IP Insights: Medical technologies
♫♫ Welcome to the third of our four discussion panels, where experts from various industries will share their expertise and experiences for inventors and entrepreneurs who are considering turning an idea into a business. IP is a crucial business tool at all stages of a company's development and to help Canadian small and medium enterprises, SMEs, better understand how to use IP more effectively, SME phasing departments, Crown corporations and industry associations in Canada have come together to create the IP Village. This includes our partners at Business Development Bank of Canada, Export Development Canada, Global Affairs Trade Commissioner Service, the Intellectual Property Institute of Canada, IPIC, and the National Research Council of Canada's Industrial Research Assistance Program, NRC-IRAP.
And of course, Innovation, Science and Economic Development Canada, ISED, and CIPO, the Canadian Intellectual Property Office. I would also like to give an extended welcome on behalf of the IP Village to Health Canada, and also Standards Council of Canada, as well as the Office of the Privacy Commissioner, who have participated in the past panels. So, in today's panel, we will start by hearing the interesting story of growth and intellectual property at Nicoya. And we'll be fortunate to get important take home lessons from the distinguished professionals who are helping companies grow in this industry. So, I'll introduce you to the panel today.
We will start off with Ryan Denomme, who is the CEO and co-founder of Nicoya Lifesciences. After spinning out of his graduate research at the University of Waterloo in 2012, he raised over $30 million in venture capital to commercialize the company's novel biosensor technology, Ryan has led the development of multiple successful products at Nicoya and now over 500 customers at world leading institutions for drug development and biological research. Ryan holds numerous patents in the fields of nanotechnology, microfluidics and optics. We also have Suzanne Sjovold, who is an IP lawyer at Anova Law Group and she has over 15 years of experience in the field. Having earned a Ph.D. in neuroscience before attending law school,
Suzanne combines her technical and legal backgrounds to work with innovators in the biotech, medtech and life science industries. She's a registered patent and trademark agent and is well positioned to assist their clients with developing an IP strategy and then implementing the legal tools necessary to effectively protect their IP assets. Suzanne is a member of the Intellectual Property Institute of Canada, IPIC, who are also part of the IP Village. And our next panelist, who works at the Business Development Bank of Canada, is also part of IP Village, that's Max Yam.
I welcome you back to the panel, you were here before. Max is an associate with BDC Capital's IP-Backed Financing team who are providing IP analysis and valuation support for all of their deals. Prior to joining BDC, Max was an IP analyst at Quantis, which is a commercial lender, where he developed patent analysis and valuation frameworks for new loans. We also have Cynthia Shippam who is an industrial technology advisor, ITA, with the National Research Council's Industrial Research assistant program. Cynthia has more than 20 years of experience in research, technology transfer, commercialization and IP protection with small to medium enterprises. She has developed and managed IP in a very, in a variety of industry.
Both in private practice and in-house, and her academic and professional experience, she's got a Ph.D., an MBA and is also a patent agent, provided with a broad technical background and she works with IRAP clients across the country in all technical areas on IP-related matters. Finally, we have David Boudreau, who is the Director General of Medical Devices Directory at Health Canada. He has a biochemistry degree and a chemical engineering degree from the University of Ottawa.
Dave worked as a process engineer before joining CIPO as a patent examiner, where he specialized in diagnostic devices as well as was a director of examination. In January 2018, he joined Health Canada. Finally, myself, I'm Lisa Desjardins. I work at the Canadian intellectual Property Office as the manager of the group developing IP education content for our presentations, the website, the videos that you see on CIPO’s YouTube channel and I'm also the English host for our podcast Canadian IP Voices.
So with that, I will hand over, shortly, to our distinguished panelists and I'd like to start with you, Ryan, to give us a story of what Nicoya has done over time. You have a very, very interesting development story to tell us. Go ahead! Thanks a lot for having me here, Lisa. I'm happy to talk about Nicoya's journey and leveraged IP at various stages of companie's life cycle and growth.
So just some background on Nicoya, we use nanotechnology, optics and microfluidics to make innovative life science tools. Our products are used by researchers and academia, government labs, biopharma companies, small medium start-ups and large pharma companies to understand diseases and develop drugs to treat those diseases. Over the years, we've developed a large IP portfolio that covers many different aspects of both our current and our future products, and we have a lot of experience in different ways of obtaining IP and how to operationalize it internally as a business. We started off as basically self-funded business. We bootstrapped for the first couple of years of our development until we had our first product ready.
