, you help companies like Carbicrete file for patent protection, but filing for protection isn't just about protecting your invention. What are the main questions people should ask themselves before filing for a patent? Well, first of all, I think asking questions before filing a patent application is a good start and that doesn't always happen. Maybe just explain it a little bit,
often what happens is innovative companies, inventors come up with great ideas, they might decide they want to patent it, they file a patent application and it kind of sometimes it gets forgotten or pushed aside because you're wearing various hats, especially start-ups, but I think you want to spend time upfront thinking about a lot of important considerations that you want to think about, either before you file the first patent application, or as you go through that process and build out a portfolio. First of all, is filing a patent application the right answer, the right solution? You know, I think it's a valuable tool and in many cases it can provide great value for the company, but there are situations when maybe there's alternate solutions that might be worth considering, trade secrets or others. I think you want to think about what is it we're looking to get out of this? You know, just filing a patent application or even getting a patent is fine, but what do you what do you hope to protect? What are you going to do with that? What's going to provide the greatest value to the company? And I think in that sense, and you know and Chris mentioned a few times IP strategy and the commercial side, I think it's really important that you make sure that your IP strategy or you're thinking about IP and what kind of protection you want to get is well aligned with your larger business commercial strategy. Because you could get great a patent granted, but if it ends up being not well aligned with where the business has gone, and because the patent process can often be quite lengthy, you know sometimes you see a divergence between the technology when you filed the patent application and where it ends up. And what you don't want is the patent ultimately to not be well aligned or not cover what the business needs a few years down the line. Yeah, I guess the you know what you're going to do with the patent, how is it going to differentiate us in the market to investors, and how does it fit with the larger commercial strategy? And we often talk about the importance of developing a strong relationship between a business and their IP professional.
What are some of those things you look for in a business when they come to you to help for help with the right portfolio? What's the homework that a company can do before they meet with you? In short, the more homework the better, and again, it's sort of that reflection up front. But inventors are, you know, often like to talk about how great their technology is and often it's the case. But how is that different from what exists? And I mean by in the industry, what are competitors doing? How much do you know about the marketplace and the competitors? Have you have you taken a look to see what patents might exist, what they might have? You know you have, you could dive in in in more detail down the line, but I think it's useful to do a lot of that thinking up front and also where you see this technology going over the next 2, 3, 5 years, because those are all things that you know, if you're working with an external patent agent or patent professional that you know, IP professional, they'd want to know, okay, where do you see this going? Is this a foundational, a core IP? Is this core to your business? Are you building your business on 1 or 2 or patent applications or is this peripheral, you know, interesting technology that's going to help build out that that moat but we don't, you know, it's not going to be central to the business moving forward? I think those are all things that you need to think about up front, and the sooner. You'll have to think about them eventually, so the sooner you do that, the better the end product is going to be.
Thank you, James. So now I'll turn to Pascal. To start off, we know that BDC offers different venture capital funds. When it came to Carbicrete, they applied for the Climate Tech Fund. Could you talk a little bit about the fund and how business is supported once they're selected? So yes, I agree BDC has a lot of different funds. I've been here for just over a year and I'm still trying to understand them,
in fact, we just announced that 250 million sustainability fund and we're the Climate Tech Fund, so it can certainly be confusing. And I'll explain a little bit more later about that. So I am in a climate tech investor in BDC's, clean tech practice and that we have a $1-billion venture capital platform that is split into 2 funds. There is a 600-million clean tech fund that was started in 2017 and it's been deployed to about 50 Canadian companies, but we're no longer investing in new companies from this fund.
And we also have the 400 million Climate Tech Fund that was recently announced in November and this one is an investment mode. And in fact, we, as you mentioned, invested in Carbicrete as the second of our 4 investments to date. So clean tech practice is part of BDC capital. That's the investment arm of BDC, which is the business Development Bank of Canada. And we also have 2 other divisions, the financial services and that's the most well-known one
that provides loans to entrepreneurs, and we also have advisory services. So my fellow panelist Dave at SDTC provides money to clean tech companies in exchange for environmental benefits. But we are a venture capital fund, so we invest in companies in exchange for shares or ownership of that company. So let's say, Chris, let's say you're Chris and you've created a new start-up.
