Standards and Intellectual Property: two peas in an innovative pod

Based on feedback from Canadian industry, it’s fair to say that most entrepreneurs don’t automatically connect the idea of their intellectual property (IP) to the world of standards. Usually, the idea of standards comes into play when their product has to interact with another product or system, or when they need to adhere to a standard to commercialize. However, to miss the connection can be a costly oversight for Canadian innovators. 

Standardization and IP are both important strategic approaches to promoting innovation, facilitating market access, and developing competitiveness. Unfortunately, the relationship between the two approaches is not always well understood. This is primarily because standards are intended for collective use, while intellectual property rights (IPRs) are destined for exclusive use. Nevertheless, the two aren’t so different, and can be useful allies.

Let’s say a standard is being created for teleporter technology to take us effortlessly to a coffee shop to fuel up before our fifth meeting of the day. To work efficiently, the teleporter needs to incorporate a specific technology, one that is patented and market accepted as essential, or, in other words, Company Z’s IP. That’s when tension can erupt. To resolve this issue, IP can be declared and embedded in the standardization process and become a powerful tool to advance innovation and commercialization. IP can influence standards development, create opportunities for product/service certification, or help innovators create more interoperable technologies.

It takes two flints to make a fire. – Louisa May Alcott

The beauty of partnership

Standardization plays an important role as a partner in the use of IP and its successful commercialization. Standards and IP both foster innovation. On one hand, standards enable interoperability and knowledge-sharing, while ensuring quality, safety and reliability of products and services. On the other, IP provides exclusive rights to the technology owner allowing a return on investment (ROI) by being the unique provider of the technology or by licensing. 

Leveraging standardization and IP as part of a company’s business strategy brings important benefits: greater market access; increased market intelligence and sector foresight; reduced uncertainty about future developments in products and processes; greater use of IP for competitive advantage; and increased influence in creating future standards and marketplace rules. 

There are two main approaches to Canadian organizations to benefit from the standardization process by leveraging IP: 1) Influencing standardization activities; 2) Embedding Patents in Standards (as illustrated in the teleporter example above).

Influencing Standardization Activities

By influencing the development of the standard through participation and ensuring alignment with patented Canadian technologies and approaches, the patent owner improves the market conditions for their company to scale-up. In fact, a standard built around a new technology can confer credibility, attract investment, and stimulate complementary research and development. For instance, when a company’s technology is reflected in standards, they enjoy access to a much wider range of markets, significantly increasing their customer base and revenue potential due to the recognition of their technology provided by the standards. 

Embedding Patents in Standards

Innovators can also leverage patents in standardization through a standard-essential patent (SEP). A SEP is the process of embedding a patent into a standard, which its use is then required for complying with the standard. Accordingly, SEPs require that the patent be essential to comply with a standard, meaning that there is no alternative implementation method available, commercially or technically. Furthermore, the patent owner must comply with the Standard Development Organization (SDO)’s IPR policies, and commit to negotiate on a fair, reasonable, and non-discriminatory (FRAND) basis for the licensing process. 

Collaboration allows us to know more than we are capable of knowing by ourselves. – Paul Solarz

Collaboration leads to innovation

Since 2020, the BDC intellectual Property (IP) Backed Financing Team and the Standards Council Canada (SCC) have partnered to raise awareness, knowledge, and use of IP and standardization among Canadian businesses and innovators. SCC is a federal Crown corporation responsible for promoting standardization in Canada. 
SCC’s Innovation, IP, and Standards-Setting Program is helping Canadian innovators navigate standardization development processes, and benefit from integrating IP into standardization strategies, in order to:

  • Create new markets by having Canadian innovation recognized as a market leading technology
  • Confer credibility, attract investment, and stimulate innovation by influencing standardization through Canadian technology 
  • Influence the marketplace by establishing agreed-upon industry rules
  • Secure and expand market access by influencing the development/revision of relevant standards with Canadian technology
  • Maximize the impact of Canadian innovations by providing new tools to leverage Canadian IP

SCC is leading a range of initiatives to provide education and awareness on the relationship between IP and standardization, and the opportunities related to influencing standards with IP, including fact sheets, webinars, and guidance documents, that highlight the benefits and risks and how the use of standards development tools can promote innovation through standards and IP. 

Want to know more about Standardization and IP?

Standardization helps innovators become leaders in their industry. Now it’s your turn. The Standards Council of Canada guides, facilitates, and collaborates with innovators every step of the way along the path to standardization—both nationally and globally. Contact us today.