Over that time, we really didn't have a lot of capital that we could put towards IP protection, which it typically is something that's pretty expensive to do, especially when you have to balance all the different demands that come with you know developing a hardware product. And so it wasn't something we could really prioritize that much at the beginning, but we still did manage to get some core IP files and as we've evolved the company and we've been able to raise additional capital that's evolved over time to be a bigger and bigger area that we invest in. Many, many mentions of the word capital there and I would like to ask you straight ahead. I know the main challenge for many inventors is that to find that balance where you need to talk about your invention with an investor, but you can't disclose too much but you need the money to go ahead and file for IP protection. So, you've taken some of those steps and been successful in raising funds, while you have been establishing your IP portfolio.
Explain the funding rounds and what IP protection and products, did you develop over time? Absolutely. So the first thing you mentioned there in terms of you know how you, how do you actually talk to investors and not disclose, you know, your core IP, and it's a bit of a chicken and egg problem because you want to protect it, you need the capital to protect it. I think it's a really important topic.
Most investors won't sign an NDA, you know, before your first meeting, and even after a couple of meetings, they still might not be in a position to do that. And that's not something that's like a malicious thing, it's just they have so many companies that they need to meet with, it's just totally not feasible for them to be doing that with every with every company they meet, and it also does add a lot of friction into that initial couple of meetings, which can be really hard to get as a really early stage business. So you want to remove those points of friction before you're going to meet with investors, but certainly once you start getting into the details of your product and your technology and your company and you know typically if they ask for a data room or more in-depth information that's when it is definitely appropriate to ask for an NDA so that you can make those disclosures without having to worry about it impacting your ability to file for IP in the future. So you know, you definitely need to be really cautious and smart about it when you're first meeting investors until you get to that stage and giving them enough information to understand your product and its innovative features in nature, but not enough to warrant a disclosure, and I think you know, in most cases it's usually pretty easy to to keep things high level enough on the technology front for the first couple of meetings and it not really be an impediment to moving forward. But it's also important to do some homework on this and on the investors you are meeting with to gauge risk.
Obviously, if the investor you're talking to has invested in a competitor or a closely related technology to yours, you might want to hold off on discussing with them or you might want to try and get an NDA in place right from the beginning in those types of scenarios. For us going through the process of filing IP and raising capital, it's been sort of a step wise change over time and balancing IP filing and investments with funding, it's a constant work in progress because even when you know you do raise the capital, what happens is you're going to hire more super smart people and they're going to have more ideas that you want to protect and so then your IP investment and your IP budget is going to increase. And so it's really a never ending cycle. It's really important to be able to have a system in place to really prioritize strategically what types of things you're going to be investing in to protect, and which ones you might not, or you might delay for the future. For us, I think in the first couple of years of the business before we had raised any outside capital, we had only filed one or two patents and this was over a you know three or four year span. And there's definitely more we could have filed and more we could have protected had we had the capital to do so.
But we just picked the things that, you know, were most core to our product and we did these at a really low cost. So we drafted a lot of the key, you know, content ourselves and then we just had a patent agent sort of do a review of it and file it. You know, this takes a lot more time on your side, but it does keep the cost down. You can also look at in addition to writing them yourselves or with your team, potentially looking at a technical writer, which can be kind of a lower cost alternative to going directly to a patent agent to get a first draft finished and you know when you're, when you're analyzing different options out there.
Some of the like the really large firms, might be on the more expensive side to work with for filing IP. So sometimes looking around at some smaller, more like specialized or local firms could help reduce the cost. But in any case I think it's good to, you know, not be afraid to discuss the costs upfront and try to get a sense of what it will cost, and most early stage companies will be able to find a law firm that will work with them and with their budget in the hope that they will continue to grow as a client. And that's definitely what we did over time. But after we raised our series A round, we were able to begin filing our IP at a much more aggressive cadence. We set up a formal process internally for IP generation, capture, review and filing, and we even incentivize and reward inventors at each stage of the patent filing process to encourage that line of thinking.
And it's I think it's important to do this and develop sort of standard work around your IP strategy and make it a core KPI of the organization. And we did all these things and we saw really valuable increases in IP, going from, one or two filings over the first few years to one or two filings every month over the last couple of years. So yeah, that's kind of been the journey that we've been on and I don't think there's that ever like a right or wrong way of doing it, but I think it's always good to see what other people have done. That's great, I think it's a great illustration that IP and business strategies, they need to be aligned and that's something you're going to have to keep your eye on constantly; thinking about the finances, how much you can disclose, keeping your costs down while at the same time protecting your core technology.