And at some point you need money to develop and to bring a new technology to market. Well, most banks won't lend you money because you're a start-up. You're maybe not profitable or you don't even have revenues. So that's where venture capital comes in. So just making up numbers here, let's say you need $10 million and your company is now worth 100 million. We would get 10% ownership of your company and it's not just ownership though, like we have an active role in helping build these companies.
We typically like to have a seat on the company's board of directors and to help guide the company and create value so that we can all sell our shares down the road and obtain a good return. So technically there should be a win-win situation because Chris and all the Carbicrete investors all want to create value and build this company. So in general, because, like venture capitalists have a lot of companies in their portfolio, they've seen a lot of things by being present on boards and stuff, we've seen stuff that maybe first time entrepreneurs have not yet encountered. This is not the case for Chris, who's a serial entrepreneur, and the VC model in general is pretty well understood, and it's a risk-based model. So let's say out of 10 investments we make
let's say in climate tech companies, one of these investments will generate great huge returns. A couple will provide decent returns and many others simply won't provide any returns because they're going to go out of business. But that's normal. We take a lot of risk and that's how it works. The particularity of the Climate Tech Fund is that we do hard tech, clean tech, and that's different from other kinds of stuff. So hard tech, clean tech is anything that will be high CapEx, will have novel equipment, sensors first of kind technologies, plants, things that are very expensive and that reason there's a lack of capital and clean tech, hard tech is because it's long, it costs a lot of money to develop, just like renovations in your home. So typical VC investors, and there's a lot of funds with VC investors that like to invest in software companies because in this case you can have your whole investment cycle in a couple of years and that's it.
Whereas hard tech, clean tech companies can take 7 to 10 years to develop and create value and all that. So I would say in conclusion, if you're one of these clean tech, hard tech companies listening in on the webinar, here's what we look for before we invest, so. First thing, we need a technology that materially mitigates GHG emissions. That's our mission and Carbicrete does that really well. We need a clean tech, hard tech like I was mentioning approach, so it can't just be software and Carbicrete is a hard tech, clean tech company does that very well. You need to be at between seed stage and growth stage and our sweet spot is series A, series B and C investment. So Carbicrete is at that stage too, we need and that's good for the topic of this webinar, we need proprietary intellectual property and that, as James mentioned earlier, it doesn't necessarily need to be patents. Patents are great but,
but they can be other stuff like trade secrets and know-how. And you need to be raising funds. Of course, you want to have a venture capital investing in your company between 1 and 20 million and that was the case for Carbicrete. And we need reasonable timeline to profitability, of course like we're patient, we're more patient than most investors, but we can't be there forever because we have to return the funds to our shareholder.
And last but not least, we need an awesome super management team and of course Carbicrete has that. That's why we invested in them. Yeah. Yeah, thank you. So now we're going to kind of switch your hat from BDC to your experience. So you have a vast experience when it comes to IP and have worn all those different hats including the hat of the director of IP at Anaergia and Fibracast. What are some of the insights or lessons learned that you can share with us today, particular, particularly when it comes to clean tech companies? Okay, well, there's not that much specific about clean tech companies. I may have a couple of things, but over all, yes, I've I have had experiences on all 3 sides of the table assuming the table is triangular, of course, because I've been on the investor side, which is what I'm doing now, where we look at companies IP as part of our due diligence process as done by SDTC and others.
I've been on the company side, as you said, where I was managing Anaergias IP portfolio and I was also in a biotech company in the early 2000s that had IP issues, I'll talk about that a little bit later, but I've also been like pureplay IP side in an IP boutique drafting patent applications and infringement opinions so, yeah, I would say I've seen a lot on all of those 3 sides of the table, but some of the advice or I would say I've seen a lot of companies get marketing patents, what I call marketing patents. And that's sometimes, you hear: oh, if you want VC investment or if you want to create value you need patent applications, well, you need good patent application. You need good patents, not just any patents. So if you're just trying to get a patent for the sake of getting a patent and you don't really have an invention like if you have to invent what your invention is, then you probably haven't had that Eureka moment. So don't do it because people like SDTC upstream from us, or BDC, or any venture capital investor will review your IP portfolio, will look in details at the claims and what you've actually protected. So, it's not worth the time and the money to spend it on doing a marketing patent. On the other hand, if you have a Eureka moment like Chris had when he realized that the hey, the cement is a problem and we have this technology that you, you can make concrete without any cement, well, that's a Eureka moment. So for something like that, it's worth getting a patent,
especially if you have good claims, simple claims. Like James was able to provide, I've gone through the claims and they're very good because these the more simple the claim, the better the value. So that would be one piece of advice and James mentioned this as well, don't neglect your freedom to operate. Like it's good to protect your inventions and to develop your IP moat and portfolio, but you got to remember that the thing that you are commercializing may and will interact with the IP of others, so keep in mind you always, you always have to look at your freedom to operate from your products with respect to other people's patents. Thank you very much. We'll go to Sharon for the next few questions. So Sharon, Innovation Asset Collective is an organization launched by the Government of Canada
to assist Canadian businesses in the data-driven clean tech sector with their IP needs. So could you talk a little bit about IAC and how you support your members. Thanks Maya. I'm happy to be here today. So we are a nonprofit organization that is funded by ISED to help SMEs in the clean tech sector with IP.
