Patenting by Canadian businesses, 2019
Innovation is at the heart of economic and social development. Developed nations, such as Canada, use a number of tools, including patents, to protect the intellectual property (IP) behind new or improved products, processes or designs.
Patents give inventors the right to prevent others from freely making, using or selling their inventions for a given period of time, typically 20 years. In exchange, inventors provide a full description of inventions so that others can benefit from technological advances once the patent protection expires or through licensing or sale in the meantime. Inventors must apply for patents separately in each jurisdiction where they would like protection for an invention.
Patents are a form of IP but are different from other types of IP, such as trademarks and copyright. In 2019, 2.0% of businesses in Canada indicated that they owned patents in Canada, and 1.6% indicated that they owned patents outside Canada. From 2017 to 2019, 1.1% of businesses in Canada filed for patents. The latest data from the Organisation for Economic Co-operation and Development (OECD) show that—on average—5.9% of firms in OECD countries applied for patents in 2016, ranging from less than 1.0% in Poland to as high as 16.0% in South Korea.
Did you know that, among the 7.4% of Canadian enterprises that sought advice on IP from 2017 to 2019, two-thirds went to external lawyers, while over one-quarter consulted with patent or trademark agents?
There is a significant difference in the propensity to own patents between small and medium enterprises, and large enterprises. Almost one-quarter of enterprises with 500 or more employees operating in Canada reported owning patents in Canada, versus less than 1.0% of businesses (0.8%) with 1 to 4 employees. The situation is similar for patents owned outside Canada.
High-growth firms were also more likely to own patents. These firms represented 7.5% of businesses in Canada but made up 16.7% of businesses that owned patents in Canada and one-fifth of businesses that owned patents outside Canada (19.2%).
Firms that engaged in innovation activities were more likely to own patents than those that did not. Among firms that developed or introduced onto the market new or improved goods, services or processes, 7.8% owned patents in Canada, as opposed to 1.1% among firms that did not introduce new or improved goods, services or processes.
The majority of patent owners were innovators. Over three-fifths (60.3%) of patent owners were innovators, compared with over one-fifth of non-IP owners (21.7%).
Innovation is often the product of research and development (R&D). This is highlighted by the fact that, in 2019, slightly more than one-tenth of enterprises in Canada involved in R&D (11.1%) owned patents in Canada, while less than 1.0% of companies without R&D expenditures (0.9%) owned patents in Canada. Businesses mostly self-funded R&D activities: in 2018, over two-thirds of the $13.4 billion spent on R&D activity by businesses in Canada came from internal funds. The rest came from private funding and government support.
In 2019, slightly more than one-tenth of enterprises that received private funding (10.4%) owned patents in Canada, while 8.2% of businesses that accessed public funds owned patents in Canada. The federal government manages various program streams offering business innovation and growth support through its departments and agencies. Data show that, in 2018, over four-fifths of the businesses that received this type of support were small enterprises. However, in terms of value, the support went disproportionately to the largest enterprises, which obtained roughly two-fifths of the total support provided to all enterprises.
There is modest variability by industry when it comes to the proportion of firms that own patents in Canada, ranging from 0.3% of firms in construction and in finance and insurance (excluding monetary authorities) to 8.3% of firms in manufacturing. A similar picture emerges with respect to patents owned abroad by Canadian enterprises.
Over one-sixth (17.4%) of Canadian businesses in industries that make up the clean technology sector owned patents in Canada, while 5.7% of businesses in the information and communications technology sector owned patents.
There is almost no difference in the proportions of businesses that owned patents in Canada between those whose primary decision maker was male (2.0%) and those whose primary decision maker was female (1.5%). Similarly, women's level of ownership in an enterprise was not directly correlated to the enterprise's propensity to have a patent in Canada or abroad. Among firms where women owned more than 50% of the company, 1.2% had patents in Canada, compared with 1.7% for firms where women owned from 1% to 50%.
Canadian enterprises led by decision makers born outside the country were consistently more likely to own patents or industrial designs in Canada. The difference is most pronounced for copyrights, with 6.3% of firms where the primary decision maker was born outside Canada owning copyrights, compared with 4.8% of companies led by a Canadian-born person.
Bringing Canadian ideas to the world entails important investments on the part of enterprises. Protecting IP by obtaining a patent is an important step for companies to ensure that it can be leveraged to generate business growth.
Note to readers
The current release is an article published from the Intellectual Property Awareness and Use Survey (IPAUS) and released by Statistics Canada in The Daily on February 18, 2021.
The IPAUS was carried out by Statistics Canada in collaboration with Innovation, Science and Economic Development Canada and the Canadian Intellectual Property Office. This survey is the first of its kind to look at intellectual property (IP) in Canada, and it will help further understanding of how Canadian businesses use IP for economic purposes.
The strategic use of IP is critical to the innovation and economic growth of Canadian enterprises. As a result, this survey was created to establish a baseline on familiarity with and use of IP by Canadian businesses. This survey is also part of the national Intellectual Property Strategy, which was designed to improve access to the IP system for all Canadians, including traditionally underrepresented groups, such as women and Indigenous peoples.
Businesses in Canada can own IP domestically and internationally. International IP protection is accorded through a registration process in the country of interest.
Data are available by enterprise size; by sector, according to the North American Industry Classification System; and by economic region, according to the Standard Geographical Classification, for the reference period from 2017 to 2019.
High-growth firms are defined as enterprises that experienced average yearly growth in revenue of 21% or more during the three years from 2017 to 2019.
Innovators are businesses that introduced new or improved goods, services or business processes onto the market or brought them into use during the three years from 2017 to 2019.
• Intellectual property awareness and use, by business characteristics (33-10-0271-01)
• Information, guidance or advice sought related to intellectual property, by business characteristics (33-10-0332-01)
• Types of intellectual property matters for which information, guidance or advice was sought, by business characteristics (33-10-0333-01)
• Intellectual property ownership inside and outside of Canada, by business characteristics (33-10-0334-01)
• Importance of intellectual property to business activities (33-10-0335-01)
• Contribution of intellectual property to business performance (33-10-0336-01)
Organisation for Economic Co-operation and Development. 2017. Science, Technology and Innovation Scoreboard. OECD Publishing.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
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