Another thing, obviously in this industry, there are many other patented and branded technologies. There's consumables, we have materials, there's instrumentation. So you're almost forced to work with others and their IPs. I was wondering if you could comment a little bit about how you've worked with others. It's a great question, and even in the most sort of niche areas of technology, there's always people working on these things, there's always you know IP getting generated that could be valuable for your business to consider and licensed technology we've acquired. We've jointly developed IP over the years, a number of different ways.
I think licensing is really important for a lot of different reasons. One is just getting freedom to operate by having a license to background IP is really important and this can be important for a few reasons. First, the most obvious is if you're infringing on someone’s IP. They could of course take legal action against you.
The likelihood of that happening in reality though, as a small company that's like pre-commercial, it's really unlikely to be, it's not like a realistic problem to deal with the beginning stages of your business, but... but as you, as you go on to raise capital from investors or you become, you know, a huge commercial success, you know that's when things can start to become, more of a problem, and so you want to ensure that you at least have an idea of what types of background IP you might need to license, and what that might cost you to get, to get done, because that will give you a sense of what it looks like. Have you be well prepared and also you know, give your investors and other partners a lot of confidence in what it would take to get to secure those licenses or other rights that you might need. I think the other, you know, reason that you might want to look at licensing or acquiring IP is because you're going into a new area and you want to obtain some protection before you start to invest a lot of your own resources into building a product or a team around that and, you know, it's a nice way that you can expand your portfolio and build on that pre-existing portfolio, from somewhere else to really get like a fast track into some initial protection and that can be a lot less expensive sometimes than, than developing things from scratch, which kind of leads into the joint development IP piece. I think that's a really interesting way to generate new ideas and protect them while still having typically a lot of control over it, especially true if you're working with academic or government groups, you know, you can act as a commercial vehicle to bring those things to market.
And I think there's often significant grant funding, obviously to help those private public partnerships to be successful. And it does take time and effort to understand the nuances of how those agreements work and IP protection to make sure you have the rights you need and it's all like all parties are happy but it can definitely be worthwhile. That's great. I'm going to turn over to Suzanne because we're talking about early staging mentors and, and, perhaps some, we have some in the audience. You help companies like Nicoya to file for patent protection, but filing for protection isn't just about protecting your invention. What are the main questions that you think that people should ask themselves before they even think about filing for a patent? Thanks, Lisa, I think that's a very good question.
And I guess if Ryan could go way back in, in his memory bank, he may recall that early stage in the process where he, you just have to first, understand intellectual property. So out of the gate, I often get phone calls from individuals who don't necessarily even know the different types of intellectual property and how they're protected or what they can protect. I'll get a call that the client wants to patent their logo or copyright their brand.
You know, they're mixing up the language because they aren't sure how to use the technology to use the IP legal framework to protect their assets. So I think it's important to back up and even just start with the 4 different types of intellectual property and Nicoya is a good example of that because they had protected broadly all of their assets under the various forms of intellectual property and I know we're focusing on patents today, but I think it's important for people to understand, that patents are... for the modifications and the improvements to the systems. And how those systems can be used to protect, they're protected by patents, so how does it work? Whereas the trademark is the name Nicoya for example, or their logo or the open SVR brand that they use to market their technologies and that's protected in a different way under trademark. Copyright might protect the operations manuals that are created to explain the technology and how their customers or consumers use the devices. And then industrial design is another form of intellectual property that Nicoya has obtained, where they protect just the aesthetic appearance of the device itself.
So not how it works, not its brand, but just its actual aesthetic appearance. And I think that's important because when you're developing an IP strategy, you don't necessarily know about all the assets that you might have in your database, in your bank, and those can each be leveraged as assets to build value for the company. But just focusing on patents specifically, once you have a clear understanding of the technology that you want to protect, I think there are some questions that you can ask about the patent system generally in order to decide your strategy going forward.
Patents are by far the most expensive form of intellectual property to obtain, and as Ryan said at the early stages, that can be a big hurdle for start-up companies to overcome. So how do you navigate that? The other thing is patents take a long time to obtain. So if I file your application today, it could be four to six years before we get that patent issued. Is it worth the paper it’s written on? Four to six years from now, if your technology is going to change so much over that period of time it's not worth filing.
So, there are some considerations there if you do decide to go ahead with the patent protection, the next question to ask is how do you best cover the technology? So Nicoya again being a great example, has technology of patents on fundamental systems and instruments that are... in a way crafted as platform technologies, and then they also have patents that protect the use or application of that technology for very specific analyte detection for example. So there are different avenues to go down. With the patent protection, even when you're just talking about one device and how to best protect it. The next question I guess would be about the strategy.