Our vision is to revolutionize the IP ecosystem and how Canadian companies leverage IP strategy to compete and scale nationally and globally. Canadians are amazing at inventing, but Canadian companies are not doing so well in terms of owning what we invent, especially when compared to countries like the U.S. and China. In fact, the share of Canadian invented patents that are transferred to foreign firms has more than tripled over the last 20 years. This is not a trend that is healthy for the Canadian economy, so there's a need for Canadian companies to build capacity when it comes to IP strategy.
To become globally competitive, Canadian companies need to understand the importance of their IP and know how to build IP ownership positions to support their growth. This is what we are trying to support. We are a membership-based organization. So you have to be a member to take advantage of what we have to offer. We offer services in 4 main areas. The first is funding. We all know that SMEs can use more money, so we provide funding to help our members pay for IP expenses. We have a grant program as well that provides grants to members who can demonstrate that they have a sound IP strategy that supports a viable business plan.
The second area is IP education and strategy. Our education materials are business centric and our focus on practical skills. We're not here to train patent agents or trademark agents. Our goal is to give our members the skills that they need to be prepared when engaging external IP experts and to ask the right questions to get the job done. The third area is market intelligence, which includes sector-specific landscape reports to help members explore who the players are and the trends in their relevant markets. We currently have reports on smart cities, energy storage, data centers and the latest one is on precision agriculture.
So the last area is the IP collective. This is mainly for risk mitigation and it includes a patent portfolio and IP insurance. It takes a long time and a lot of money to build a useful patent portfolio, so we're building one for our members. The patent portfolio is intended to help our members defend themselves against bigger players who have stronger IP positions.
So one way to use our portfolio is, for example, if our members, if a member gets sued by a big multinational company, they can use some of the patents in our portfolio as leverage so that they are better positioned in the lawsuit and for settlement negotiations. Another way we help our members mitigate risks is providing access to IP insurance. It is very difficult for a start-up company to get IP insurance on their own. Through collective action, we're able to get insurance coverage for our members and at a much lower premium than they would otherwise get on their own. So this is IAC in a nutshell, please check out our website to learn more and on how to become a member.
Great, so now you have years of experience in the field of IP. You're currently a legal counsel at IAC. So what are some of those common scenarios you face when you support the IAC members with their IP needs? Yeah. So a common issue that we see is that companies lack an IP strategy. And even when they do have an IP strategy, they are thinking too narrow and too patent-focused. Pascal mentioned a lot of the things as well is that you know IP is not just patents, it includes trademarks, trade secrets, copyright, data and more. So companies really need to think broader when it comes to the IP strategy. And IP strategy also includes risk mitigation.
So your strategy is not only about what you have, but also what your competitors have. So you have to think about, you know, ways to protect your company from the other players in the marketplace. And a common mistake that I see is that companies want to throw their IP strategy to development over the fence to an external expert. This is not what we recommend, because you know your business best and your strategy has to be aligned with your business objectives and your goals.
Thank you very much, Sharon. Next we have David. So, David, I have a few questions for you as well, so, On SDTC's website, it is stated that SDTC finds funds and fosters Canadian companies that are developing, demonstrating and commercializing new technologies with the potential to transform Canada's environmental and economic prosperity. So, can you basically tell us a little bit about as SDTC and what it offers? Sure, I can translate for you in a moment because I know that's a mouthful. SDTC offers 3 streams of funding, so we have funding for seed, start-up and scale-up companies. Our seed program looks to provide small contributions. Again, these are these are non-repayable contributions different than what Pascal is providing which is equity funding, so non-dilutive funding for lack of a better term, grant, of $50 to $100,000 for a seed program for very early stage companies and that's what they're looking to do.
