Why Being a Startup in Canada Just Got Harder

When Nikola Tesla invented alternative current electricity, i.e. the stuff that still gives power to nearly every home in the world, he tried to give it away for free.

His lack of business acumen didn’t lessen the impact of his research, right? Well there’s one person who definitely disagrees. And that wouldn’t be a problem, if he weren’t John McDougall, president of the National Research Council.

According to him, “Innovation is not valuable unless it has commercial value.” And that’s why, from now on, only research that has economic potential will be deemed valuable by the NRC and supported. While we can argue this every which way, the bottom line remains that it sounds like every single project at the NRC is now developed by industry demand. And this means the National Research Council of Canada just became a super-startup.

What does this mean for Canadian startup entrepreneurs? Consider the fact that the NRC has entire divisions for security and disruptive technologies, as well as information and communications technologies. They boast vast networks, state of the art facilities, highly paid staff and (if it’s commercially viable) practically endless funding. Oh, and they also apply for hundreds of patents every year.

Have a look at the paragraph below on protection of intellectual property by the NRC:

NRC maintains an IP portfolio of technologies (owned, co-owned and licensed in) that protects NRC’s freedom to operate and secures competitive advantages for future users of the technology. All arising IP will be promptly disclosed and assessed. The assessment process shall take into consideration various factors such as its relevance to NRC, NRC’s clients, benefit to Canada and commercialization potential. Resulting IP protection strategy will be determined, documented, and implemented. The portfolio of existing IP rights will be re-assessed on a yearly basis to determine its continued relevance to NRC and to NRC clients. IP protection tools used by NRC will include patent, copyright, Trade-Mark, Official Marks, Plant Breeders Rights, Industrial Designs and Integrated Circuit Topographies. NRC will also use Trade-Secrets when appropriate.

Basically, if you’re a startup, the government just became your competition. They have more staff, more funding and more patents than any startup in Canada—becoming a mega startup beast that may eventually devour its lesser brothers and sisters in the private industry. And while its focus may have been for the better of Canada and Canadians at one point, it is now clear that profit and commercial value rules. Science Minister Gary Goodyear confirmed, saying the NRC will respond exclusively to industry demands.

And, if you think private sector startups are still better positioned to know what those industry demands are, think again. The NRC has an entire division for research and business partnerships, where companies that choose to enlighten NRC researchers on what is most needed (i.e. what they are willing to spend millions on) get “advantages”:

Don’t get me wrong. I’m not calling for the death of private sector startups or of the entrepreneur. I’m simply pointing out that innovation, research, and development just got a whole lot harder.