As Ryan mentioned, there are many reasons to obtain patent protection. Obviously exclusivity in the marketplace, to have that monopoly of the technology is a big one. That said, many medical device technology companies aren't going to sue the end user, the clinicians or the patients who are using the technology, they want to sue the competitors. And so, the patent can be crafted or tailored to address that particular strategy. Some clients may never sue, but they simply want that patent pending protection in order to aid them to get the funding to be able to talk about the technology, to be able to get the commercialization of the device that's required.
And then some clients I have filed simply for marketing initiatives as Ryan said, you can target wonderful innovators in the industry, up-and-coming engineers, and show them how innovative your company is by developing a large portfolio that can be incentivized. So there are many important considerations, I think, and ultimately they are business decisions, but as you pointed out, Lisa, I think it's important that patent agents be involved at least to assist in the understanding of the assets and how best to protect them and then hopefully to determine the best cost strategy going forward to add value to the company. Absolutely and thank you, Suzanne. It's great that you remind everyone that IP strategy is a whole portfolio different right. Moving forward, I was thinking about the different rights that we have now at hand that Ryan explained and that Suzanne has explained as well and I wanted to turn over to Max to ask you, Nicoya has come to BDC and were requesting funds.
You have IP-backed financing and you would go over their portfolio. So can you explain how you carry out the valuation? And perhaps give us some of the highlights in the case of Nicoya that contributed to why you decided to give them a loan? Sure, when we start looking at any sort of company, Nicoya or any other that we've mentioned before, we spend a lot of time sort of looking at two tracks, two components to this, looking at the value of the intellectual property and then also looking at the credit aspect or business aspects of the company and we find that the two are often very complementary in providing us information from one side and from the other, then providing good feedback. So we use things that we learn, let's say during the IP process about potential competitors that are in non-aligned sectors. In Nicoya's case, there's a lot of use of digital microfluidics and we investigate other areas where this may be used in the future or, may potentially offer licensing opportunities or exit potentials for them.
And in the same way we use information from the credit perspective to give us an idea of what's happening on the business, their ability to actually grow and execute on the strategy that they've developed for intellectual property and understand how to, for them, best protect whatever they've developed and I know Suzanne talked about using the overlapping rights for intellectual property protection, and that's something that we spend some time looking at. As well, trying to make sure that the company is using best opportunities for them to protect consumables with trade secret protection or patenting. Depending on how visible it is to potential competitor or acquirer, if they're looking to potentially reverse engineer or use that technology in in different ways. One of the things that I think Ryan had mentioned, is their process for tracking, the development of their product new features, and then seeing how that fits best to the different types of intellectual property protection. And as we were going through the process with Nicoya we found that pretty impressive because, within that and I think this probably comes from some of the earlier experiences that they had around either delaying or having sort of those, no go or no go's evaluations on trimming the application process to be more relevant to the future development of their technology, or more relevant to new upcoming features. Excellent.
I was thinking that there are also some of the managerial and some of the softer aspects of developing a kind of company. Cynthia will speak to some of that, but I wanted to ask you Max, in an industry where you are actually very highly dependent on not just technology, but key opinion leaders and collaborations, how would an investor look upon this, these kinds of relationships and when an applicant is looking for money? Yeah, that's a very good question as well, and something that we try to consider when we're doing our due diligence process. We're more of a generalist fund, so we don't necessarily specialize in one field or the other, so we rely a lot on external experts to give us advice when we consult them, but also evaluate within the ecosystem, how well regarded a company is from, let's say key opinion leaders and we find that helps not only us understand how well and how competitive a company's technology is and what the benefits may be, but it also gives the company the ability to build their brand in a probably more cost effective manner and address some of these key opinion leaders, or in other fields you'd call them influencers, for how this product might be used or how they may be helped in terms of development for future products or features. It really does go back to complementing the overlap between intellectual property and business understanding.
Thank you, Max. So Cynthia, you've helped a number of companies helping them scale up their technologies and I know you've got experience from medical technologies. What are the major threats to a company that is just about to start off in this field? When I saw this list, I thought the major threats, like this is a list as long as your arm and I don't want to be all black cloud and scary and you've got changes and increasing costs cause nothing ever seems to go down. Complexity, you can fall apart in regulatory, you might not get the market traction you need, as Max mentioned, having the...
KOLs and other people in the industry going "hey, this is cool stuff" helps. Sometimes you miss the market altogether. What you think was a problem wasn't or everything switched and it's not there anymore.