The path for that program is to go through one of our 90 plus accelerators across Canada. They nominate firms to us who are working with them and that's how you get to the seed program. We have 2 other streams of funding, so start-up and scale-up, they're looking to provide large contributions to Canadian small medium enterprises, the same companies that Sharon and talked about. Both accept applications on an ongoing basis. We have continuous intake, we call it.
Start-up is focused largely on early stage companies who aren't yet in the market, so not yet selling something, while scale-up is focused on companies who are already selling products or services into the market. If you go to our website, you'll find a get funding button at the top right hand corner. If you click on that, it'll take you to a form. You can fill it out and one of our team members will reach out to you to get some more details. So that's, you know, largely what we offer on the funding side. We have other supports we offer and as well. So we work with Innovation Asset Collective, Sharon's group, to provide, you know, referrals on intellectual property strategy and help there. We also work with the Canadian Council of Innovators on their innovation governance program, a program that helps train people to be on boards or you know what we often use it for is to help the management teams of the companies we funded understand what skills they should have on their boards and what their boards might be asking from them.
And then thirdly, we have another non-monetary support we provide to some of our founders. It's called NExT. It's the network of executive trailblazers. It's a mentoring program from some of our really experienced CEO's within our portfolio to some of the newer CEO's. Because when you're the CEO of a company, you have to make a lot of decisions as Chris would know that are extremely stressful and that you really don't have necessarily people to turn to to talk to about some of these things. So that's another one of the non-monetary supports we offer. Different question, how would you define a clean tech company? What are the sectors that these companies work in? Yeah. So we actually try not to use the phrase clean tech very often.
So we funded projects and industries from biofuels and solar power which people would consider very early stage clean tech to quantum computing and medical technologies and on to some alternatives like the Carbicrete provides. We consider ourselves technology diverse and we'll invest in almost all sectors if there is potential for significant environmental benefits to be had. Canada has lots of great companies, are often looking to do more with less in many different areas.
What we want to see is a company that has a reasonable competitive advantage and an IP strategy that can help sustain that. So you mentioned IP strategy, so you've supported many companies throughout your career, these companies, as they grow, what are some of the issues that they tend to run into and how important is that IP strategy and how do you assess it? Yeah. So kind of like Pascal. I mean, I've had a number of different seats at the table throughout my career. I don't know what shape the table is, but you know I've been on the side Pascal hasn't been on where we were looking to prosecute patents against other infringers.
Right? So I've worked with Nortel and then Rockstar, the Rockstar Consortium which was formed out of Nortel's core IP afterwards and so we would go after infringers. So I've seen many different things, right, that that can get you in trouble. What we're essentially looking for, you know, as companies grow is to start as early as you can on some of these things. Like, it seems daunting, right? But you have to prepare early for things that could become large problems down the road. So things like employment agreements and confidentiality, inventor ownership, those are things you can do really early that will help you later on. So you know, as an example, we have a portfolio company who has had to go after some former employees who've created a business that is doing exactly what they were doing. One of the things that's going to help them is the agreements they had with those employees around what you invented and what you can do with it when you leave here, typically around things like confidentiality and trade secrets. We have companies who, as they grow and scale and they're selling
products into the market, suddenly they become a problem for other companies who have established revenues, right, and are seeing this small company come and eat into that revenue. So they need intellectual property to be able to help them, but they also need to understand what intellectual property is out there and how they can prepare for that, because really building an IP strategy isn't just about just having a set of patents, it's about understanding the companies that could come after you in the future because you might be infringing on some of their IP, right? And that's where groups like the Innovation Asset Collective can help you with IP that maybe reads upon someone else's product that you didn't create, that's a big piece of it too. And then there'll be small little things that will come after you, like non-practicing entities. For instance, they're, you know, some people call them patent trolls that have just bought someone else's IP and are looking to monetize it, to create value out of it. And you have to understand how you can defend against that, right? What's the best way to move quickly to show them that either a) you're not infringing or b) that this is going to be a significant problem for them in order to try to get money from you.