Science sometimes doesn't always work the way you think it will or it doesn't work the way you think it will when you scale it up, or the particular technique you want doesn't scale the way you think you do. Competition comes out of the woodwork. We all want to be able to predict everything, but you can't. And so now that we're all scared, we're gonna run and hide under a rock, this is all actually really normal risk. It's, everybody gets it when I talk to start-up companies with IRAP, this is a normal part of the conversation.
What are all the ways this can break? Whether it's did you file your IP in time? Did you get the key use? Did the technology evolve from your original filing? These are all normal things. The one thing that is the scariest is when we hear the "oh we have no competitors". That isn't accurate because there's always something that you didn't see coming. And any technology you bring to the market, medical drug, engineering, is always in the view of what came before you. So the status quo is a competitor of itself and so when you're figuring out your fit, you actually really do want to understand the status quo really well and knowing what happened.
And that's the first step in to certain minimizing those risks of being blindsided, something you didn't see coming. No "if" planning, it's all that uninteresting, work out your spreadsheets. Look at your cash flow models, figure out how long something's going to take and then add in some time and money buffer.
It's not the exciting stuff, but it's critical and helping firms deal with technical, this is exactly where IRAP plays. So we have these conversations every day. At the end of the day, however, the company still has to do their homework. And they have to know where they fit. They have to really understand their market and then understand the subsectors of the market, because nobody is building a technology to do everything for everybody or you know, you're not going to find every analyte under the sun, some are too hard, some might be not relevant.
That could all change as new things come around too. So homework becomes critical. What are the regulatory needs? the sooner you understand that path, even though there's a whole bunch of unknowns and work to do, as soon you understand that path, you can focus, you could speak to the actions you will take in an informed manner and that also de-risks it.
And when you're talking to investors, you don't have the answers in neither do they but the fact that you've thought about the question, this is going to be a thing we have to do, we're not sure how we're going to do it yet, but this is what we know. Here are the experts, here's the resources we can access. That gives them a certain feeling of comfort going, "oh, hey, okay, this person's talked about these things", and then you figure out together because if you're doing new technology where there's going to be patents involved, by definition, you have to be doing something new, so there isn't a perfectly clear path in front of you.
You have to figure out how to walk that and knowing how the IP fits in there, figuring out how the investors fit in there, who are the key, that that's all part of piecing the puzzle together, the way I will sometimes suggest you do this is like a thought model is tech, time is a straight line. This is how humans think about it from left to right, because the way we read and if you put sort of your technology and your company in the middle, turn around and look behind you, what's back there? Where are all the problems? What are the gaps that you're addressing? Why are why are you doing what you're doing? Because there's a gap somewhere get all that figured out. This starts to form the core of your business proposition. It doesn't exist in a vacuum, it exists from what came before.
Now turn around and look the other direction on that line and know you're somebody else's past looking into your future. What are they going to say about you? What is out there? What are the black holes that, and you'll have a lot of them, but start breaking this down and it's not one big massive unknown. It's a bunch of smaller things and you have to carve it up. And the biggest threat to any company, including any tech, is not continuing to do that effectively and staying on top of that pile, I don't know what else to really call it. But Ryan raised a good point at the beginning as well about balancing that tension between filing and funding and timing, and investors...
and early stages, it feels like you have to do everything simultaneously and you don't have enough of anything, whether it's money, time or hands, and that, you're actually right that, that is... that visceral feel of being caught in a bit of a tornado is actually quite accurate you are. But at one point, you'll find, keep... plugging as you will find a piece of information that drops out. Okay, there's a set point and now one piece of the chaos has fallen away and you have an answer. OK we've got our seed funding.
I found my key science partner, I figured out how to describe how I make my magic drug molecule or whatever it is. And now that's a piece of certainty, and you can stand on that rock and keep going and knowing what came before you gives you the ability to talk freely because you can speak about what is in the public domain. So understanding that's well worth doing.
But I guess it becomes an acquired taste to go through that critical view of yourself and your operations and what your potential hurdles could be, but yeah, very good reminders that you've got to confront the challenges and don't lie to yourself and get too married to your idea. Do you have any examples you’d like to share or that you really feel that people can avoid? Part of it is sort of helping you feel a bit feeling, at least there's a lot of stuff with sideways. You're going to make a mistake and the issue is minimizing the impact and don't do the same mistake twice. Be creative enough to come up with a brand new one, which means you're learning.
The "it didn't work" is a unit of information, patent agents would kill for the journal of negative results because the stuff that doesn't work derives and presents enormous value to show how the stuff that does work wasn't, "oh well, duh, of course you would do it that way," which is a comment on obviousness when you're playing the patent game, it might be new but now you have to say why wouldn't somebody have done this? And the fact that there's a lot of ways it didn't work can give you boundaries. And so ignoring the stuff that didn't work I think is a huge mistake to one can definitely avoid. And also it's not about your technology, it's about the problem you solve for somebody else.
So shiny technology is great, AI, high, tech, cloud data, blockchain, add all these things to it, fantastic. It's got all sorts of of great stuff. But, whose problem is it solving? And how badly do they need to solve that problem? And if you can't find someone who needs to solve the problem badly enough, are you actually looking in the right sector? Cause you've probably found a problem to solve, but you're not talking to the right customers and so customer validation or more correctly not doing that becomes another big mistake. In the medical field, understanding who's actually paying for this, it becomes critical. In Canada, we're a very fragmented medical system and so just cause you've come up with a new machine or an essay or a drug, people think, "oh, I'm solving the patients problem."
Well, maybe you are, but they’re not paying for it. So who's actually paying for it? And the beneficiary of the product might be completely disparate from the person writing the cheque. And that's not an easy relationship to knit together. On the good side, lots of other people in the field have to solve the same issue, so there's lots of feedback in the in various industry groups, life sciences organizations and all these sorts of things. So definitely get involved with peer companies. Who else is doing stuff? Who is in your network? They're not doing the same tech as you, but they've probably had to solve a similar issue as you have.
There you go, people, now you understand why you need to talk to IRAP. And they're going to give you all the questions you should be asking yourselves. Thank you, Cynthia, it's always great to have your insights.
Because we're talking about medical devices, it's regulated field, we're very fortunate to have David with us today. So I was going to hand over the microphone to you to tell us about how medical devices are regulated in Canada. Medical devices are regulated in Canada through the Medical Devices Regulations, so, this is something that we're doing at Health Canada as the medical device regulator. That would be the equivalent of the U.S. FDA, for instance, in the United States and the Australian TGA or so there are many regulators like that, each having their own regulators. So, the approach that we're taking for regulating medical devices is on the risk-based approach, and so, we're, the way we're doing this is that there are classes of devices from class one to class four, and the higher is the risk, the more we're going up the classes, so class one being the lower risk devices and class four being the higher risk devices.
So example of how we're doing this, if we're for instance, taking some, some COVID product examples of medical devices, because we're so familiar with these nowaday, so a class one would be the surgical mask, the gowns, the class two, it would be the thermometer, class three would be the ventilator we've seen in hospitals and then the class four would be those COVID tests COVID test for, that we've became quite familiar with. What we're also doing is that we're regulating with different requirements as, that are in accordance with the risk of the device. And so there are no pre-market scientific review conducted for class one and class two devices, but for the higher risk ones for class three and class four there is this pre-market review conducted by Health Canada scientific reviewers. So this review process is one that is taking 75 days for class three, 90 days for class four and this is for the issuance of a first, a first action like a first decision, and so there could be some back and forth between the manufacturer and the department, until we will end on a final decision, either refusal or it could be a license and so, granting a license. So this process I was, I was listening to my colleagues here on the panel, Suzanne, talk about the IP process to getting a patent, being a long process. It's a very similar process to getting a license, so if I could, you know, give one word of advice, the earlier you start this process, you know the easier it will be for you the manufacturer to entering, the market.
The license is for the purpose of selling, distributing a medical device in Canada, so without this license it's not possible to distribute or sell the device in Canada. For the lower risk devices I was talking about class one and class twos, so these, there are for class two devices. There is no scientific review, but there is still the need for obtaining a medical device license, and there will be a need for providing, demonstrating what we call a medical device single audit program certificate, which is to demonstrate the quality management system that you have in place for the manufacturing of your device and so that's the case for class two, three, four, having this medical device, single audit program and the MD SAP certificate and for all class of devices from class one to four, if it's not the manufacturer, but rather an importer, a distributor, there is a need for a medical device establishment license, which is more an administrative process, we call it the MDEL, and so for class one, that's the only thing that is needed. Having an MDEL in place for distributing, selling a medical device in Canada.
So that's their review process, the pre-market review process and the granting of license. There is also this other area that is being regulated in my in my bureau, which is the investigational testing authorization, ITA. Also, more commonly, also referred to clinical trials for medical devices. So if you need clinical trials, clinical studies to demonstrate the safety and effectiveness of your device and you're conducting your study in Canada, you would also need an authorization from the Health Canada for conducting this study and demonstrating the safety and effectiveness of your device navigating the regulations of Health Canada medical devices regulations can be done through our website.