So there's lots of things you can do early upfront in terms of building your IP strategy, but it's something that's going to evolve over time as your business grows and scales. Thank you. There are some questions in the chat. Some of the things were quickly covered, but I'll try to pull out 1 or 2 questions, because we do have time.
Because all of you have great experience and worn different hats. Let me know if you do want to answer the question. I'll leave it open and if somebody is interested in answering and if no, I will pick one of you. So the question is for companies that operate in multiple countries, example Canada and U.S. Would patenting in the U.S., which is a bigger market, be a better market to patent in first before Canada? So where you start filing your patent application and James can probably speak a little better to this than me, but there is advantages to filing other markets to start with. The U.S. in particular because of the provisional patent system that they have there,
but there's options in Canada to do similar things as well, so keep that in mind. But really what you're looking for in the end is patents that will read upon people who would infringe against you in the markets that they're doing business. That's what's most important. You probably want to protect yourself in your home market as well. If you think it's a significant market, you're going to sell stuff there. But really, when it comes down to the markets that your competitors are in and that you're going to try to take market share from them will be awfully important as well as making sure that those markets also have reasonably effective judicial systems to make sure you can actually defend your rights.
Yeah, yeah. If I could, I just, I just add, I think that's perfectly I completely agree David and the one thing I would add is that you probably want to target jurisdictions where you have the biggest potential you know, in terms of in terms of the market for your product and this will depend, you know, on the technology, on the type of business you have, if you have patents, what it is your patents are protecting so you might want to target places where you might have the greatest potential for sales for revenue. And that might be manufacturing that might as a secondary issue manufacturing, but usually most companies like to target the potential biggest markets for revenue first and then go down the line from that with obviously protecting in Canada being at everyone you know in forefront if you're based here. Next question I have here: So when evaluating an IP strategy, it might be hard to determine what secret sauce can be patented and which elements should remain as trade secrets, et cetera.
What should you have as a starting point before engaging with a law firm and/or IP patent / application firm? Yeah. So in general, I would say if your secret sauce can be easily reverse engineered, then you should patent it. If it can't be reverse engineered then keep it a trade secret. I know a lot of people think trade secret well it's free, and it's easy to do. Well, It's actually not that easy. You need to make sure you have internal processes to keep that secret a secret, because once a secret is out, you know, anybody can use it. Yeah, that's my 2 cents.
Anybody wants to add on that one, even though it's a great answer? Yeah. For example, let's say you have a very cool new process that is in a in a plant that has restricted access to it. That's the type of thing that you may want to keep as a trade secret, whereas as Sharon mentioned, if it's something you make and you and your competitor can buy it and take it apart and see how it works, then that's something that you'll probably want to get a patent on. But it's good to start the discussions early with your IP professional. And then the last question, I'll pick that I have in the chat is: as a start-up that's tight on funds applying for a patent and defending a patent is extremely costly. That said, IP and IP strategy is critical for raising funds from VCs. Do you recommend working with a law firm as a starting point despite higher costs versus working with a non-law firm that specializes in IP and patent application to keep costs lower? I would like to take a crack at that one. So as I was mentioning earlier, those marketing patent, sometimes you can have like a really well written
drafted patent, but the invention sucks. Or you can, on the opposite end, you can have a really bad patent. So and I've seen really bad patents and those are usually the ones that people want do in house and they say, oh, patent writing a patent claim is not complicated, I'll just read 2-3 patents and I'll prepare this claim. No.
Writing a patent claim is very complex and it requires a lot of experience and expertise, and you're not going to do a good job if you try to do it as smart as you can be. It takes years to become good at preparing patent claims, so don't do it in house, get a professional if you're serious about your company. I'd go back to some of the things that that James said before, like there's lots of stuff that you can do to prepare before you could talk to your IP professional that can help reduce the cost, right? So having a good idea of what it is that that your invention actually does, what some of the art that's out there in this space or you know, other competitors have done, because those all those things all take time for your IP professional to track down and the more work you can do up front, the better off they'll be positioned. Yeah, if I could add a bit to that, something else that was that was done of our company before we met Norton Rose, there's another law firm that they offer start-up packages. Maybe Norton Rose does this as well, but they can sometimes offer a bit of advice at lower low cost if they like what you're doing. I mean, because law firms are always looking to get new customers, new clients and this is another way to sort of keep your cost low.