So we do have something that I think is quite cool, quite nice, which is the e-learning tool or the e-learning device advice tool that we have on our website which is a training you register for free. You do this at your own pace when you want to do it and you would really learn how to navigate what are the different requirements, where to find all the different guidance documents for instance for understanding you know, the filing of your application for a license, so that's the one tool I'd like to share today with you. The other piece is that you can always communicate to us we have also a link to communicating with the medical devices directorate. You can connect with me on LinkedIn and we also have great services that we could provide to manufacturers. They can meet with me and my team through what we call pre-submission meeting and so we can help you know, making sure you're going through all the requirements.
And also pre-clinical trial meetings as well, if you're looking into conducting trials in Canada. Happy to discuss, happy to answer any questions in relations to the regulations of medical devices. That's great.
Thank you, David, that's a lot of helpful information. Somebody was asking in the chat while you were talking about some of these kind of peripheral systems that you would rely on. So the question was how do you classify other medical software technologies like for example, electronic medical records or electronic health records, are they also subject to these regulations? The definition of a medical device for Health Can- for the purpose of Health Canada medical devices regulations is that the device has to treat or that, you know, help in the diagnostic or the treatment And so if there is no direct link to the diagnostic and to the treatment of a disease or condition, physical or mental, it won't be considered a medical device, and so the few examples you just provided to me here, I don't think would qualify as medical devices. However, as I said, if there were some questions related to the classification, you can always send an email to us in the address that I provided in the links.
And we'll gladly provide guidance as to whether or not this would qualify as a medical device and if so, we can discuss the classification as well. Thank you so much, we have been getting a question for Ryan. Someone is asking if you could elaborate a little bit on that internal structure that you mentioned when you set it up and capture file IP at an increased speed postage series A. A great question, I think there's lots of different ways of doing it, but how we do it is we kind of have like we treat it as like a sales funnel almost. So we have sort of different stages of the process that a piece of IP can be in.
You know, the first is sort of like an ideation stage, we're just sort of dumping a bunch of ideas into a you know, kind of a document and then, you know, sharing that with other relevant people to get their input on it as well. And then, you know, we may might spend a month between meetings and in between meetings, new ideas get, you know, put into that funnel and then at the meeting, that we would have on a on a regular cadence with a group of people at the company that are technically inclined in a lot of the different areas that the IP might cover, meet and look through the new, you know, ideas that have been submitted and discuss their, you know, relevance from a technical perspective, but also from a commercial perspective and then basically decide what we want to do with those ideas from that point on, that could be, you know, this isn't something that's relevant enough for us like let's just sort of, you know, reject it could be something that this is interesting, but we don't have the bandwidth right now. So it just kind of goes into a parking lot, it could be something that is action on right away, so this could be really interesting, we want to start getting some initial data on it, we want to start writing up a disclosure and get it filed soon, and then another one could just be just expand on the idea and revisit it later. And so depending on where the idea goes, it kind of goes into a different path on the funnel and then a second part of that cadence, that's really important is also looking at the stages of the other patent filings that you have as they come up for various deadlines and various reviews as well as office actions from various patent offices.
So that's sort of a high level way we look at it and use JIRA to manage it just from a software perspective, but you could use other stuff like Trello would work really well too. Just one thing I'd like to add on to Ryan's point is that the culture that the organization has is also really important around sort of pursuing that continuous innovation and dedication to sort of recording all the information possible for documentation that really helps support future applications, and I think one point really latch on to that that he did say is the decision points around how to protect and if something is relevant or not, I think that's really, really important because one thing that I often see with companies is they don't have that level of restraint and when they're out filing, they sort just going to filing spree coverage in any jurisdiction for any small inventions, so making sure that they have sort of those targeted applications is another really important component. Yeah, absolutely, good point, thank you. We have one round of closing remarks, I was going to ask you, let's say you were standing in an elevator and you heard this entrepreneur talking about their idea and you're just dying to help them. So see it as a reverse elevator pitch to this person, so if I start with you, Ryan, what would you tell an entrepreneur who's about to embark on a business in this industry.
It probably depends on what day it is, because I might say don't do it. No, I think looking at it from the purely the IP lens, I would you know the advice I would give them is that the IP strategy you know can often be just as you know, important as their sales or marketing or product technology strategy. So really spend some time to learn the basics of IP. I think that's something that Suzanne was talking about, you know, just like understanding the language, what it means, what the process is like as a CEO or entrepreneur, you need to be able to wear many hats from, you know, understanding the market, the technology, finances and IP is another one. And for some businesses, it's more important than others, but if yours is one of those where the intellectual property is a major, major asset in the organization, that is something you need to put time into understanding so that you can be, you know, an effective and effective leader for the team and help drive that forward.
Fantastic, and I got to plug into that to give a shout out to my colleagues who I know are on this call, CIPO has excellent IP advisors across the country that are here to help you and have a discussion and inform you about IP, that discussion is for free, and it happens daily with Canadian enterprises, so please reach out to us for a discussion on how you can learn about IP. Suzanne, what would you tell the entrepreneur? That's a very good question and I agree with Ryan, I think it probably depends on the day. I mean we call it a gauntlet of fire that the innovator and entrepreneur has to run in order to get that technology to commercialization and the length of that gauntlet can depend on many, many factors. I think if we have an elevator ride my advice would be to find a good team, people that you trust and that you can work with in a meaningful way, it is extremely important and I think that's true for patent agents as well, I get very frustrated when inventors tell me that the patent was filed and they didn't know what it meant because it's legalese and they didn't even read it and that drives me crazy, because it's supposed to be written in their language so make sure your team answers your questions.
You understand them and you trust them, and that may take time, more than one individual and may actually take trying many individuals, but to have that guidance I think is invaluable down the line so that things are done properly now and then don't need to be fixed later on. Absolutely, and Max, you sit somewhere in between companies that are starting up and they're about to scale up, what would you tell them? Yeah, I think really what Ryan said, hits it on the head, business and IP strategy really need to be be aligned and complementary to each other. And again, for us like IP value is a dollar sign, but it also helps us understand the business. So, making sure that the company knows what they're going to be protecting, and where that value is very important to us, but I'll also mention something again that Ryan had mentioned, it is knowing your audience, for us when companies come to present and give their pitch, it's very helpful for us to know sort of what they think their key assets are, so we can also do our due diligence and understanding and confirm that as well. Probably be prepared to sum things up.
Absolutely, what about you, Cynthia? What would you tell the entrepreneur? All very, very good ideas, but if you wanted something just sort of right on the wall and look at every morning, the words of wisdom from one of the mentors out here was be less wrong, don't aim to be right. We all want to be right, we're scientists, we're engineers, we like right answers. The realities you're dealing with, the market and customers and problems and those things are a shifting landscape, and so try to be less wrong. You'll feel better and you'll be less frustrated, but you'll actually be approaching it with a broader mindset.
And my other key point to carve on the wall would be no random acts of IP please. So if you're going to file something and you're going to invest in it, be able to tell the story of why you did and what it's going to do for you, and that might also force you to start testing the be less wrong things like was this really a jurisdiction to go in to? Is this really the branding I need and why? And it opens up more questions which you can only win when you answer them. Absolutely, and David, what would you tell the entrepreneur? Probably tell the entrepreneur the sooner you know what is, you know, the device you're managing, you're you know, you're intending to manufacturing and selling and you know the classification. The sooner you'll know what are the requirements for regulating and then you know licensing these, and then you'll know for instance, if you'll need a quality management system, you know through ISO 13485, you'll know if you need some clinical studies, etc, and that takes time, we're talking about months and years, and so then again, the sooner you can fully understand these, the easier will be the road. And as you pointed as well, I think Lisa, this is important on the IP, but as well you know from Health Canada perspective never hesitate to come to us.
The sooner we're in a position to engaging with you and we're not a black box, we're true individuals here, well, we're here to support and we're here to provide all the guidance that is needed for you to going through you know the regulations. Thank you so much, thanks to all the panelists. One final piece of information I'd like to forward from our trade commissioners is that they have their program called CanExport in which you can claim some IP expenditures as you go abroad. CIPO has many of the programs, including BDC, CanExport as well as IRAP on our website. You can go to our website under "Commercializing your idea" and "Help for entrepreneurs" and you'll find all of these programs there or you can contact anyone in the panel of course. My extended thank you to all the panelists and all the organizations who have participated today, asking us questions.
Again, we're here to help, this is why the IP Village has been created to make sure that we all have a common view on IP and that we can help you across your journey. Special thanks, of course, to Ryan and Nicoya and Suzanne, who have been here from their spare time, I very much appreciate that. And I wish you a wonderful afternoon and again, thank you so much for attending today's IP Insights.