I think there's a big range, you know, I think there's a maybe misconception that you know going to see a law firm or an IP lawyer or a patent agent is going to be very expensive. It sometimes in the past it shocked me how expensive some other entities still are, so there's sometimes the cost savings might not be as much as you perceive. And the other thing is I think someone else touched on it, you know, I think you want to make sure that the foundation if it's a foundational part of your business is solid. You know, this is kind of where the company is going to grow from, especially if it's early or core IP and you I think you want to make sure that's done properly, and good outside, outside counsel, good outside IP professionals, they're going to be sensitive to needs and costs and tailor accordingly but I think then at least you're you know you're going to be well advised. I have one last question and I want to take a few minutes for to hear your answers. It's what I call the $1-million question.
So what's that one piece of advice that you would give a start-up company or company just starting off or something that you've learned throughout the years that, if you were to start over from Chris more for you as a business start from the beginning that you wish you knew back in the day? So that one lesson that has stuck with you and you maybe it hasn't been mentioned yet, but you would want to pass on to a starting entrepreneur. So I'll start with you, Chris, actually. Make sure that you know where all the prior art is. No, but that's a simplistic way of looking at it.
But you know clearly, like there's you might have something very novel, but it does make sense to do your homework on the prior art as well as outside of papers, what other patents are out there? Because that can open up a whole of the hornet's nest of whether or not you can actually get a patent. And to Pascal's point, what's it actually worth in the end? So before you spend any of that, you know sort of that IP money, do your research by yourself and you can do that. You can ask the university to help you out with that, if that's where the patents coming from. They look at other patents around the invention. Thank you, Chris. I'll go with James next. Yeah, I don't know if there's million dollar answer for the million dollar question, but I think one is you know don't put your head in the sand and think that I don't have to think about IP.
You know, we use this term IP strategy and it can sound scary, but I think you want to make sure that you're thinking about these things and it might not be obtaining patents early on in, in the company's trajectory, but I think you want to be aware of these issues, and there was another, uh, I'm glad that David touched on it: make sure you own what you think you own, and that might be employment agreements or or making sure you have assignments in place, but you have to make sure that you own the IP that you think you do. Perfect. Thank you. Pascal, what's your piece of advice? My piece of advice is a situation that I have actually encountered, so I was working for a small biotech company. They were closely associated with the an academic lab, which is often the case, and the academic lab published the paper before the patent IP folks were able to file the patent application so that it was considered a disclosure and the company was not able to get full rights for the invention like in Europe, for example, due to grace periods and stuff, so I would say my my take-home message is make sure the company and everyone in the company is aware of of IP with respect to disclosure issues because if you present something at a conference or you do a demonstration of your product or stuff like that, it can be considered a disclosure and you could lose certain patent rights. So be careful about disclosures.
That's a good one. Sharon, your piece of advice. Yeah, mine is along the same lines as Pascal. You know, don't talk about your invention to anybody until you've talked to a patent agent or lawyer and this also goes to teaching yourself some IP skills, basic IP knowledge is it's easy to get these days. You know, there are many resources out there that are free. Make sure you know you spend the time and do your homework because you don't want someone billing you by the hour to teach you the basics.
That's another great advice. And last but not least, David. There's lots of things that you can do to start off, so I've mentioned some of those already. Look at confidentiality agreements. Look at your inventor assignment agreements. All of these things that they're processes you can build into your company. Right? And that will help you move forward and do things the right way. So create an IP culture within your organization that will help move things forward and make sure that you tackle all the bases, right, so, Often what we talk about is having someone within your business who is kind of the IP strategy chair or you know lead on IP. And I think having that person identified,
and giving them time to be able to put those processes in place can be really important. Thank you very much. Great advice all around. We're coming to the conclusion of our fourth and final panel discussion. On behalf of the IP Village, I would like to truly gratefully thank all of you for participating in today's panel discussion. I think that it's been a great conversation, a lot of great information and insights have been shared. We can really tell that your vast experience is pretty incredible and it's very appreciated that you made some time in your day to join us. And I'm sure today's conversation was very useful as well for businesses, especially the ones starting off or the ones already engaged in the clean tech sector.
So thank you very much. ♫♫